Digital Advertising Braces the Storm

Digital Advertising Braces the Storm

The recession has hit digital marketing with a light touch – at least compared with the rest of the ad industry, according to a report by The Society of Digital Agencies (via Adweek), which states that digital shops will continue to grow this year, despite the financial slump – with overall increases of about 8%.

The Society of Digital Agencies’ (SoDA) inaugural 2009 digital marketing outlook report details results from a poll of 560 companies, including 370 digital agencies, 50 traditional shops and 77 clients. The sample also included freelancers.

The research finds that just 10% of digital shops foresee a decrease in digital projects, while 30% expect spending to remain roughly the same. Traditional shops were expected to push their digital agenda by 70%.

The SoDA report also finds that the economic crisis could tilt the balance to digital even more. Digital budgets are not growing as fast, but traditional ad budgets are shrinking at a much faster rate, with over 60% of all ad agencies – both digital and traditional – expecting an increase in digital marketing in the long run.

Clients may consider putting off big budget projects, however, even those that are already listed in annual budgets. Marketers fear the recession has not hit rock-bottom yet and are being cautious.

Most budget cuts took place in traditional ad spending, said Paul Lewis, director of operations for SoDA, adding that digital agencies are making do by collecting smaller projects, and slowing down on hiring.

Marketers expect spending in initiatives with direct revenue returns to fare the best, the survey found. Top priorities for marketers are digital infrastructure, digital advertising, search optimization, and social networking. Widgets and e-mail marketing were marked as low priorities by most respondents.

Meanwhile, another study – released by the Association of National Advertisers and American Association of Advertising Agencies – found many corporations struggle to integrate digital communications into their operations.

A Forrester report predicts that interactive advertising is heading for growth over the next seven years.

Recent research by the European Interactive Advertisers Association (EIAA) indicated that European advertisers are choosing online advertising over traditional media like TV, newspapers, and magazines.