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3 reasons why digital will triumph in the downturn

3 reasons why digital will triumph in the downturn Tom Hespos
If you've been talking with your digital colleagues at all recently, you've probably noticed the same thing I have -- either they don't expect that digital will experience a slowdown in the coming year, or they're ready to run for the hills. There's very little middle ground.

The digital industry seems to be torn regarding the outlook for 2009. I suspect the naysayers might be drawing too many parallels between what is going on in the traditional advertising business and what we might expect in digital. Industry pundits are predicting cataclysmic declines in offline advertising, with either flat or modest growth for digital advertising. Jack Myers is a good example. He uses the D-word.


I think there's actually a change coming in the mindset of the consumer, something that I've already started to see in social situations. Conspicuous consumption isn't the name of the game anymore, and it's become cool to figure out new ways to save money. But that's another column for another time.


I think digital is poised for gains in 2009 -- possibly something more than the modest gains many pundits predict. And I think the only thing standing in the way of that is a much larger stall-out of the U.S. economic system.


I have three reasons for thinking this, but they all roll up to the notion that most U.S. brands will not consider a rollback of their entire marketing spend for 2009. If we take that as a given, the game becomes one of game-changing and allocating dollars to channels that have a shot at delivering short-term sales. My reasons for thinking digital will do well? Here you go:


1) Digital is two-way: I'm not talking about conversational marketing again. I'm talking about digital's built-in response mechanism. Many brands and products can take advantage of digital's immediate opportunities for feedback, whether that feedback consists of adding the product to an online shopping cart, signing up for product updates, or raising a digital hand in order to receive a coupon. Few advertising or promotional media are as close to the backchannel as digital -- even direct mail with prepaid postage requires that the potential respondent find a mailbox. Digital makes it easy for people to respond.


2) Digital is targeted: Few media can touch digital's targetability. Some exceptional direct mail lists might come close, but they can't match digital on price. The move toward digital is driven by a brand manager's need to grow share with less money, and there's a tipping point many brands have reached where they realize they can't afford to out-shout the competition with broadcast. Instead, they have to look at their ideal customers and prospects and market to them with little waste in order to grow the business. Only digital media can be this targeted right now. Direct mail isn't even in the same league, efficiency-wise.


3) Digital is not just advertising: Brands have built durable marketing platforms with digital technology -- the kinds of things that don't require a continual investment to keep running. Those that haven't are getting wise to the fact that they ought to be developing these platforms. For instance, CRM investments can pay off over the long haul and make it easier to drive short-term sales with minimal incremental investment. The same goes for investing in building online communities, conversational marketing assets, ecommerce partnerships and branded applications. Digital is so much more than advertising, and it has the potential to touch almost every line item in the communications budget. Therefore, even if advertising as a whole takes a hit in 2009, digital can be somewhat sheltered from that.


I'm hoping that in 2009, necessity will continue to foster innovation, and we'll grow as a result.


I wish everyone a happy and safe holiday. Enjoy the time with your families, and I'll see you in January!


Tom Hespos is president of Underscore Marketing and blogs at Hespos.com.

Tom Hespos is President of New York agency Underscore Marketing. He is a frequent contributor to industry trade publications and has been writing a regular column about online marketing and advertising since March of 1998. His clients include Wyeth...

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