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Cover Story : Media Usage Forecast 2014

Direct mail remains strong, but have we crossed the digital Rubicon?

March 2014 By Thorin McGee
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More marketers are spending more money (and time) with email, social media and paid/organic search marketing than ever before, according to the responses to our "2014 Media Usage Survey." As one B-to-C respondent sees it, there is "potential for more cost-effective growth online than in the mail."

On the other hand, there's a countermove of companies who see a rising tide of what one B-to-B respondent calls "too much noise in the digital world," and they're pushing back with more direct mail and telemarketing spending.

Which channels are they using? Which do they say have the best ROI? What factors have influenced changes in their direct marketing programs from 2013 to 2014? Read on to find out.

Who Has Money to Market?
Turns out, many marketers do. As you can see in Chart 1
, just about a third of respondents are increasing budgets in 2014, and large pluralities in each segment are holding budgets steady. That's more increasing budgets and fewer flat ones than were reported in 2013. For the most part, fewer respondents in B-to-B and "Both" reported decreasing budgets. ("Both" companies market to B-to-B and B-to-C customers.) The outlook isn't as rosy in B-to-C, where 20 percent project decreases in 2014—that's significantly higher than the 14 percent last year.

Chart 1 2014
[+] click to enlarge

One interesting trend not shown in these charts is more marketers report they are increasing acquisition budgets than retention budgets.

In the survey, we ask the question in Chart 1 two more times, specifically for retention and acquisition budgets. B-to-B marketers foresee a 45 percent rise in acquisition budgets, but only 30 percent are increasing retention. It's similar for B-to-C (42 percent vs. 34 percent) and Both (40 percent vs. 33 percent). A couple years ago, marketers were playing defense and increasing retention spending. This year, they appear to be back on the hunt to increase market share.

While most responders appear back to non-recession spending, tight budgets still hamper some. For example, one B-to-C respondent says a "reduced integrated advertising budget pushes our shift from print to online advertising. This also increases the advertising ROI."

As mentioned earlier, there is a continuing rise in email, social and search marketing. And one thing all of these media have in common is they don't have obvious hard costs. They all certainly have a price, and most of them cost a good deal more than they appear to—especially if you're looking to create a bunch of high-quality content to make your site "go viral" on social media and show up high on search engine results. But in all of those channels, the emphasis of the strategy is on enthusiasm, interaction and effort, not budget spent.

Factbox #1

Tell Us What You Think

Do the survey results surprise you? Do they match what you’re seeing in your business? If you post a video, blog or article commenting on the “2014 Media Usage Forecast,” email the link to Thorin McGee at tmcgee@napco.com, and it could be shared in an upcoming edition of the Today @ Target Marketing e-newsletter: bit.ly/ttmenews.

 

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