Editor's Notes: Mixed Blessings
How a year can change things. Thirty-eight percent of respondents to Target Marketing’s 2008 Media Usage Forecast boasted of an increase in their direct response media budgets, and only 16 percent anticipated a decrease. With the numbers now in for our third annual forecast, I’m sorry to report the economy has flipped those percentages on their heads. But the silver lining in this study is that the share of direct marketers whose budgets are remaining steady for the third year in a row has slipped only one point, to 40 percent. Another metric holding firm is the percentage of marketers who aren’t sure about what trajectory their budgets will follow this year. Perhaps this heralds a new evolution of direct marketer, one who plays things a little closer to the ROI vest? With the rise of media that enable on-the-fly campaign deployment and fine-tuning, smart firms have found they’re able to ratchet up activity when the ROI is there and apply the brakes when performance slows.
As we saw with last year’s forecast data, marketers are trending toward media diversification. And it should be no surprise that e-mail is coming out on top, both for customer acquisition and retention. When your marketing budget’s smaller, e-mail’s the obvious choice. But be careful about making obvious choices versus sound decisions.
“If you’re not thinking about how your business works in various channels,” says direct and database marketing consultant Alan Weber, you will not identify challenges until they’re already affecting your results. You have to be careful both in how you allocate media spend and integrate new media into your operations.
For example, he offers, “as more orders come in on the Web site versus the telephone, marketers see their average order value dropping. That’s because it’s harder for them to present and close upsell and cross-sell offers online as effectively as they can via a live salesperson on the phone.” Companies have to anticipate any such outcomes and develop plans that address potential shortfalls—and take advantage of windfalls.