Digital

Marketin
g Trends
The document aims to keep the audience abreast with the latest A Digital
trends in Digital Marketing based on various analyst reports and Transformatio
articles published from trusted sources.
n Program
Source: http://brandedcontent.adage.com/mic/emarketer/

Seven Predictions for Digital Marketing in 2009

- January 2009 - Geoff Ramsey — CEO, Co-Founder-eMarketer

I think we can count on several things in 2009. Not all of them are positive, of course, but there can be some
comfort in quantifying the pain we all know is coming. 1. No doubt about it, marketers will be cutting back on
advertising spending this year. All the industry pundits, media firms, Wall Street analysts and bloggers are
predicting slashed budgets across the board. A look at the latest projections for total US ad spending growth in
2009 reveals a consistently downward trend, and that's after negative growth in both 2007 and 2008.
It's worth noting in the chart below that the lowest number, the --10% growth rate from Barclays Capital is also the
most recent prediction. Previously, Barclays had forecast a decline of only 5.5%.

2. Among traditional media, newspapers, radio and magazines will see the worst declines. There is a double
whammy in effect here, too. The economic recession, while severe, is only exacerbating an existing trend. The ad
buying, measurement and reporting systems of traditional media are being systematically rewired for the digital
age. As I wrote in Digital Marketing Now (my recent white paper about the strength of digital in a downturn),
even before the financial meltdown started, analog
media was undergoing wrenching changes. Consider the
plight of newspapers, whose collective revenues will
plummet nearly 16% in 2009, after an even more brutal
16.4% decline in 2008, according to eMarketer.

While advertising on television has held up remarkably

well so far, the cracks will begin to appear in 2009, with
most researchers predicting a 5% or greater decline in
spending. Similarly, radio is expected to see an ad
revenue dip of between 5% and 8%, depending which
source you look at.

3. Advertisers' pull-back in overall marketing spending,

coupled with a serious re-examination of traditional
media, will set in motion a series of permanent
changes that will affect how media is planned and
measured, as well as the media mix itself. In short,
things will not revert back to "normal" in 2009, 2010 or
whenever the economy pulls out of its current malaise.
Under the smoke screen of an obviously troubled
economy, many traditional media companies have pre-
emptively slashed their head counts—even while profits
are still coming in. While the press releases point to the
economy and the need to downsize in preparation for
worse times to come, I can't help but wonder whether
some selective pruning is going on to remove the digital
laggards, thereby making room for new talent with
digital chops.
4. Throughout all this economic shrinkage, the Internet will continue to grow, though at a far more constrained
pace. eMarketer projects online ad spending will rise 8.9% in 2009, after an already ratcheted-down rate of
11.3% in 2008. That's considerably lower than 25.6% growth in 2007. eMarketer's 2009 growth estimate of nearly
9% is relatively conservative; projections from many researchers, analysts and media shops are far more bullish.

With the online advertising growth rate dipping below 10%, many will declare 2009 the end of the Internet's glory
days. That would be a mistake. Compared with the double- or single-digit declines seen with newspapers, radio,
magazines and broadcast television, the Internet will continue to outperform. As they say, "Flat is the new up."
With online, some ad formats will fare better than others. Marketers will continue to use search and e-mail heavily
this year, because of both their familiarity and
ease of measurement. eMarketer estimates
growth of nearly 15% for search and 3.5% for e-
mail. Growth for online video, a nascent but hot
area, will be even steeper, though it will slow
from 81% in 2008 to 45% in 2009.

5. Despite the general consensus that online

will ride out the storm, expect to see a growing
contingent of bearish forecasters disparaging
its prospects. Ironically, many of these doom-
mongers will hail from the Internet space. By
November 2008, we had already begun to hear
scary, almost apocalyptic predictions from the
fringes of the blogosphere, which were soon
echoed by more-mainstream analysts. These
naysayers almost seem to be trying to outdo
each other with negative predictions—"I'll see
your number, and lower it by 5 percentage
points." Of course, if enough of us in marketing
departments and ad agencies listen to these
downbeat forecasts, and take heed through our
own actions (or rather lack of action), we will
end up fulfilling their prophecy. We must try to
resist the siren's call.

6. Growth in online display advertising will

languish—but only in terms of absolute-dollar
spending, and the effects will be temporary.
While eMarketer predicts display ad dollars will
grow by a relatively anemic 6.6% in 2009,
behind the scenes there will be much innovation
as the industry figures out how to creatively
deploy, integrate and measure the value of
display ads for branding purposes. New data is
providing solid evidence for what we already
intuitively knew, but couldn't before measure:
When display ads are combined with search, marketers can expect a significant increase in sales conversions,
whether those take place online or offline.

7. E-commerce, already hammered in 2008, will see growth slip even further, from 7.2% in 2008 to a measly
4.1% in 2009. There likely won't be a decline in the number of online buyers, but rather a pronounced decrease in
their average annual spend as consumers cling ever tighter to their purse strings. Look for retailers, as a result, to
whack prices, push deals and flood the Internet with digital coupons.

