Digital speeding up in a slowdown

Although the slowdown is taking a different shape in different markets, what distinguishes it from previous ones is that, today, much of our economy is digital. More and more consumers are online and they are using the web to research purchases and find ways of saving money in this worsening economic environment. For example, in SA, 26% of consumers make their purchasing decision online, with products such as travel being particular favourites: 59% of travel products are researched and purchased online (TNS survey 2008).

Point to

SA may only have around 10% Internet penetration and suboptimal cable infrastructure. But all the trends point to a much more sophisticated population of Internet users taking shape. The arrival of broadband will lead to more customers doing their research online, whether it's for their patio furniture, accommodation for the 2010 FIFA World Cup or work-related activities.

The proliferation of cellphones in SA also opens up many new possibilities as more and more users access the Internet during office hours, from home and when they are on the move. Marketing campaigns simply cannot ignore the mobile opportunity, given mobile's wide accessability for SA customers.

Online advertising is therefore a major opportunity for agencies which, working closely with their clients, can use digital advertising to deliver powerful analyses on consumer trends and adapt strategies to reflect consumer demand. And, just like people pulling together, the integration of advertising media can bring tremendous benefits to businesses.

Traditional media budgets may well have already been committed for 2009 but advertisers can still leverage digital media to assess and optimise the effectiveness of their offline spend. Online advertising can help marketers track the effectiveness of their offline campaigns by monitoring users' changing search behaviour. Search campaigns support and complement the branding or call-to-action messaging of TV, print, radio and outdoor campaigns. And using the free tools within their accounts, agencies can measure the effectiveness of their online campaigns at the campaign or even keyword level.

Doubled the effectiveness

A recent econometric study conducted by Mercedes-Benz and Market Share Partners showed that search doubled the effectiveness of other media in driving sales. This study, conducted over three years in the UK, showed that while advertisers may have established optimum levels for offline media, search is still under-invested and has the greatest potential for driving an increase in sales.

The digital economy is a real-time economy and when money is tight, taking decisions quickly and executing them immediately with minimal or zero upfront costs or cancelation penalties is an attractive proposition for cost-conscious advertisers and agencies.

One of the biggest bonuses of digital marketing is the ability to turn your campaign on or off, ramp it up or down, and optimise it whenever you want and with immediate effect. You can also tap into the collective knowledge of your consumers and adjust your campaign accordingly, making it more relevant for them.

Traditional marketing limitations dictate that you only have budget to market one or just a few 'hero' products at any one time - and these 'hero' products will hopefully increase consumers' propensity to buy across a whole range of a brand's products and services.

Halo effect

Additionally, the halo effect has been employed by many companies which market one key product in hope that the likability will spread across the rest of the product range. However, with search marketing, brands can efficiently and effectively bring visibility to all of their products, all of the time - at a price they know will provide strong returns on their investment. So, brands never need to close the shop while consumers are still shopping.

The agencies that we work closely with across a variety of markets have also told us that the increased investment being driven into search marketing does not mean a cannibalisation of traditional media spend. Significant proportions of new search marketing budgets are coming from sales channels and not just advertising budgets. The sales departments are seeing the effectiveness of search marketing and believe it can deliver better returns than discounting, free product enhancements and promotions. This represents additional budgets for the agencies and in turn - additional income in these challenging times.

It is this kind of cross-functional teamwork which will open new opportunities and help brands not only beat the recession, but triumph with increased market share.

Taken together, the challenging global situation, combined with the opportunities presented by the SA market, can actually lead to fresh thinking and better working practices. If the global downturn can help break down some of the artificial barriers that exist between departments and offline and online media, then we will all move out of this downturn in better shape.