By any nomenclature, direct marketing spend is outpacing that of brand marketing. But that appears to represent a percentage shift toward direct rather than a complete turn away from brand.
“Powered by online media, direct marketing grew from 47.9 percent in 2006 to 52.1 percent in 2011,” says Yoram Wurmser, PhD, marketing consultant and former head of the research department at the Direct Marketing Association (DMA). “As online pay per action models continue to develop and attribution becomes more sophisticated, direct’s share should continue to grow.”
Winterberry Group called the beginning of the trend in January 2006 research that showed a steady shift in marketing spend away from brand and toward direct: “From 2003 through 2007, [above-the-line] advertising is expected to grow by an average of 5.5 percent per year, with [below-the-line] spending growing at 7.8 percent annually.” The report cites media fragmentation as pushing the increased need for measurable results.
As their budgets shifted, companies weathering the Great Recession heard about a new twist in February 2009 from Forrester’s “How Direct Marketers Can Weather The Economic Storm”: “Direct marketers will increase their focus on online communication, as well as on marketing and customer analytics.”
David Norton, Target Marketing magazine’s 2010 Direct Marketer of the Year, represents a leader who made a bold move to shift budget at Harrah’s Entertainment to being “an almost pure-play direct marketing entity during the recession.” In April 2009, the business now named Caesars Entertainment centralized marketing analysis to improve its direct marketing efforts and saved the company $15 million to $20 million that year.
As time went on, this trend pushed direct into being the current No. 1 marketing process:
- “In 2011, direct marketing advertising expenditures as a portion of total advertising expenditures in the United States stood at over 52 percent, and they produced 8.7 percent of US GDP.”—“The Power of Direct Marketing, 2011-2012 Edition”
- While DMA expected direct to lead the way with a 5.6 percent jump in 2011 and 3.4 percent in 2012, “general advertising” would also grow at 2.5 percent in 2011 and 0.9 percent in 2012.—Power of Direct and the “DMA 2012 Statistical Fact Book”
- “Spending on targeted media will increase 7.7 percent to $215.81 billion in 2012.” —“Veronis Suhler Stevenson Forecast 2012-2016”
- “Traditional consumer advertising spending will post a 2 percent gain in 2012 to $146.57 billion.” —Veronis Suhler Stevenson Forecast
- “For the next five years, direct marketing will continue to account for over 50 percent of total advertising expenditures. Direct marketing’s share of total advertising will rise from 52.1 percent in 2011 to 55.5 percent in 2016,” —Power of Direct
So now, just about any industry primarily restricting itself to traditional, non-measurable marketing appears to be decrying digital, because the unmeasured mass marketing advertising dollars are drying up. “Online, businesses increasingly expect even brand advertising will have measurable results, and measurable ad spending disrupts the high margins of the good years,” reads “Post Industrial Journalism: Adapting to the Present.”