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Digital Body Language and Economic Health [Chart]

think we can all agree that it has been quite a roller coaster ride since 2008.  The one thing I am happy about, is that it seems that when times are tough marketers turn to technologies like marketing automation to help them “do more with less” to maximize the effectiveness of their marketing efforts.

One thing I have always wondered is if tracking the online activity (digital body language or DBL) of potential buyers is a good indicator of macro-economic trends. Intuitively, buyers increasing or decreasing their online activity could be a good indication of whether companies are increasing or decreasing their sales.

Our customers have been using our Software-as-a-Service (SaaS) through all the economic peaks and valleys for over a decade and we have gathered this wealth of marketing data into our Revenue Benchmark Index.  We decided to look at the aggregate website activity of companies over 1 billion in revenue over the past 4 years, and see how it compares.digital-body-language

It was surprising how closely the activity mirrored the S&P 500 – even though many of the companies we analyzed were not in the S&P 500.  In particular the gap between Q4 2008 to Q3 2009 was intriguing.  After kicking it around our office a few times we came up with a few hypotheses:

A. Buyers kept on investigating new products and services, despite the downturn, with the idea that they will start buying once they were sure the economy was recovering;

B. Market sentiment was much worse than the actual downturn itself (thus affecting DBL which follows actual activity less than the S&P 500 which follows market capitalization).

Either way – this seems to indicate that digital body language was a good, if not better indicator of where the economic outlook stood for these companies, since the economy did recover faster than many expected by the end of 2009.

One thing that is concerning however, is that it appears in 2011 we are still on the way down once again, let's hope not for too long.

I guess at the end of the day, I am not suggesting Eloqua, Omniture or Webtrends become the new Standard & Poors – but it is at least an interesting discussion – what do you think?

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