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Digital Gains Ground, Traditional Media Still in Game

Orange County advertising agencies are increasingly shifting from traditional media tools to digital channels that are getting a larger share of marketing budgets in the economic recovery.

Social media and e-newsletters were just emerging when Ashley Forman, cofounder of Rusty Bear Media in Costa Mesa, entered the business seven years ago. Her clients then focused their marketing efforts primarily on print and traditional channels.

“People were hesitant to try the new digital outlets,” said Forman, who manages advertising accounts for Irvine Company Apartment Communities, Lyon Homes, TechSpace and Pure Barre and others.

That’s changing.

“Today our clients want ad buys on magazine websites versus print, e-newsletters [instead of] direct mail,” Forman said. “A large portion of marketing dollars [is focused on] on strategic social media plans.”

Print ads and newsletters remain prominent in the mix.

“We always guide our clients that it is a mix of social and traditional that warrant the best results,” she said.

Digital Dollars

But marketing agencies will continue to see more dollars going to digital efforts, especially among larger clients, according to forecasts published last month by research and advisory company Gartner.

The Stamford, Conn.-based information technology research and advisory company surveyed U.S. companies with more than $500 million in annual revenue from six industries: financial services and insurance, high-tech, manufacturing, media, retail and healthcare. Gartner defines digital marketing as “the ability to interactively communicate with customers through electronic channels, such as the Web, email, smart devices such as phones and tablets, and mobile applications.”

Ingrid Otero-Smart, president, Casanova Pendrill

The results show that companies spent 10.4% of their 2012 revenue on overall marketing activities and that their marketing budgets will increase this year. Digital marketing represented a quarter of that spending last year and is expected to grow this year.

The majority of respondents said they’re spending between 10% and 50% of their marketing budgets on digital activities, with the average at 25%. About a third have cut their traditional advertising budgets to fund digital.

A similar scenario is playing out in Orange County.

“In the last five years, it has become one of the predominant buckets in which [marketers] put their money into,” said Ryan Abbare, president of Costa Mesa-based Pacific Communications, which focuses on healthcare advertising. “Before, sales reps would have a four-page sales (display) with them, but now they go out to a doctor’s office with an iPad loaded with resources they can access, such as videos or a website.”

Whatever Works

Clients in some cases are opting to go almost exclusively digital in their communication efforts.

DGWB Advertising & Communica-tions of Santa Ana centered its newest campaign for Yogurtland around a mobile application, Flavor Finder, which allows guests to find their favorite flavor at the nearest Yogurtland shop.

“It’s not so much a question of digital any longer but rather what will best allow us to build a targeted and deep relationship with our clients’ customers and what medium will be the most efficient and measurable to achieve this,” said John Ward, a digital strategist at DGWB, whose clients include KFC, Toshiba and Dole Fresh Fruit Co. “That is typically digital, with mobile a big part of that, as well.”

Every program or campaign Costa Mesa-based Casanova Pendrill presents to its clients and prospects has a digital and social component, said Ingrid Otero-Smart, the company’s president.

“We have seen an increase in interest in digital and somewhat of an increase in budgets, but traditional media for us is still significantly bigger.”

Casanova Pendrill’s digital revenue has been on the rise over the past couple of years, Otero-Smart said, although the publicly held company doesn’t reveal its revenue numbers. It clients include the U.S. Army, the California Lottery and Denny’s Corp.

Not every client is shifting money from traditional media to digital.

Chris Mellow, director of digital and engagement at Huntington Beach-based Grupo Gallegos, also is seeing marketers loosening their purse strings when it comes to nontraditional methods.

“More brands understand that with digital and social in your marketing ecosystem, it creates opportunities to leverage the overlap in paid, earned and owned media to drive results that can be quickly measured, analyzed and optimized,” Mellow said. “Sometimes the digital spending is budget that has moved from traditional channels, but more often we’re seeing growth driven from incremental spending, so overall budgets are going up.”

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