Beyond the seven predictions discussed above, the most important theme to keep in mind is that things will get
better, eventually. Whether the curtain lifts in late 2009 or some time after, the economy will most assuredly
come out of hibernation. And when it does, it will be the stronger for it.

Many companies will emerge stronger, too. As Penn State research professor Gary Lilien put it, those that have
"the skill, the will and the till" will be able to market their way through these tough times and end up on the other
side with a stronger market share and a more powerful brand position.
Source: www.eMarketer.com

How the Old, the Young and Everyone in Between Uses Social
Networks

JULY 30, 2009

Social networkers utilize popular Websites such as MySpace, Facebook, Twitter and LinkedIn in different ways
depending on their age.

According to Anderson Analytics,

Generation Z (13-to-14-year-old) social
network users were more likely to use
MySpace than Facebook. Only 9% of them
used Twitter and none used LinkedIn.

Generation Y was a somewhat different

story. Three-quarters of 15-to-29-year-olds
used MySpace, 65% used Facebook, 14%
used Twitter and 9% used LinkedIn.

Generation X, 30-to-44-year-olds, and baby

boomers, 44-to-65-year-olds, connected on
LinkedIn more than any demographic.
Nine in 10 older social network users, which Anderson Analytics called the WWII generation, used Facebook, and
17% tweeted.

When it came to why social networkers joined a social network, however, the reasons were similar from
generation to generation.

Sizable percentages of every age group wanted to keep in touch with friends, have fun or stay in contact with
family, or had been invited by someone they knew. The youngest users were most likely to be interested in fun and
friends, while family contact appealed more to older social networkers.

Very few users of any age joined for business-related purposes such as recruiting potential candidates, sales, job
searches or business networking.

“Due to the difference in age of the users, the interests of users are naturally different,” wrote the authors of the
report.

“LinkedIn users are more interested in luxury activities, Twitter users are more interested in pop culture and
MySpace users are more interested in humor/comedy and video games.”
Source: www.eMarketer.com

Why People Use Twitter

- JULY 28, 2009

What drives people to tweet?

According to the “Consumer Internet

Barometer” from TNS and The Conference
Board, 41.6% percent of Internet users who
used Twitter did so to keep in touch with
their friends.

In addition, 29.1% used it to update their

status, 25.8% to find news and stay updated,
21.7% for work purposes and 9.4% for
research. Men and women both used Twitter
primarily to keep in touch with friends.
Secondarily, men were interested in finding
news and women in updating their status.
Users under age 35 were more interested in
broadcasting their status than their senior
counterparts.

Older users were more likely to use the service for

work-related purposes. The average Twitter user
interacted primarily with friends and family.

Next-most-popular were celebrities, bloggers, TV

shows, co-workers, brands and journalists.

More women interacted with friends, family and

celebrities than men, but men were more likely to
follow bloggers.

Older users trailed younger ones in interaction with

every Twitter user type except journalists and
brands.

Who can Twitter users blame for their addiction?

One-half of tweeters said a friend or family
member introduced them to the site and 33% were
hooked by a co-worker.
Source: www.eMarketer.com

Twitter’s Massive Growth in 2008: 752 Percent

There’s little doubt that Twitter was one of the most talked about startups over the past year.

But just how much did it grow in 2008? The final numbers are in, and according to Compete, they’re astounding:
752%, for a total of 4.43 million unique visitors in December.
After starting the year with only around 500,000 unique monthly visitors, Twitter saw its most dramatic growth in
the back half of ’08, picking up more than one million additional visitors in December alone. And that’s all just in
the US. Here’s the chart:
Also notable in the just-updated Compete stats: Facebook closed ’08 by passing MySpace in US traffic by the
slimmest of margins. While other stats services still show MySpace with a significant lead, the report we most
frequently cite – Nielsen Online – has also shown a rapid closing of the gap in recent months. Look for those stats
on Mashable in the next week or two.
 Consumers Rebel Against Irrelevant Promotions

Though 64% of consumers say promotional offers dominate both the email and traditional mail
they receive, only 41% view them as must-read communications and many even steer clear of a
brand in protest of such irrelevant mailings, according to a study by the Chief Marketing Officer
(CMO) Council and InfoPrint Solutions Company.

The study results, the CMO Council said, point to an overall dissatisfaction with the shotgun
approach to promotional message and demonstrate that consumers are taking more control of
in-bound communication channels, unsubscribing to irrelevant email, and defecting from
brands that deliver irrelevant content and random mass mailings. In fact, some 41% of overall
respondents say they would consider ending a brand relationship because of irrelevant
promotions, and an additional 22%  say they would definitely defect from the brand.

In a more specific example of this behavior, of the 91%  of consumers who opt out or
unsubscribe to emails, 46% are driven to brand defection because the messages are simply not
relevant, the report said.

Consumers Want to Be Understood

The study found that, when given the opportunity to choose, 51% of consumers prefer to
receive product or service promotions via traditional mail while 44% prefer email.

More importantly, however, the study also revealed that while marketers continue to weigh
the pros and cons of email vs. printed postal mail, consumers are much more concerned about
the level of individualization and understanding of their needs and relationship with the brand.

