Are You in the Know? Embrace Digital.

June 24th, 2010

Embrace digital not as a competitor to traditional services, but as a complement.

Digital services continue to be the primary growth engine, but traditional revenue streams are expected to remain significantly larger throughout the forecast period.  Digital spending in the US is expected to account for 26% of all E&M spending in 2014, up from 19% in 2009.  

Overall US advertising is expected to increase at a 2.6 % CAGR from $159 billion in 2009 to $180 billion in 2014.  In the US, Internet advertising is expected to surpass newspaper advertising spend in 2010.  Advertising spending for Internet, television, radio, out-of-home, and video games are expected to be larger in 2014 than in 2009, while consumer magazines, newspapers, directories and trade magazines are expected to be smaller.

These projections reflect the market fragmentation and consumer behavioral changes. The advertising industry is responding to consumers’ shifting attention and migrating towards total marketing or total brand communication.  Brands are changing their focus from advertising on a medium, to marketing through, and with, content.  

Three themes that are expected to emerge from changing consumer behavior and the industry must anticipate and pre-empt the needs and wants of consumers.  

  • Rising power of mobility and devices: Advances in technology are expected to see increasingly converged, multi-functional mobile devices come of age as a consumption platform by the end of 2011. By 2014, US mobile Internet access subscribers are projected to increase to 96.1 million, a 40% CAGR from 2009. 
  • Growing dominance of Internet experience over all content consumption: Increasingly, the consumer has moved beyond thinking of the Internet as an end in itself, and expects all forms of media to embed the convenience, immediacy and interactivity of the Internet. People are already consuming magazines and newspapers on Internet-enabled tablets, and streaming personalized music services in preference to buying physical CDs.
  • Increasing engagement and readiness to pay for content-driven by improved consumption experiences and convenience: Consumers are more willing to pay for content when accompanied by convenience and flexibility in usage, personalization and a differentiated experience that cannot be created elsewhere. Local relevance is also expected to enhance the content providers’ ability to charge.  

If engagement with consumers is the next wave of marketing, 10 companies are doing a particularly good job of it, according to brand and communications research agency Hall & Partners.

In conjunction with a new tool that measures consumer brand engagement on an emotional level, the Omnicom-owned company determined the 10 most engaging brands in the U.S.  The 10 most engaging brands are (in order): 1. EBay 2. Google 3. Amazon 4. Kraft Foods 5. Microsoft 6. Facebook 7. Coca-Cola 8. Pepsi 9. Yahoo 10. Dove

Coca-Cola and Pepsi have employed many marketing tactics over the years to build strong brand communities, using everything from experiential marketing to forays into social media.  And while Kraft may be initially surprising as a brand with high consumer engagement, the company’s recent efforts to broaden its image “beyond the refrigerator” — particularly with newer tactics.

Source:  MediaPost Communications