Budgeting for digital
Internet Advertising has experienced a meteoric rise in recent years and in 2006 accounted for 11.4% of the total advertising market in the UK.
It has been interesting to watch the shift from traditional marketing channels to the internet. What seemed like a slow start has turned into a massive flight to online, underpinned by solid return on investment metrics.
Perhaps what is more interesting is to observe how some companies struggle to get to grips with digital and seem unsure of how to plan and budget for their online spend.
Back in the old days the marketing department would produce a marketing plan for the year and the budget would be set in stone. It was unlikely that you would get any more money until the following year.
But does this model work for digital marketing, where feedback and results are far more instantaneous and opportuntities present themselves on a more dynamic basis?
I often see big brands pausing their paid search campaigns or pulling their affiliate programs because they have 'run out of budget'. Apart from annoying the affiliates (which is bad enough), it seems absolutely ridiculous that you would pause an activity that is producing your lowest cost per acquisition just because you didn't put enough into the budget!
Surely digital requires a different approach? The results and feedback are instantaneous so the approach to budgeting needs to be fluid. It seems commonsense to me that marketing spend online should be tied to cost per acquisition (CPA). As long as the target CPA is met I see no reason to limit the budget.
Of course I understand that in the world of the big corporates this kind of flexibility is almost impossible to achieve, but they need to be aware of smaller companies out there who have adopted this flexible CPA model. This means that when those big brands 'run out of budget' the small fish are left to soak up all the sales!
The internet backlash
Over the last couple of months I have noticed a few articles starting to appear in the national press which suggest that the Internet is destroying the very fabric of our society.
The argument of some 'professional' journalists seems to be that the Internet is responsible for all things bad in society today. They point towards a dumbing down of our culture and suggest that "the Internet is responsible for a fall in academic standards, the collapse of the music and movie industries and has turned a whole generation into gambling and pornography addicts".
Perhaps it's just me, but I find these views rather extreme and not very objective. Whilst I accept that the Internet has it's negative points, I would say that on balance it has enriched our society and liberated our culture.
I wonder if perhaps these national newspaper journalists feel threatened by the very presence of the Internet? Perhaps this would be an explanation for why they feel compelled to attack it in such a vicious way.
Personally I prefer to focus on all the good that has come about as a result of the Internet. I marvel at this wonderful communication tool and wonder how I ever managed without it.
Of course it is true to say that the rise of the Internet has resulted in some negative outcomes, but surely the same could be said for Radio, TV and all other forms of mainstream media that have passed before it. After all, the Internet (and other forms of media) are surely only a reflection of human culture?
The opinions expressed herein are the personal opinion of the author and are not intended as statements of fact and do not represent the view of Coastdigital Limited in any way
