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April 30, 2008

Social technology marketers bullish in face of recession

by Josh Bernoff

In February we published research based on our expectation that interactive marketers should continue their investments in social applications with a recession potentially coming.

Today we published the results of new research that shows that many interactive marketers actually plan increases in the face of recession. (Forrester clients will be able to see the whole report, others will see a summary when clicking on the link.) We asked this question:

Assuming the economy is in a recession in the next six months, how would you change your investment in interactive marketing overall?

Of 333 interactive marketers surveyed, 26% plan to increase their interactive marketing investments, and 46% will maintain them at current levels. (13% plan a decrease and 15% aren't sure.)

Where is that money going? Here's a chart from the report.

recession marketing investments

Social networks will get the largest number of increases, over 40% of those using it, along with user-generated content, blogs, and that old standby, email marketing. Every single form of online marketing we surveyed had at least half the marketers increasing or maintaining their investment (online display ads fared the worst; based on this sample it could see more decreases than increases.)

Note that the variation in N reflects the varying number of people familiar with or using each type of marketing. But for all the major technologies we got more than 100 responses.

Are these typical of marketers in general? Remember, the respondents are interactive marketers at large and medium-sized companies and ad agencies, so you can expect a little more optimism. But I believe these results reflect a real commitment to the power of interactive marketing over traditional advertising, which always suffers in a recession.

This is also evidence that in contrast to the bubble of 2001/2002, this housing-driven downturn hasn't spread to depress all investment in new ideas. People are recognizing that in a recession, social application investments are relatively cheap and deliver measurable results, despite their newness.

Our advice to marketers, as describe in the report, is this: measure what you do, so you can justify it when the axe comes. And build assets, not campaigns, it's a better use of your money.

Marketers reading this -- do you agree with what our panel said?

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Comments

GraemeThickins

Two reactions:

1) because social apps are so cheap, as you say, and often DIY endeavors, the extent of actual increases in spending would seem not to be significant

2) why are there so many "Don't Know" answers in your sample? are these hard questions?

Lynn Crymble

A bit of caution to these marketers - spending more doesn't mean they shouldn't take the time to implement a sound strategy through social media.
It could end up costing more and might make future initiatives harder to justify.

jennifer jones

I totally agree that this "recession" is not spreading to fears about spending from marketers at least not from my vantage point. I also agree that marketers have to think of assets and brand building and not "campaigns". I think marketers also realize that social marketing is the world they have to begin or further participate in and so i am seeing that more and more marketers are "trying" or doing more in social media/marketing.

sandor

Josh or others,

what arethe measurable results that matter to buyers?

You mention "social application investments are relatively cheap and deliver measurable results" -- where is the ROI that pushes spending up in a down economy? I've read the report, and I don't see the metrics - can you rattle off the top 3? provide a complete list? or is there just one that matters?

Thanks!

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