Digital Ad Spend Up At The Expense of Traditional

According to a new Epsilon CMO Survey, Chief Marketing Officers at many of the biggest brands in the nation are seeing a major shift in the marketing landscape. 63% of the 175 marketing executives surveyed see an increase in their spending on interactive/digital marketing while 59% report a decrease in traditional marketing spend.

65% of CMOs say that the money spent on advertising as a whole will decrease due to the current economy. In contrast, 94% of CMOs and marketing executives agreed with the statement, 'A tough economic period is precisely the time when marketing plays a key role.'

When asked how their firm determines their target market for each channel:

  • 50% stated that they use data driven marketing techniques
  • 31% of respondents agreed that they use sophisticated modeling tools to analyze existing customer behavioral, preference and demographic data
  • 19% said that they analyze past purchase behavior
  • 28% said they made rough estimates based on past experience

Mike Iaccarino, CEO of Epsilon, says "... marketing executives are seeking accountability and measurable results. Data driven marketing is an increasingly important component of corporate marketing campaigns... "

CMOs of the biggest brands have been early adopters of new media with social computing and blogs receiving the most interest whereas instant messaging and interactive TV ads were the least popular.

  • Social computing (including word of mouth, social networking sites, viral advertising, etc.) was the most popular emerging channel with 42% of marketing executives expressing interest in adding it to their marketing mix
  • Blogs were the second most popular emerging channel: 35% of marketing executives want to pursue blogs and 19% already use blogs
  • Almost one-third of CMOs mentioned Podcasting as an area of interest: 31% are interested in adding Podcasting to their marketing mix and 18% already have.
  • Mobile devices also elicited interest: 29% are interested in Mobile Devices (Phones/PDAs) and 22% have added them to their marketing mix

Senior marketing executives anticipate further cuts, says the study, but are confident that they will be able to manage their budgets by focusing spending where it will have the greatest impact. As the overall marketing pool diminishes, the budget for interactive and digital marketing is dramatically increasing, while that for traditional marketing continues to shrink toward interactive, digital marketing:

 Interactive/Digital Marketing:

  • Decreased... 14%
  • Increased... 63%
  • Stayed the same... 23%

While Traditional Marketing

  • Decreased... 59%
  • Increased... 13%
  • Stayed the same... 29%

Source: Epsilon, September 2008

The survey included 175 U.S. Chief Marketing Officers and marketing executives of some of the largest brands in the nation. 27% of respondents work at companies with $10 billion or more in annual revenues last year.

For additional information and a PDF file, please visit here.


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