“Irrelevant, impersonal communications, be it email or traditional mail, is a waste as it does not

engage a receptive recipient,” said Liz Miller, VP programs and operations, CMO Council. “It is
no surprise that consumers are opting out of irrelevant emails. However, what is a grave sign
for marketers to heed is that customers will disconnect and stop doing business with brands
who continue to send messages that demonstrate a lack of intimacy, customer insight and
individual understanding.”

Additional report findings:

 The type of emails that are most often “always” opened are monthly bills, followed by
bank statements.
 90% of consumers open monthly bills delivered via traditional mail, compared with 72%
who open bills delivered via email.
 Nearly 75% of consumers have received promotions for products they have previously
purchased from a company.
 73% of consumers would be open to receiving print statements if mailed materials were
recyclable or part of a sustainability program.

Role of Loyalty Programs

Even when marketers have deeper engagements with customer, as with loyalty clubs and
rewards programs, they are often missing the mark in delivering meaningful messages, the
study found. Only 6% of consumers feel that the promotions received through loyalty club
communications were based on preferences or past purchasing behavior. The result of this
mixed bag of messages, according to the report, is that marketers are missing the opportunity
to drive loyalty and affect purchase intentions. To this end, 30%  of consumers say they are
inspired to do business with a company after receiving personalized communication.

“Staying relevant, valued and connected to customers has become the number-one challenge
for marketers today,” said Sandra Zoratti, VP of global solutions marketing at InfoPrint Solutions
Company. “There is a real need to adopt precision marketing approaches that utilize more
tailored and targeted messaging throughout the entire customer life cycle.”

Additional data included in the report:

 Traditional junk mail accounts for more than 100 billion pieces of mail each year, and
44% of this unsolicited, primarily promotional mail ends up in a landfill unopened.
 There are more than 200 billion email messages sent each day, yet 97% of all email sent
is actually spam, according to an April, 2009 report released by Microsoft.
 Cisco reports “customized” spam that is based on personal information stolen from the
web has quadrupled over the last 12 months (2009).
The average email open rate across 16 industries during Q209 now stands at 22.2%, and
has increased for the fourth quarter in a row (via Epsilon).
 About 3.3% of opt-in emails for subscribers in the US and Canada were sent to “junk” or
“bulk” email bins, while 17.4% did not get delivered at all (via ReturnPath).
 Forrester reports that by 2014, email marketing spend will rise to $2 billion - almost
double the projected spend of $1.2 billion for 2009.
 The average individual is expected to receive 25 messages a day in five years, double 10
or 12 emails received now. (via ReturnPath)
Source: http://www.marketingcharts.com

Retail E-Commerce Sales Rise in Q309

November ‘09

US retail e-commerce sales in Q309 rose 4.5% on a quarterly basis, from $32.5 billion to $34
billion, according to the US Census Bureau. On an annual basis, they rose 1.8%, from $33.4
billion.

As a percentage of overall US retail sales, e-commerce sales slightly rose on a quarterly basis,
from 3.6% to 3.7%. On an annual basis, they rose from 3.4%. In terms of dollar value, overall US
retail sales totaled $922.2 billion. This represented a 1.7% increase from $906.4 billion in Q209
and a 7.5% decrease from $997 billion in Q308.

The retail industry has displayed a number of signals this year suggesting e-commerce is
growing in popularity with consumers. Amazon.com, the leading “pure play” e-commerce
retailer, reported strong Q309 results, with a 68% increase in net income and 28% increase in
net sales, reports Retailer Daily.

In August, the world’s largest retailer, Wal-Mart, introduced Wal-Mart Marketplace, a new
program that expands its online product assortment to more than one million items. Walmart
Marketplace enables a select group of retailers to offer additional products at Walmart.com,
expanding Wal-Mart’s assortment in categories including home, baby, apparel, and sporting
goods.

In addition, e-commerce sales appear to be taking over the movie rental marketplace. While
poor in-store DVD rentals contributed to plunging same-store sales for consumer
entertainment retailer Blockbuster in Q309, leading online movie rental retailer Netflix
reported substantial increases in its revenues and subscriber base during the same period.

The struggling book retailer niche is even experiencing some success with e-commerce. Despite
otherwise poor financial results, Barnes & Noble reported a 2% increase in online sales during
its most recent fiscal quarter. Barnes & Noble and its chief competitor Borders have both
launched a number of new e-commerce features this year.

In addition, several research studies suggest e-commerce sales have been going up this year. A
new report from payment solutions provider CyberSource shows that online fraud losses for US
and Canadian retailers are expected to drop 17.5%, from $4 billion to $3.3 billion. By
eliminating nearly one-fifth of bad online transactions, online retailers have boosted their sales
results.

In March 2009, a study from comparison shopping company PriceGrabber and Market
Reporter, found that US consumers are reacting to the current economic crisis by doing more of
their shopping online. The study also indicated online consumers are slowly becoming more
willing to spend money.

More recently, the Shop.org Quarterly Online Sales Update showed that in Q309, 72% of online
US retailers experienced increased sales.