Interactive Marketing in a Recess

This article confirms that the advertising buying consumer is changing its buying patterns and that the traditional ad agency has to re-engineer for survival.  This is the wave Applecore Interactive saw 5 years ago when it positioned itself to be a Canadian market leader in interactive marketing.

Forrester Research has this prediction for online  marketing performance during a downturn:

Money will flow toward search. Search marketing is close to where value is delivered. Search pays on clicks, which correspond to prospects doing active research or buying. We think that Google and other search-based firms could actually see prices increase as marketing dollars cut from mass brand advertising begin to flow into performance-based search.

Email marketing will increase. Email targets your existing customers, a group far more likely to listen to your messages in a recession than new prospects. A recession is likely to increase email marketing volume. Smart marketers will even invest in analytics to determine which of their existing customers are most likely to buy again and then send appropriate messages to those consumers.

Online display ads won't be hit too hard.  In the last recession, much of the online money came from dot-coms and venture funding, a source that rapidly dried up in bad economic times.  But the mainstream consumer companies now advertising on't evaporate so quickly,  Instead,  brand advertisers seeking cheaper media could turn from TV and print to online video and flash ads.  And tey'll shift some dollars into performance-based display ads.  Result:  Ad pricing will shift toward performance-based ads and away from CMP, but total spending on display ads won't suffer.

The article predicts that Social Applications could thrive, because:

• Well-designed social applications are effective
  
• They're cheap
  
• They motivate consumers in the middle of the funnel
  

Its recommendations:

• Make sure results-based interactive gets its share of the mix
  
• Stop dabbling and insist on social applications with metrics
  
• Stick with partners that have staying power
  
• Focus on quick inexpensive success