Companies focus on the ROI of marketing spend
Posted by Manuela Barreto @ April 2nd, 2009 in Marketing Analysis
Internet is changing the way companies communicate in the pursuit of brand building and commerce particularly since it’s become a rapidly emerging topic with continually evolving strategies and marketing tactics such as online PR, SEM/SEO,corporate blogging, social marketing, microblogging etc.
Marketers need to determine what really works for them, and equally important, save time and needless effort once they can distinguish between the wrong and right approaches. In general, when it comes to the advertising market, businesses are mainly basing their decisions around lower media prices, budget cuts, cost effetiveness, a greater focus on ROI of advertising investment and better targeting, all of which are synonyms of Internet.
The shift toward Internet is driven by the new mix of opportunities available to target specific groups of consumers in a measurable way. According to a study led by Credit Suisse on the European Advertising Market, changes planned in 2009 regarding advertising spend presented a mix where ‘most marketing directors were indeed planning a change and there was a general discernible trend to switch from TV (both Terrestrial and Multichannel, by between 10-30%), Print and Radio into the Internet (up by 10-30%)’.
The interviewed group of media buyers and marketing directors expressed that Internet advertising generates high ROI and offers great value, which can only confirm how traditional media is being displaced by the new media. The competition clearly lies between TV and Internet as the most promising channels for advertisers.
Internet was the only channel that demostrated an increase in spend while traditional media (TV, Radio and Outdoor) proved otherwise. Both media buyers and marketing directors involved in the survey expressed the following comments regarding the reason to the shift in ad spend from traditional to digital:
‘Success is not based on GRP or print circulation, but on ROI’
‘Looking for much more transparency and return on investment. The internet as a
medium is evolving and provides more flexibility than other platforms’
‘It’s about better targeting and better use of our marketing spend. Ensuring we
connect with consumers and shoppers through the right channel at the right time
with the right message’
‘Budget restrictions due to the crisis combined with the media saturation level of
the country and the decreasing ROI imply a spending reduction and a spend mix
shift towards more reliable media’
In short, companies should adapt, otherwise, they’ll become extinct.
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