RADIO CASHES IN ON LOVE

Article Highlights:
• Clients are shifting budgets rather than outright canning them
• Mobile is big and getting better (and brands need to react with investments)
• We should see an injection of marketing dollars from small businesses that were previously out of the digital game
Next In Focus

Optimism for a change
The news in our industry is starting to look a bit more positive lately. The velocity at which ad spending declined over the last two years has gone from outright crash to crawl, with the expectation that we’ll start seeing increases in late 2010 and into 2011. “The economic cycle has reached bottom — at least for the online ad industry,” said David Hallerman, eMarketer senior analyst and author of the new report, “US Ad Spending.” He notes that although the Interactive Advertising Bureau and PricewaterhouseCoopers indicated that spending in the first three quarters of 2009 fell by 5.3 percent, eMarketer’s estimates indicate a smaller loss of 2.5 percent during Q4.

If you live in pockets of the traditional advertising space, such as radio and print, the news will continue to be bleak for longer, with projected declines of greater than 4 percent in 2010 for newspapers and magazines. However, TV and outdoor are actually forecasted to increase slightly next year (approximately 2 percent), with internet leading the charge at a bump of 11.6 percent (source: ZenithOptimedia).
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This particularly good news for those of us on the interactive side simply quantifies what many of us who live here day-in and day-out have experienced this year: continued growth. While most experts and researchers have announced that the trough is bottoming out, many of us have seen quite a bit of sunshine through the general advertising clouds. The overall picture is a $440 billion global industry, and internet advertising still represents less than 14 percent of that mark. We have a lot more room to grow.

What follows are a few signs that I witnessed in the latter part of 2009, from a small corner of the U.S. in San Diego, that might resonate with you and provide some optimism for recovery in 2010. I am sharing these as my own observations to open the dialog with others who might share what they’ve witnessed, positive or negative, as a digital imprint of what we were thinking as we enter into a new decade.

Clients are investing in social media

Brands are not just starting Twitter accounts and Facebook pages — they’re embracing social media as an influencing business practice. Most seem to understand that they need to listen to customers and react to what they’re saying; among customer service gripes and viral contests, there is actually useful information. Companies are employing a variety of tactics within the social media construct to change the way they do business both internally and externally. What’s more is that they’re talking about it, therefore influencing others who will mirror effective social media strategies this year.
Shifting budgets rather than outright canning them

Discussions in the boardroom have gone from “what can we cut?” to “why are we spending on this ineffective tactic and not that effective one?” Earlier in the year, there were a lot of broad-stroke cuts made in budgets. We might hear, “All my budgets were cut 15 percent!”

Now that the dust has settled a bit, I have witnessed more productive discussions around moving money from areas that either weren’t measurable or didn’t produce to those that are effective in moving the needle. Next year, as we see more efficient use of budgets through Q1 and Q2, we hopefully can get some executives to spend more to get more in the latter part of the year.
Found money
Some clients “magically” found money left in their budgets at the end of 2009. No doubt clients were frugal throughout the year. But in December, they found some money to put into 2010 initiatives. For those clients, we should see some of that work come online quickly, which may encourage others to follow suit.
Working together

Some companies found themselves with significantly pared down staffs in 2009. As a result, rapid decision-making and prioritization are the name of the game for those time-crunched marketers who remain ahead. These two traits, when going hand-in-hand, result in efficiencies for everyone; efficiencies should reduce costs and create more value for the dollar.

Numbers are up

Generally speaking, the holiday numbers for our ecommerce clients looked great. comScore validated that with its Nov. 30 report that said that this year’s online shopping on Black Friday came in at $595 million, up 11 percent over 2008. That bodes well for next year’s Q4 spending and adds to consumer confidence for this year.
Ridiculous amounts of email

Marketers went nuts with their volume of email this holiday season. The prevailing thought must have been that if a little is good, a lot must be better. Consumers are sensitive, and smart marketers will put a little more planning, diversification, and effort into their marketing for next year. They need to think about their mix and change things up to be successful. If they do, then they might spread the wealth a bit to other areas of marketing to attract consumers.

Budgets are still wasted

Not sure if you’ve noticed this, but I have seen several attempts recently at forcing cheesy creative to go “viral” (not on our watch, thankfully). And, while this may sound like a roast, I do want to say that it in some ways is inspiring. It says, to me, that clients are still willing to experiment and take chances. Ideally, the budgets aren’t, in fact, wasted — but lessons are learned, and the clients still press forward in 2010 with more realistic approaches.

We’re hiring

Thankfully, we’re still growing and, therefore, hiring. That is always a sign of recovery. Unfortunately, I have heard of a few more shops with lay-offs, but hopefully they are the few and those that are hiring are the many.
Mobile is big and getting better (and brands need to react)
Now that Verizon has Android to compete with the iPhone, we have a full-scale assault on bringing brands to customers over their mobile phones. Previously there has been an excuse, but with Verizon and T-Mobile reporting their smartphones are 40 percent of their sales and Nielsen predicting that smartphones will represent 50 percent of all mobile phones by 2011, companies need to get going on whatever mobile strategy they’re going to employ. It can’t wait any longer. They have to act now!

Bing happens

Someone had to re-invigorate search marketing, and Microsoft did it. Now clients are asking, “What do we do about Bing?” Bing overtook Yahoo as the No. 2 search engine and is now working to illustrate that it has not only staying power, but also the increasing ability to gain on Google. If Bing is successful in capturing more market share from Google and replacing Yahoo altogether in 2010, then marketers will have more work to do to ensure they rank well in Bing, as well as Google.

Social streams

Now that integrated social streams in search engine results have become the norm, search becomes more real-time than ever before. This will create more 24/7 work for e-tailers, and/or their consultants, who want to influence search results to drive sales.

Local matters

No one stimulates the economy like small businesses. And, now that they’re able to get into the advertising game with little, yet incremental expense thanks to entities like Yelp and other local engines, we should see an injection of marketing dollars from companies that were previously out of the game beyond ads in print Yellow Pages.

Mergers and acquisitions

Those with cash viewed 2009 and now 2010 as opportunities to acquire companies, contracts, technology, and talent. There isn’t a day when someone isn’t sniffing around, and the intensity around transactions in our industry is only increasing. Generally speaking, if people want to buy into our space, it means they see opportunity around the corner. I tend to agree, which is one of the reasons why we’re not selling.

Conclusion

The idea behind this piece was to spark some optimistic discussion around why 2010 could show signs of recovery. Personally, I don’t believe that we’re going to see some incredible surge to opulence; rather, I expect a long, slow, sensible crawl through reality. I expect that tried and true tactics will win over experimentation next year until some bold individuals choose to take the first big leap. It will require brick-by-brick success to build confidence, and then that confidence can be leveraged in order to take risks. Risk-taking brings with it money from those who attempt to chase the risk-takers who break from the pack. For us to see recovery in 2010, we need confident leaders who are willing to challenge what we produced in 2009.

I hope to see some comments from folks who have either witnessed some of the same activity in their client rosters or are clients themselves (on whom we depend for our industry) who feel the same way. Likewise, I invite the contrarians who, like the groundhog, see additional days of winter in this recession. Either way, it all represents opportunity if we can effectively navigate these rough waters and deliver value to our clients and customers. We’re in this together, and hopefully we have the opportunity share our guiding feedback with one another.

Reid Carr is president of Red Door Interactive.
www.imediaconnection.com/profiles/reid_carr
On Twitter? Follow Carr at @icowboy. Follow iMedia Connection at @iMediaTweet.