August 26, 2011
I've received a few questions and have seen some social conversations around the theme "marketing is not advertising" relating to my recent interactive marketing forecast. I in no way meant to imply through the research that marketing and advertising are the same thing, nor is this the point of the research. So if you are hung up on that notion, let me 1) provide a bit of background on the report, 2) recommend that you read the full report — I think inferring conclusions from the summary slide published in AdAge may be confusing without our detailed definitions, and 3) iterate that the primary conclusion of the report is that spend on interactive media and technology is no longer experimental, but now established budget line items.
I've worked on this report since 2004, and the report originally began as an online *advertising* forecast — sizing spend on online media, which at that time was primarily display ads. We've done the report 5 times since 2004, and with each new report, it became clear that budgets were growing to include other investments besides online media. So we have adjusted the forecast to best represent what is included in clients' interactive budgets.
Now, a few points here: We can only size what we can accurately count, which is primarily 1) media spend, 2) money changing hands for a dedicated technology — like a social listening platform or email delivery; 3) money spend on agency fees for a dedicated channel — e.g. search media management, building a branded community. Of course 2 and 3 are not *advertising* investments, but they are fees coming out of our clients' interactive budgets, which 71% of the time come out of traditional budgets for advertising media (like print or TV) or for direct marketing or events.
We don't size spend on technologies which could play multiple roles within an organization — like a customer database. We don't size internal staffing costs. And we don't size general agency fees. In some cases, these fees also come out of clients' interactive marketing budgets. But we can't accurately size what of these fees goes toward marketing v other business functions, so we can't include it in our forecast.
One last point here: I do represent total interactive spend as a percent of total advertising. (Total interactive spend = everything we size in the report. Total advertising = spend on advertising media; it does not include direct mail, events, call center costs, investments which I would not consider advertising). I do this primarily to show the relational size of the growing interactive investment and because so much interactive growth is coming out of traditional advertising budgets.
I hope you'll conclude from the research not that marketing is the same as advertising, or that online "kills" traditional advertising. What I hope readers come away with from this research is that interactive media and technology investments in 2016 will count for as much money as their TV advertising budgets do today, because interactive efforts now play a legitimate — not experimental — role in how businesses attract and retain customers.