Marketing channels, such as Word of Mouth Marketing and Online Marketing, are expected to grow to an astounding 27% of overall marketing expenditures by 2012, up from 7% in 2002, according to a new research study recently released by IBM Institute for Business Value titled “Beyond Advertising: Choosing a Strategic Path to the Digital Consumer”.

The findings prove the changed landscape of the advertising marketplace and the necessity for companies to adapt in order to compete. The report reveals that companies are shifting spending away from traditional advertising in favor of more interactive and measurable ways of reaching consumers.

The study cites the four major trends that are emerging:

• Influence of the Digital Savvy Consumer – Today’s consumer is more more digitally savvy and wants to be engaged online. This year, 76 percent indicated they had already watched video on their computers (up 27 percent). Thirty-two percent indicated they had viewed video on a portable device or mobile phone (up 45 percent). And interest in mobile video content has more than doubled in a year, to 55 percent.
• A shift in advertiser spending – Advertisers are responding to this new breed of digital savvy consumer. Results show that Sixty-three percent of global CMO’s expect to increase online/interactive marketing spends while 65 percent expect to decrease traditional advertising.
• Digital migration of platforms – The emergence of digital forums such as social media and online video are blurring the lines between advertising and marketing in a move to what the study calls “brands-actional” advertising.
• Emergence of new capabilities –“Moves, by both new entrants and existing players, are driving new types of industry innovation, and accelerating the pace of change.”

“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,” says Saul Berman, IBM Global Leader for Strategy and Change Consulting Services and co-author of the study.