More than two thirds of marketers are expecting a rise in their online spending next year, according to new research.
The study, from affiliate network, LinkShare, explores what companies are expecting from their online marketing activity in the run up to Christmas and during the New Year.
Over two thirds of respondents (68%) believe 2011 will bring an increase in digital marketing budgets – this is despite the impending rise in VAT. In addition, over half of professionals surveyed (53%) anticipated that the VAT increase will have either little or no impact on consumer spending, with just 10% stating it would lead to a decrease in marketing budgets next year.
Commenting on the findings, Liane Dietrich, MD, LinkShare says “Overall, the results were encouraging for marketers, revealing confidence in the performance of the digital industry in a time of continued economic uncertainty”.
The impact of VAT
Responses were mixed when it comes to speculation over what the impact of the VAT rise on the industry would be. 30% expect to see a bigger focus on targeted campaigns compared to mass marketing techniques, with a fifth of companies planning to streamline their processes to increase efficiency and 18% anticipating 2011 will encourage a greater emphasis on measurement and ROI.
Demonstrating confidence in the industry’s performance, only 18% thought their budgets would be cut as a result of limited resources and just 7% predicted a lack of funds would cause their company’s creativity to be stunted.
The rise of video advertising
When asked what was expected to be the most influential online marketing format in 2011, the results covered a wide range, demonstrating the increased importance marketers now place in incorporating a variety of tools and tactics into their campaigns. Almost a third (30%) believed video advertising would be the most widely used digital format and this was closely followed by ads on personal social networks (28%). Vouchers, promotions or special offers received 17% of the vote, interactive ad banners 7%, sponsored search engine links 6% and traditional banner ads and ads on professional social networks each obtained a 2% share.
Looking at the planning of online marketing activities during the run up to Christmas, the research found marketers will be using social media and vouchers to help encourage spending. Moreover, 43% of marketers believe social media orientated campaigns will be most widely used by marketers, followed by online vouchers and offers (37%) and adverts contained in online video (17%). Despite the recent hype surrounding the growth of augmented reality, it appears this area is yet to make breakthrough into marketing campaigns as only 2% of respondents plan to incorporate it into their seasonal sales strategies.
“The research is good news for the industry as we head closer to the rise in VAT and it’s definitely a positive sign that marketers are recognising the need to spread their reach far and wide by preparing to invest more heavily in their digital strategies” comments Liane Dietrich. “A call for more targeted and measured campaigns is certainly in line with what we are seeing from our own customers who are looking to increase their efficiency and after the Christmas sales boom this will remain important. Affiliate marketing provides a good opportunity for those wishing to adopt this approach, as it is a targeted online marketing tool which can be closely monitored and tailored for the client to maximise ROI.”
LinkShare surveyed 80 marketing professionals during the Advertising and technology (ad:tech) exhibition in London on 23rd September 2010.