Marketing Expenditures Will Double This Year

Direct, targeted marketing expenditures will more than double that of traditional mass marketing in 2006, reaching roughly $508 billion compared to $230 billion, according to the Winterberry Group. "Tracking the Trends: A Comparison of Above-the-Line and Below-the Line Expenditure Trends" also predicts that above-the-line (ATL) advertising, which includes channels like newspapers and television, is expected to grow by an average of 5.5 percent per year in 2006 and 2007, compared to 7.8 percent annual growth for below-the-line (BTL) spending on direct mail, events, Internet campaigns, and promotions. "Significant evidence suggests that the marketing landscape has shifted from an above-the-line focus on reaching a broad population with emotionally-oriented appeals, to a below-the line approach that stresses targeted, customer-centric communications, measurable results, and a concrete return on investment," the report states. Besides being targeted to mass audiences, ATL media attempts to establish brand identity and are difficult to measure with accuracy, according to the report. BTL media is tailored to individual consumers based on their expressed needs and preferences; inspire specific activity or deliver tailored messages about a product or brand; and are highly measurable, allowing marketers to evaluate which campaigns are bringing the best ROI. "Broadcast television just isn't doing well. For marketers looking to establish relationships and cut through the clutter, you need a much more targeted medium," says Bruce Biegel, managing director of the Winterberry Group. "Sophisticated consumers like TiVo users who tune out commercial advertisements in a move to do away with the clutter now pose the most significant threat to traditional advertising and other ATL methods," the report states. It also is extremely important to keep in mind consumers' demand for multichannel communication, and to not forget about traditional methods. While search engine-marketing spending is expected to double to roughly $11 billion by 2010, direct marketing expenditures are predicted to grow by $3 billion to $4 billion within the year. And although Internet advertising will continue to grow to 7 percent of total advertising, it is only one channel among many. "Marketers are having the most success when they focus on integrating their multiple channel marketing efforts and [when] they touch customers from both a timing perspective and a consistent message," Biegel says. "Evaluate your marketing operations and identify where the gaps are. Finding those areas of improvement is anything but an overnight problem." Biegel suggests selecting diverse creative expertise while maintaining a focus on a common strategy and finding suppliers who will support execution across multiple media. Just a few years ago, marketers were using six or seven channels; today they are using up to 20, which can be difficult to manage. Looking for an integrated supplier and including more marketing automation tools to help manage those efforts can help. "We see CRM systems as data collectors on one side and SFA serving sales processes. Marketing automation is still very underpenetrated," Biegel says. "For those who have made the commitment to CRM and SFA, this is the bridge between the two and a commitment to managing your spending. Building the bridge will be the story for '06, '07 and '08." Related articles: The Email Marketing Transition The Art and Science Equilibrium ROI increases as organizations' marketing initiatives fall in line with strategic corporate goals; four core marketing competencies help. Faster, Better Keyword Marketing Management