January 16, 2006

New Study: Biggest Internet Marketers Rate Best & Worst Tactics of 2005 + Reveal 2006 Plans

SUMMARY: What are some of the world's heaviest Net marketers planning for 2006? Discover the answer in MarketingSherpa's third annual ad:tech study. We quizzed 680 marketers who spend an average of 44% of their total ad and marketing budgets on the Web. Key results: o Search takes the top spot from email o Search averages 34% of online budgets o Behavioral ads have lost some of their luster o RSS feeds and in-house blogs are favorite 'emerging tactics' See details and six handy charts below:
Every December ad:tech and MarketingSherpa partner to survey the heavy hitters of online marketing to look back at what’s worked, and ahead at planned spending. 

This year 680 marketers responded to our late December survey. On average, they spent 44% of their total advertising and marketing budgets online last year. Here's what they had to say:

#1. What worked (and what didn't) this year in online ads & marketing

Over the past few years, search and email have been neck and neck in the race for top performer among online marketing tactics. Email to house lists has edged out search, until now. 52% of marketers said that search performance is ‘Great – outperforms other tactics’ compared to 47% for house email. In fact, favorable evaluations for both tactics rose from last year’s survey (41% for search and 45% for email) – but the nearly 10 point rise for search carried the day.

Why the jump in positive feelings about search? One reason may be that keyword prices stabilized in the second half of the year, so marketers are getting more for their money. At the same time, top marketers (and ad:tech attendees tend to be ahead of the curve) are increasingly using more sophisticated methods for identifying high performance keywords, such as scanning weblogs for keywords that correlation with conversion.

Meanwhile, email to house lists remains a solid second fiddle. Unlike search, where pricing, tactics and technologies are in flux, email returns and methods were largely stable in 2005. Though open rates declined due to filtering, clickthrough and conversion rates were essentially flat year over year.

For the first time, behavioral targeting lost some ground, dropping from third to the fourth spot in our ‘Great’ performers list, and getting a 36% rating for strong performance, down from 41% in last year’s survey. That’s not a huge drop, but it may be significant because it’s the first time that the tactic has lost ground.

These charts detail the two ends of the spectrum of marketers’ tactical evaluations. First, the percentage of marketers describing ‘Great’ results:

And, the breakdown for tactics getting ‘Poor’ reviews:

Rented lists stayed ‘on top’ for 2005, with negative reviews hitting 52%, up from 43% the year before. That said, in a separate question asking marketers what they’d invest in if they had some ‘extra’ budget, email lists score well. It may be that marketers aren’t putting the necessary dollars into list rental to see decent returns. Bargain hunters in this area tend to see poor results.

The other big mover in 2005 was the banner ad category, with a rise in negative reviews from 24% to 39% in this year’s survey. The explosion in rich media ads may be the cause, as traditional banners have to fight for attention with more compelling media (see the upswing in interest in video ads below).

#2. 2006 budgets – where’s the money going?

While the ranking of tactics by budget investment didn’t change a great deal from 2005, the number of marketers planning ‘substantial investments’ did. Search jumped from 24% up to 38%, and online ads saw the largest increase of marketers projecting substantial increases – from only 16% in 2005 to 36% for 2006.

Here’s how all the tactics fared:

With search on everyone’s mind in 2006, we asked about the percentages of marketers online budgets devoted to that tactic. The ‘average’ online marketing budget sees 34.4% going to search. However, it’s worth noting that the most common percentage spent on search (the mode) was 20%. At the high end, 1 in 4 markets in the survey predicted that they’d spent 65% or more for search in 2006.

The importance of search is also evident in where marketers are planning on spending for measurement and analysis. The top four categories all reflect the increasing importance of search, and its requirements for better analytics of where visitors come from, who they are, and the best methods for converting them.

The chart in full:

#3. RSS, blogs and video will see significant action in 2006

This year for the first time, we asked marketers about their interest in a number of the newer, ‘emerging’ tactics. We asked them which tactics they were spending on, and which they felt were still maturing. Many of these tactics, like podcasting and ad placement in video games, are still in the early adopter phase. Others, like blogging and video ads, seem to be moving into the mainstream of marketing.

Emerging tactics, by the numbers:

We also asked marketers how they’d experiment if given 100k for that purpose. There was a tie at the top between mobile and video. Looking at the charts in concert, it appears that mobile will be the next tactic to make the jump to the mainstream, following video, RSS feeds and blogging.

How would spend 100k on experimenting with new tactics:

Useful links related to this article:

ad:tech http://www.ad-tech.com

Last year's ad:tech study results: http://www.marketingsherpa.com/article.php?ident=23812

Improve Your Marketing

Join our thousands of weekly case study readers.

Enter your email below to receive MarketingSherpa news, updates, and promotions:

Note: Already a subscriber? Want to add a subscription?
Click Here to Manage Subscriptions