Ad Spending Will ‘Be the Highest Ever’ in 2015, Says Biegel
A room in Manhattan contended with Disney to be the happiest place on Earth on Thursday, when members of the Direct Marketing Club of New York heard 2015 would bring high ad spending.
"As a matter of fact, it will be the highest ever," says Bruce A. Biegel, senior managing director of the Winterberry Group, speaking during the Jan. 8 luncheon at the Yale Club of New York City.
The U.S. will see $156.8 billion in what Biegel calls "direct and digital" spending, with the specific channel of direct mail getting the largest slice of the pie at $45.7 billion. As money shifts away from newspaper advertisements to digital marketing, new money fill follow, he predicts. Digital ads will grow 16.3 percent this year to $64.2 billion, with mobile and social media marketing contributing the most. Biegel clarifies that in his study, mobile email, social and search are not dumped in the mobile bucket—the other three channels get that credit.
According to Biegel's "2015 Annual Outlook: What to Expect in Direct and Digital Marketing," marketers will see:
- Direct Mail Volume Will Hold Steady. He even expects spend to go up 1 percent, driven by volume because there hasn't been a postage increase. In 2014, envelopes and paper came back and direct mailers used innovative technologies to cross channels. "Where we're losing direct mail is in retention," Biegel says. Once companies have the customers, they keep in touch with them via a cheaper channel—email, he says. (Email marketing is expected to grow by 9.7 percent and gain $2.3 billion ad dollars.) Retention efforts in email will further lower First Class mail volumes, he says.
- Display Ads Will Outsell Search Ads. Up 21.1 percent to $28.3 billion, display ads target desktop and mobile users. Companies will want ads for customer acquisition and retargeting, with some programmatic purchases thrown in, he says.
- Search Engine Marketing Growth Will Slow. Companies will spend $26.9 billion on search, an increase of 11.1 percent. "There's only so many hours that we have to search for stuff," Biegel says. Search engine marketing requires consumers to visit a search engine, while display ads can find them, he says.
- A Specific Segment of Social Media Marketing may "explode this year," Biegel says. SMM using customer relationship management data is making the channel very relevant to marketers, he says. Social technology and services, excluding social display and social search spend, will rise 31.5 percent in 2015 to reach $3.9 billion. "The big social networks, they know who you are and they know what you did," Biegel says. The channel in general, though, still has a few kinks to work out. "Social commerce is something we're starting to really watch," Biegel says.
- Not Much Change for Traditional Media. "It's a 'little bit' market for the traditional media," he says. "Measured Media" Spending will total $126.3 billion in 2015, with TV earning $70.6 billion and seeing a 3.1 percent rise; outdoor $7.4 billion, increasing 2.5 percent; radio $16.2 billion, growing 1.9 percent; cinema $0.7, up 1 percent; magazines $15 billion, down 1.1; and newspapers $16.4 billion, slumping 2.8 percent.
Back in the "direct and digital" category, teleservices are slated to bring in $42.6 billion and climb 2.7 percent; insert media $0.8 billion, up 1 percent; and, of course, direct mail at $45.7 billion, rising 1 percent.