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Monday, January 22, 2007

ICA Study: Canadian Marketing Budgets Rising, But Online Spend Still Paltry

Kia Canada intends to spend more on marketing to increase share in a shrinking sector - but how will online fare?

According to a survey of 270 Canadian marketing directors, the current makeup of marketing and ad budgets at larger companies is as follows:

Traditional media advertising: 41%
Sales promotions incl. coupons & contests: 20% (!)
Direct marketing: 17%
Internet marketing: 4%
Other, incl. sponsorships & PR: 18%.

I had to rub my eyes when I saw that. Internet marketing - 4%? Given the low costs of clicks in Canada, that puts search advertising at maybe 1.6% of the overall spend. Glass half full: that's a lot of room for growth.

Here's what I think is going on, though, that makes the reported figure come in lower than expected (I would have expected about double that).

First, search spending is granular. In some fields it's going to be ignored completely, or simply dwarfed by what companies can and will spend on media like television. In other, quite specific, areas, it might make up 20%, or 50%, or 99%, of the spend.

Also, the cost of building websites, creating content, optimizing sites for conversion improvement, optimizing sites for organic search, and so on, probably doesn't get listed as a "marketing spend" in a survey like this, but that's basically what it is. In the reverse broadcast network, no one can hear you spend. But it still gets you customers. Presto!

As the home page of one ad agency puts it: "It's about ads that don't look or feel like ads. Media measured by more than GRP's. Or that can't be found or bought on a rate card. It's about owning a larger share of tomorrow by looking beyond work that only works today."

Posted by Andrew Goodman




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