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Direct Marketing, Branding Converge Online: IBM

Direct marketing and brand advertising are beginning to converge online, according to a report from IBM Global Business Services.

Digital formats, including social media, online video and gaming, allow companies to meet both return-on-investment transactional  objectives and brand-building objectives. The report calls this “brands-actional” advertising.

As branding and direct continue to merge online, alternative marketing channels such as online advertising and word-of-mouth marketing will expand to 27% of overall marketing expenditures by 2012 - up from just 7% in 2002, according to the Beyond Advertising: Choosing a Strategic Path to the Digital Consumer report. Traditional ad formats will fall from their current 47% share to 32%, writes BtoB.

As these shifts continue to take place, media companies and content suppliers must change the way they   deliver information, adopting the next generation of digital formats.“To succeed - especially in the current economic environment -  media companies will need to develop a new set of capabilities to   support the industry’s evolving demands which include micro   targeting, real-time ROI measurement and cross-platform integration,” Saul Berman, IBM global leader for strategy and change consulting services and co-author of the new study says. “Now is the time   for companies to move quickly to become more effective with their   assets and build for the future.”

According to the study, today’s suppliers (agencies, content networks and distributors) are not ready to meet the demands of the digital consumer and advertiser. Eighty percent of advertising industry participants interviewed for the study expect the industry to be at least five years away from being able to deliver true cross-platform advertising (including sales, delivery, measurement and analysis).

The study emphasizes that advertisers must deliver consumer-centric marketing—which involves combining more granular targeting and measurement with cross-platform integration—in order to be successful and meet the growing digital demands of consumers. Granularity is the basis for ROI driven advertising—which implies the ability to micro-target and interact with desired consumers while measuring response and impact. Integration enables the delivery of messaging to consumers in compelling, innovative ways across platforms, and tightly coupled with the emotionality, sensitivity, pace and genre of the content within which it is placed.