According to Forrester Research, reported by Richard H. Levey at Directmag.com, 60% of marketers surveyed will increase their interactive marketing budgets by shifting funds from traditional media. Direct mail was cited by 40% of marketers as being one being cut, outranking newspapers (35%), magazines (28%) and television (12%).

Among the interactive channels, the study finds social media and mobile marketing spending expanding between 2009 and 2014, with social media jumping by 34% on a compounded annual basis and mobile marketing increasing by 27%. Social media starts at $716 million in 2009, increasing to $3.11 billion by 2014. Mobile marketing expenditures stand at 319 million this year, and goes to $1.27 billion by 2014.

Online display advertising, which currently stands at $7.83 billion, will rise by 17% annually, ending up at $16.9 billion in 2014. Search marketing, which currently accounts for $15.39 billion in spending, will jump by 15%, to $31.59 billion, and e-mail, now at $1.25 billion, will increase 11%, to 2.08 billion.

Shar VanBoskirk, Forrester analyst, says "Email marketing is having a banner year as marketers:

• Grow their lists with the promise of ‘green marketing'
• Turn on more and smarter programs to boost sluggish sales
• Shift money to email from direct mail
• Improve email effectiveness by linking it to other channels like search or user-generated ratings and reviews."

And, while social and mobile media expand, a corollary report from Forrester shows marketing officers reporting that budgets for traditional media, such as television, print, radio or magazines, along with staff and training spending and branding and advertising expenditures had been cut by two-thirds from last year's levels, and more than half of their direct mail budget was gone.

Budget reductions from the 2008 level include:

• 29% reduction in marketing technology
• 27% in online advertising
• 22% in Web site development budgets were reduced
• 21% reduction in loyalty program spending
• 11% reduction in E-mail marketing
• 7% in social media spending from the 2008 level

Among CMOs facing lower budgets:

• 19% said they cut branding and advertising because "I can't track its results"
• 26% said the same about their TV, print, radio or magazine expenditures
• 19% reduced their direct mail spending because it delivers the lowest ROI

On the other hand, 47% of CMOs whose budgets have been cut are increasing their spending on social media, while another 44% are increasing spending on Web site development. 40% will spend more on online advertising, and nearly that amount will increase financial resources in e-mail, considering these functions critical to their businesses, or needed to maintain competitive advantages.

In a glimpse into how marketing is viewed throughout a number of organizations, just over half of the CMOs see it as a revenue enhancer that needs to be supported. But 41% indicated marketing efforts are under increasing scrutiny from all levels of the company, and 18% are working in firms where marketing is seen as a cost center that needs to be cut.

A study, recently released by WorkPlace Media, outlines some of the hurdles facing major brands as they attempt to harness the worlds of Facebook, Twitter and MySpace, to create an impact with consumers.The study, which polled office Internet users, found that 55% maintained at least one social networking account. However, of those respondents, only 43% reported accessing their social networking accounts at work, and even for those with access, 78% reported spending less than 30 minutes per day on their site(s).

The overall impact of a brand's presence on social networking sites was shown to be minimal in terms of impact and perception. 96% of respondents said their opinion of a product brand did not change if that brand had no presence on a social networking site, and only 11% of social networking users reported following any major brand through a social networking site, and just 12% of respondents said their opinion of a brand changes if that brand maintains a social networking presence.

Stephanie Molnar, CEO of WorkPlace Media, says "When it comes to influencing brand perception and purchase decisions... social networking... has a long way to go."

A recent Harris poll also supported this assertion, says the report, showing that word of mouth is a much stronger influencer than social networking. When a group of adults were asked about their information-gathering process for the most recent purchase they made,

• 21% of Harris poll respondents cited "face-to-face with a person not associated with the company, such as a family member, business colleague or friend."
• 12% cited a phone call with someone similar
• 4% mentioned using "public online social-networking sites, such as Facebook, LinkedIn or MySpace"
• 4% mentioned "private social networking sites, such as customer communities"

According to additional findings from the WorkPlace Media survey, Facebook was the clear winner in terms of users:

• 89% of respondents reported having a Facebook account
• 40% MySpace
• 31% LinkedIn
• 18% Twitter

When asked what appeals about social networking:

• 89% said it "allows me to stay connected to friends/family."

Of the 18% who reported acting upon a business or product recommendation from social networking sites, the leading categories were:

• Entertainment (53%)
• Dining Out (50%)
• Groceries (23%)
• Beauty Care/Cosmetics (21%)
• Apparel (20%)
• Electronics (15%)
• Pet Care (15%)

Only 15% of polled businesses expect to see a decrease in customer sales in the second half of the year, which is a dramatic improvement over the 37% who responded similarly in StrongMail's December 2008 survey.

According to the report, businesses currently project that 34% of customers will spend more in the second half of 2009, versus only 19% in the December survey, while an additional 31% project that customers will spend the same.

Planned investment in email marketing has also increased, with 81% of businesses planning to increase budgets targeting this channel, versus 73% in December 2008. Additionally, social media has emerged as a significant focus for increased investment, as reported by 58% of businesses.

Advertising and tradeshows were again singled out as the top targets for budget cuts:

• 78% of businesses decreasing budgets are targeting advertising
• 58% are also looking at tradeshows

This represents a steep increase from the December survey results of 29% and 19% respectively.

The report says that increasing email relevancy and personalization remain top priorities for the latter half of 2009 for 77% of the businesses polled. The top three email marketing initiatives identified for the latter half of the year reflect a desire to improve relevancy, with 66% of respondents looking to increase the performance of their campaigns, and 52% looking to improve segmentation and targeting. Growing their opt-in list attracted the third highest response at 45%.

Survey Highlights

• 85% of businesses plan to increase or maintain marketing spend in the second half of 2009
• 34% of businesses expect customers to spend more; 31% to spend more
• 15% to spend less
• 81% of companies increasing budgets are doing so in email; 58% in social media
• 78% of businesses decreasing budgets are cutting advertising; 58% in tradeshows
• 77% of businesses plan to increase email relevancy

Bill Wagner, executive vice president of business operations at StrongMail Systems, concludes "The fact that planned investments in email marketing have actually increased in the past six months, at the expense of more traditional marketing channels, speaks to email's status as the most economical and effective tool in a direct marketer's tool box..."