Convergence


Increasingly (and especially in rough economic times) advertisers have been turning to digital media for their marketing efforts. Gap made headlines last summer when it cut advertising costs by 18% and watched profits soar by 40%. Why should we all take note? Well, Gap made a data-smart spending move. By reducing ad spending from traditional means, Gap was able to increase their profits and decrease their spending. Even P&G continues to experiment, dropping traditional media by 19% and increasing digital as much as 10%. This represents a major spending shift. In fact, the popular bourbon brand Southern Comfort poured its entire marketing budget into Internet advertising**.

Companies in the United States are moving $65 billion in advertising to online sources. To put this shift into context, listen to what Anthea Stratigos of Outsell Inc. said in a recent interview in Forbes Magazine. “To scale that, compare the total U.S. TV and cable advertising revenue for 2009, which is about $66 billion. The marketing dollars companies now spend on their own sites is equivalent to all TV ad revenue for the year.”

Reasons for the switch are numerous, but the most resounding reason has to do with accountability and metrics. In contrast to most traditional media outlets, digital media can be tracked, managed, and even changed during the campaign. This means it is easier to prove the return on investment for marketers.

The idea of integration and convergence in media has to do with traditional and digital media coming together or converging into a more accountable and trackable media landscape. Moves in this direction include the use of digital billboards, IP-based television programming, and online radio campaigns. To see more about convergance check out this graph . It clearly shows the types of ads that consumers see as the least obtrusive.

For some strategy on how to harness and a further in depth look on the trend please visit this article.

*source: Myths About Online Retail Marketing Posted by Kelly Mooney on 02.17.09 @ 10:40 AM on Adage.com
**source: Southern Comfort Pours Entire Media bugetIinto Digital by Jeremy Mullman on: July 29, 2009 on adage.com

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