Online activities now consuming almost a quarter of marketing budgets

Blackfriars published our ninth quarterly Blackfriars Marketing Index today (you can read the press release here), setting the first quarter value to 106. That means that budgets in the first quarter of 2006 are only about six percent higher than they were in our baseline year, 2003. Given that actual spending usually comes in at between 70 to 75 percent of budget, that's not good news for marketers. Bottom line: companies are spending less on marketing this year.

But there's more here than meets the eye. Blackfriars has been noting a shift away from advertising to more non-traditional marketing efforts for about six months now. And with our new survey, we can now see more detail around what that shift looks like. As we look at 2006, the new marketing landscape is quite different from when we started looking at marketing budgets, attitudes, and spending back in 2003. What's different this year is:

1. Advertising is shrinking as a percentage of budgets. When we started our surveys more than two years ago, advertising was king, consuming nearly a third of marketing budgets. With this year, that number has fallen to only 23%, or less than a quarter.


2. On-line marketing has become huge. With our new surveys this year, we are now tracking online advertising, email marketing, and non-advertising-based Internet marketing through web sites, blogs, and podcasts. The bombshell: On-line activities are now 23 percent of marketing budgets for 2006. Why the change? Companies have found on-line marketing to be more efficient and more measurable than traditional media, making it an easy sale to corporate executives.


3. Non-traditional marketing become, well, traditional.. Buzz, word-of-mouth, and viral marketing were pretty radical ideas in 2003. Now, companies are allocating almost a tenth of their annual budgets to these activities, and they have become just another arrow in the professional marketer's quiver.

One bright note in what currently appears to be weak spending on marketing in 2006: it's not at all clear that marketing activity has declined at all. What has happened is that online advertising, podcasts, blogs, and buzz marketing are all cheaper ways to for companies to get their messages out. Therefore, while budgets may be declining, companies are still doing as much or more marketing than they did before; they are just doing it in different ways.

Commercial message: For anyone who wants to dive deeper into how marketers plan to spend their budgets in 2006, you can pre-order the 20-page Q1 report from Blackfriars at the Blackfriars eStore.

Technorati Tags: Advertising, Blogs, Buzz Marketing, Internet, Marketing, Marketing measurement, Non-traditional marketing, Podcasts, Podcasts, Retail, Word of mouth