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Featured Webcast: Tony Palmer, SVP & CMO, Kimberly-Clark

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A Tipping Point for New Media

Back to Seaching for Better Planning Assumptions? Start with the Unknowns

Many organizations remain in test mode with interactive programs, funding forays into search, e-mail marketing, banner advertising, mobile, and other interactive channels largely with new money. But while we have yet to see wholesale reallocations to online from other media — Internet spending made up just 6.5% of the overall advertising mix in 2006, according to TNS Media Intelligence — the pieces are beginning to fall into place for a more significant shift.

“The online medium is reaching a level of credibility that is legitimizing it,” says Shar VanBoskirk, a senior analyst with Forrester Research. “We’re at an inflection point where more traditional businesses will move online over the next two years.”

In particular, e-mail and search marketing are reaching critical mass in the interactive space. A 2006 Forrester study showed that 97% of marketers are using, piloting, or expecting to pilot e-mail marketing programs in 2007, and 91% are doing the same with search marketing. Nevertheless, marketers still have a long way to go to catch up to the changing media habits of consumers.

“Consumers spend 34% of their media time online, but only 6% of the overall marketing budget is spent online,” says VanBoskirk. “That’s a pretty significant disconnect.” She’s not suggesting that marketers allocate a full third of their budgets to online, but her point is clear: If companies want to stay relevant to their customers, they have to increase allocations to interactive channels.

Before earmarking a larger chunk of the budget to new media for 2008, however, marketers must be sure to have a baseline of prior results in place, along with the right set of metrics to measure the performance of these emerging channels. In a medium that’s still relatively unproven, marketers must have clear expectations of the incremental impact that new investments are going to have on the mix.

Those expectations must be formed through a mix of experimentation, market research, and the learnings of early adopters. The good new is that the proof points are beginning to surface. “We’re seeing a critical mass of companies that have moved online,” says VanBoskirk. “Marketers who have had a hard time getting proof will find it easier to get that proof this year.”