DIGITAL MEDIA

On every news channel and in every newspaper, one topic is guaranteed to get prime coverage at the moment – the likelihood of a US recession and its impact on the global economy.

As businesses watch and wait for the effects of the probable fallout, many advertising agencies fear the impact on their clients’ advertising spend. However, within the marketing industry, recession should be seen as an opportunity – not a threat.

We all know that when times are tight, ad budgets are the first to be slashed, marketers have to be accountable for every last dollar spent and all eyes are turned on ROI.

Yet history dictates that in times of recession, advertising spend does in fact ontinue, albeit with a strong shift in spend towards direct marketing activities as clients focus their efforts on customer retention strategies.

For example, in the early 80s, direct response was very much the poor cousin of the advertising industry, but once the 1987 market crash hit, its use literally sky rocketed with marketers worldwide, blitzing traditional media spend hands down.

At that time, most saw it as a passing fad, but nonetheless, the same trend appeared after 9/11 hit the world markets. The difference this time was that the digital industry had just recovered from the dot.com crash, leading to a consolidation of players who survived to reap the rewards of the resulting downturn through the shift to more direct channels with an emphasis on better ROI.

So with the impending slowdown of the current economy, and with business confidence at its lowest since 9/11, there is, in our view, huge opportunity within the digital sector.

So why such confidence?

Without doubt, the media landscape has changed. It’s now becoming like fast food - “consumers eat media on the run.”

Over the past three years, Google, once described as the ‘frienemy’ within Adland, has been instrumental in bringing about total upheaval of the media landscape, to the point where marketers have come to expect full transparency of spend.

This provision of measurability and accountability is a real strength and advantage of the digital sector and is why digital channels look set to reap the rewards during these uncertain times. Moreover, this level of transparency will become a non-negotiable requirement for all advertising in the future, both above and below the line, as digital continues to shake up the ever fragmenting media industry.

This trend is already well established in the US, where the first items on any marketer’s CV are their analytical, measurement and ROI skills. In recent trips to America over the past three years, we have seen marketers move from total campaign ROI to full customer engagement measurement tactics. Recently the trend has moved even further towards total customer lifecycle management and measurement of the true lifetime value of each and every customer to a business. Australian and New Zealand marketers will need to look to the US if they want to keep on top of their game when it comes to ROI.

The measurable nature of digital channels - from real time web click monitoring to measuring consumer levels of interaction with a brand - highlights the in depth level of customer information marketers can now leverage. As a tool, digital has unlimited potential for not only measuring advertising effectiveness, but also for identifying buying behaviours and how customers are engaging and talking with brands. But it’s the continued rise of the internet that has and will continue to give the best value to marketers in years to come.

Ultimately, digital won’t spell the death of traditional media.

In fact, quite the opposite.

Digital campaigns in some cases live and die by the traditional media driving consumers online. Digital will simply give marketers the opportunity to measure their media very tightly and enable them to alter channels and creative on the fly to leverage the biggest bang for their buck.

We should all feel privileged to be part of the advertising world at the moment, recession or no recession. The power of digital is completely revolutionising the industry and we can now provide our clients with a far greater level of transparency than ever before.

So the next time you see that recession news story, imagine digital marketers everywhere smiling smugly as they think how well placed they are to take advantage of it.

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