Marketers to experiment through this year: Razorfish

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Marketers will continue to experiment with digital channels throughout this year, according to the sixth annual Razorfish Outlook Report. The study also noted that Razorfish clients invested 45% of their media spend last year into vertical properties, such as search, ad networks and portals.

The report, released May 24, also found that out-of-home, ad exchanges and social media marketing saw large growth from clients last year. Razorfish expects these channels to grow through 2010, citing work from Mercedes Benz and Microsoft as examples.

Mercedes is integrating its iPhone mobile approach into its advertising strategy, while Microsoft is merging mobile into its business-to-business event marketing strategy. The report also found that 2009 client spending increased 4% year-over-year, versus a 13% drop in 2008.

“Despite the recession, there was no fear of experimentation,” said Jeremy Lockhorn, VP of emerging media at Razorfish. “The best way to get out of this recession is to innovate our way out.”

Lockhorn noted that marketers didn't innovate to save money, explaining that a fully integrated mobile campaign can be expensive. Instead, he attributed the spending increase to the benefits of using new media channels for consumer adoption.

The report also found that social media only accounts for 4% of the average client media spend. However, Lockhorn said social is a valuable and growing channel and attributed this low percentage to the fact that marketers aren't measuring it accurately.

“Social media should not just be measured in the media spend for banner ads on Facebook,” he said. “Brands are spending a lot on social media content creation and social media strategy, but not including this in their social media budget. This labor costs a lot more than the media buy.”

Marketers were also more likely to switch to brand-focused digital marketing, rather than direct response-focused digital marketing last year, according to the report.

Meanwhile, Google still leads the search category, but Razorfish expects the combination of Microsoft Bing and Yahoo to challenge its position.

Razorfish also expects mobile and social media marketing to become a key part of clients' media budgets. The company also expects to see growth in less publicized channels this year, including ad verification systems, local online advertising, in-game advertising and digital out-of-home.

“Location based advertising is being driven by the growth of the smartphone and all of the attention to location networks like FourSquare and Gowalla,” said Lockhorn. “There is a lot of potential for growth in these areas.”

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