Media Dollars Shift to Digital in Downturn: eMarketer

Spending recovery will lag economic recovery

SEPTEMBER 16, 2009 – The economic downturn is causing most marketers to decrease media spending budgets, and the remaining expenditures are shifting further toward digital, according to a Q2 2009 survey by Round2.

More than two-thirds of senior executives in the Western US responding to the “2009 Media Survey Results & Analysis” reported their media budgets would decrease at least somewhat in 2009 compared with 2008. Still, almost one-quarter expected spending to climb by up to 10%, and a few respondents reported even greater increases.

While a majority of respondents said they would hold budgets for each medium except print steady in 2009 compared with 2008, digital was still the clear winner. Budgets were more likely to be cut than increased for traditional media such as TV, radio and direct mail, but more respondents said they would up their investments in e-mail marketing, search and interactive than said spending would be reduced.

E-mail marketing was the channel most likely to see an increase in spending in 2009, and print was the biggest loser. The across-the-board shift from traditional to digital media is no surprise-it represents a general reallocation of marketing budgets to newer media channels.

Media spending cuts due to the economic downturn tended to fall most heavily on print, where spending had previously been highest. Just 1.8% of respondents reported cutting each of e-mail marketing, search and interactive because of the recession. Online advertising may not be immune from economic problems, but it is well-insulated.

This is in line with estimates of US advertising spending on various media. For example, Barclays Capital predicted in its “Internet Data Book July 2009” that spending on every medium but online would decrease this year.

Very few marketers in Round2’s survey were prepared to move forward aggressively with their expenditures in the down economy. More than 37%, however, said they would be looking for new media opportunities. The next-most-common answer, with 35.7% of respondents, was to spend the bare minimum until the economy recovers. About one-fifth of marketers reported doing “business as usual” despite the downturn.

Asked when they expected to see economic recovery, almost 60% of marketers said in 2010. Although nearly one-fifth of respondents were optimistic enough to expect recovery this year, 17.3% claimed recovery would come in 2011, and a few indicated 2012.

Media spending levels may lag that recovery somewhat. One-half of responding marketers said they expected their expenditures to return to peak levels in 2011. Fewer than one-third thought 2010 would bring them back to their previous budgets.

About eMarketer

By gathering the latest research and news from over 1,000 sources, eMarketer has established itself as the world’s leading provider of internet and e-business statistics. eMarketer’s Web site is at