Setting an online marketing budget

(Originally published in late 2009, still true...)

It’s that time of year… everyone’s planning their budgets for 2010. We all hope and pray that the recession will be over by then, but in the meantime most organizations are lean and mean. Just today eMarketer reported that in order to improve overall marketing effectiveness, 70% of marketers are moving budget from traditional to digital media.

So is it time for you to create a high impact online marketing program? You know that your targets are online, but where do I start?

Two primary ways come to mind – targeted media buys and search marketing.

Online Advertising

A broad host of media models have been developed to assist virtually any organization in reaching online targets. Demographic, psychographic and re-messaging platforms are all very common. If your target is online, they can be found.

In a recent panel study, comScore also found that visits to an advertiser’s site increased by an average of 46% over the four weeks following first exposure to a campaign. And this interest in the advertiser is valuable – they’ve documented a 27% increase in online sales and 17% increase offline by comparing test and control consumer behaviors.

Studies dating back to the earliest days of the Internet have noted lifts in brand awareness and perceptions based on online advertising. And a few progressive organizations have largely reinvented themselves through online campaigns.

Search Marketing

But let’s not put all our eggs in one online basket! While we can hunt and find many consumers, some make it really easy by typing in our ‘buying terms’ in a search engine. A well-crafted SEM campaign can and should produce a very good return for any marketer.

Further, comScore has just released a report quantifying the lift resulting from a combination of display advertising and search running concurrently. This lift – 155% with the two combined over search alone – is seen on both paid and organic searches and clicks. It appears that it’s not just the search copy that gets a user to act, but the brand message the user has recently seen.

There are proven techniques to improve response

Many advertisers understand that traditional static online ads are hardly seen and have taken steps to break through the limits of traditional static graphical online advertising. Larger placements, rich media, highly tailored message, and video are all becoming a part of the typical online advertising tool kit.

The ad serving powerhouse DoubleClick has consistently shown that larger standard units (300×250pxl) receive more user attention and clicks. Even larger ads, when available, are even more powerful. This may be because users notice the larger placements much more readily than smaller ones which tend to blend together.

Rich media ads – those with significant motion – also generate more responses and awareness metrics than static graphical ads. Pointroll, a major rich media provider, generates a 116% lift rate over standard banners, and average 10.6 seconds of engagement with its ad units that expand or change as users interact with them. Even as the novelty of the placements has waned, the positive lift remains.

This past summer Forrester found that marketers believe they are segmenting and targeting with a high degree of exactness. Unfortunately, their targets do not agree. Of 800 respondents to a broad based survey, 58% said that very few of the ads and offers they’ve seen match their interest, and another 29% said none do. Yet 39% will occasionally respond to online advertising in general, suggesting that is if the offer or message is compelling they’ll participate.

DoubleClick has reported that online video ads see interaction rates twice to four times higher than graphical ads – typically ranging from .4 to .74%. Although more expensive to produce and traffic, this lift is further enhanced by both the ability to measure the length of the brand engagement and the average amount of time spent with the ad unit – 19.1 seconds for 30 second placements.