Over 10pc of marketing budgets committed to online

9 Oct 2008

Geo-targeting online and newer forms of online promotion are becoming standard weapons of choice in the marketing professional’s armoury, and now the majority of Irish marketers are committing more than 10pc of their marketing budget to the internet.

According to Independent Digital, the Irish Independent’s digital publishing arm, advertising clients are demanding more innovative and creative proposals.

“We have seen a very healthy growth in the conversion to online media in the past year, clients are becoming more savvy and are demanding more creative and innovative proposals,” explained Eileen Ruddy, group online sales director at Independent Digital.

“Geo-targeting online is becoming an increasingly valuable tool for our clients, as they look for ways to tailor messages and offerings to customers living in different geographical areas.

“In addition, businesses focusing solely on certain geographic locations are looking to deliver their campaigns and tailor messages and offers to customers in their local areas with limited waste of revenues. Measurement of quality time, clicks and value for money are key metrics for our clients,” Ruddy explained.

According to a survey by Amas, key decision-makers are embracing online in greater numbers, and the majority are now committing more than 10pc of their budgets to online advertising and promotion – a sizeable shift in recent years.

The survey shows that email campaigns are the most popular form of online advertising and are used by 64pc of respondents, with search engine optimisation on sites such as Google and Yahoo! being the next most popular form, with usage levels at 46pc.

Banner advertising is the next most popular, accounting for 41pc.

Newer forms of online promotion are also gaining, with 20pc using blogs or social networks to promote their products or services.

And SMEs are the biggest fans of online – the survey found that for some online advertising formats they are converting at a much higher level than businesses employing 200 or more.

In the small business sector, some 66pc use email marketing campaigns, compared with 48pc among bigger businesses.

Companies like the online option because of a combination of reach, low cost and measurable responses from clients.

ISME chief executive Mark Fielding agrees that, while the initial uptake was slow, the past two years has seen a huge interest in the internet by small- and medium-sized firms.

“From our own perspective, we have certainly seen a surge in interest, and it has been gathering momentum,” he says. “In the Eighties, a lot of naive firms were sold a ‘pup’ in terms of software, but now they have discovered the advantages of the web as a low-cost business outlet.

“It took some firms a long time to get involved, but now they also see their websites as an excellent tool for advertising,” he said, adding that ISME is continuing its lobbying of Government regarding better broadband penetration.

“It’s a bit like the curate’s egg,” he said, “it’s good in parts.”

The ability to see exactly how many people look and click on an ad, and in turn convert to sales, is proving very popular with advertisers who find other mediums less transparent – in other words, they see exactly how much ‘bang’ they are getting for their ‘buck’.

According to Net Behaviour director, Justin Cullen: “Today, all media are under pressure. However, against this, digital media will come into its own, and not before time. When embraced and harnessed correctly, digital media has the ability to help businesses create the efficiencies required to tackle today’s pressures.”

In the UK ,advertising accounts for 17pc of total ad spend. In Ireland, the figure is only 4pc, but there are signs here too that real momentum is starting to build.

According to market researcher eMarketer, the Irish online advertising market will be worth €100m in 2008, and will grow by 40pc year-on-year over the next five years, driven primarily by search and display ads (up 56pc and 40pc respectively, in 2008).

The US Presidential candidates and consumer products like Snickers, (which is targeting Superbowl fans), are all part of a growing community of people now using sites such as Facebook and YouTube to target younger audiences.

These sites were also used extensively during the recent Lisbon Treaty in Ireland, and are likely to become as vital a medium as television as politicians and major corporate companies twig the value of their potential, and relatively low cost, in reaching voters and consumers.

“You have to keep up with new technology,” observes Vincent Gribbin, head of internal communications with Fine Gael. The party set up a dedicated website for the recent Lisbon Treaty and advertised it on websites and TV channels, such as Sky News.

Fine Gael also has its own YouTube account where it uploads videos of interest to party members, and also to target a younger audience. “Mind you, there are plenty of not-so-young people who are quite web-savvy,” said Gribbin. “And we are constantly reviewing all elements of our IT strategy.”

The party also uses email alerts and publishes a regular ezine to keep the public up-to-date with new policy documents and statements.

“We have substantially expanded our use of email in recent times,” Gribbin said, and pointed out that SMS is another useful tool for the party in getting its message across.

By John Kennedy

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years