Good ol’ Forresters (from AdWeek):
NEW YORK The looming economic downturn will inevitably lead to a decrease in ad spending, but marketers are likely to continue shifting money into social media, according to a new study.
According to the Forrester Research report, marketer moves into areas like word of mouth, blogging and social networking will withstand tightened budgets. In contrast, marketers are likely to decrease spending in traditional media and even online vehicles geared to building brand awareness.
Those findings stand in contrast to the previous economic downturn, when spending on Internet advertising cratered as marketers turned to tried-and-true media.
“Last time around, there was a lot of mindless investment in online,” said Forrester analyst Josh Bernoff. “People were dong it because their competition was doing it or because it looked cool. Those are good reasons to stop doing it when money tight.”
Absolutely right, Joshie hon.
Today, companies are finding social media applications are useful marketing tools. Bernoff pointed out that a company setting up a blog or Facebook page won’t pay very mcuh (sic), unlike the outlay for big-budget media campaigns. Even more complex community initiatives top off at $300,000. In many instances, these initiatives do not involve media spending.
“Placing ads in Facebook will suffer right along with placing ads on Yahoo! and in Time magazine,” he said. “That’s going to get cut across the board.”
Advertising is advertising whether it’s on Facebook or a portal – who has a purely Ad-based model for revenue? I think MySpace does, who else? I mean, big budget advertising. Who has decent consumers spending on advertising because that will probably increase during an economic downturn (making money from hobbies, home business etc). Amazon affiliates and Google Adsense might well increase.
For example, Forrester found that Procter & Gamble’s BeingGirl.com, an online community for adolescent girls, is four times as effective as a similarly priced marketing program in traditional media. Initiatives like BeingGirl.com require a long-term commitment, Bernoff pointed out.
“There has been a lot of experimentation,” he said. “The time for that should be coming to an end soon. Experiments don’t tend to do well in an environment where money is tight.”
Nah, that doesn’t make sense. We’ll seem most the experimentation happen when companies have a smaller budget and a need to get their message out. $120 for VBulletin forum bulletin board or zero for Ning.com starts to look real good when marketing budget has been deleted and jobs are looking shaky. But the bigger projects have the chance of going viral and creating a massive return on investment. Maybe it’s just me, but I believe the time to innovate is when the going gets tough. When the going gets tough, the marketeers go social media shopping. Heh.
Brave Josh: BeingGirl is a tampon site, as in, ‘how to use’, questions and FAQs, webisodes o.O. By the way, what is it with Forrester and Proctor & Gamble? They always use them for case studies. Well, either P&G or GM or Ford. I guess it’s either they are their major clients or they are the companies doing the most in social media online.