Wednesday, October 3, 2007

More Marketing Dollars or Smarter Marketing Dollars?

Several times recently I’ve been in involved in discussions that centered around, “Is it the time to be spending more money on marketing?” In each case I’ve patiently tried to explain that it’s probably not the right question. The question is, “How can I get more out of my marketing dollars?” I think this is the voice of sweet reason, but it’s amazing how hard it is to get C-level executives to focus on the implications of the question.

Part of the answer is straightforward. It’s the reason that Internet advertising is growing between 20 and 30% this year. It’s the reason that both email marketing and email advertising expenditures are growing by leaps and bounds around the world. The online tools reach more people more cheaply than offline media. And those are just what I call the “traditional (Web 1.0) tools.”

What about the Web 2.0 tools? Everyone has their own list. Mine is:
• Blogs
• Social Networks
• Personalized Search
• Wikis
• Podcasts
• Mash Ups
• Collaboration Tools.
What is yours?

What do these tools have in common? They all allow for the kind of “non-linear” communications Don Schultz talked about. You can find free hosting services or free software for all of them. Each allows marketers and users to communicate directly, without communications being filtered, without having to call on IT for assistance. The barriers are down!

Marketers currently spend a lot of their dollars on traditional mass media. That can be expensive. If the Web 2.0 media are essentially free, that’s a huge opportunity for saving those marketing dollars.

But wait a minute! The cost of these media is the time of people whose expertise is in short supply. In June eMarketer quoted (“E-Mail Marketing Budgets Boom,”June 22) a study of 630 marketing executives by Jupiter Research. It found that expenditures on email marketing personnel increased from an average of $169,710 in 2005 to $182,067 in 2007. Average salaries of individuals increased from $50,526 to $63,547 during that time. If you can find them, that is!

In that enewsletter David Daniels of Jupiter said, "While salaries are up, they are not up enough to support most companies' ever-burgeoning e-mail marketing efforts. E-mail marketing budgets do not match the strategic importance of actual marketing programs." And here again, we are talking about one of the established Web 1.0 tools, not the newer Web 2.0 tools.

Where is the barrier in your own firm? Is it lack of understanding of the new media? Is it inability to design and execute new media programs? And what should you be doing about that?

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