Marketers who spend more on interactive marketing can increase their resulting revenue, said the Interactive Advertising Bureau and MarketShare Partners, an analytics and technology firm, in a report released August 2.
The report also emphasized that using a diverse mix of traditional and interactive tactics is critical for marketers. The companies used Compass, a predictive model that examines the historical data of sales and advertising expenditures, and brand and customer information, for the report.
The IAB and MarketShare also said marketers should spend between 1.6 times and 2.2 times more than their current budgets on interactive advertising.
Ivan Markman, COO and CFO of MarketShare, said interactive advertising is essential to marketing, but finding the right balance among elements is key for marketers.
“Interactive marketing influences the effectiveness of other media,” he said.
The study examined three brand scenarios in the consumer packaged goods, financial services and automotive categories. The companies said CPG companies could spend less money on TV, print and radio advertising and direct marketing and more on online display, paid search and out of home. Marketers can decrease their spending but still reach their revenue targets, according to the IAB and MarketShare.
The report said the “optimal re-allocation results in a target 6% increase in revenue, a 13% decrease in marketing spend and a 12% increase in profit. Big increases in online search and display advertising are key to achieving this optimal result.”
“Even a small re-allocation of media spend can impact a marketer’s revenue significantly,” noted Sherrill Mane, SVP of industry services at the IAB. “The research shows the value of digital marketing.”