In October 2005, Alterian conducted its third annual Trans-Atlantic survey. This year the research considers the attitudes of nearly 700 marketers and marketing services providers in both North America (N.A.) and the United Kingdom (UK).
The survey revealed that optimism within the industry remains high for a second year running but there are still major operational challenges to be tackled, including legislative issues, technical awareness and ownership of technology assisted processes.
This paper summarizes the responses gathered from those questioned and provides some insight into what these results mean to the direct marketing industry. Please note that the information presented represents the opinion of the audience surveyed.
Survey Methodology
- Survey was conducted via the internet with an electrical submission form, manually via hardcopy submission form and in-person at the Direct Marketing Association Conference and Exhibition in Atlanta, Georgia in October 2005
- Survey respondents totaled 687 marketing professionals
- The response group is comprised of 395 in-house marketers from cross vertical organizations including: retail, leisure, telecommunications and financial services. 292 marketing services providers also completed the survey, including above and below the line agencies, direct marketing organizations, database management companies and consultancies.
1. On average, how much does your organization or typical client spend annually on direct marketing (excluding printing and postage)?
The first area of the survey looks at how much budget the respondents currently allocate to direct marketing expenditure. Almost half of all respondents (47%) spend $1 million or above. The largest segment of respondents (almost a third) indicated that their expenditure fell into the highest budget category (more than $5 million).
This data also indicates that 35% of the survey respondents are spending between $100,000 and $1 million on direct marketing. From these statistics we are able to deduce that almost a third of the opinion represented within the survey results is that of the 'mid-market' marketer.
2. How do you expect your direct marketing expenditures (excluding printing and postage) or that of your typical client to change over the next 12 months?
The second question, also considered in the Alterian 2004 Annual Survey, generally reflects the survey responses from last year. This indicates an accelerating trend in direct marketing expenditures, as 63% of respondents believe that their, or their client's, DM expenditure will increase in the next 12 months. Only 5% believed that it would decrease. These results respectively mirror that of last year's survey. Confidence in N.A. was higher than the UK this year, with 70% expecting an increase compared with 53%.
3. Which of the below currently presents you or your clients with a direct marketing related headache? (Multiple answers could be chosen by each respondent)
This question examined where current issues and frustrations lie within the direct marketing process. When asked which areas present respondents with a 'DM related headache', Customer Insight and Analysis is the most popular answer with 52%. This is particularly interesting given that 55% of the respondents also consider technology's highest value contribution to the direct marketing process is the ability to analyze, visualize and segment customer data (see Question 7 results). The second most popular response is 'Data Hygiene' with 46% overall.
These findings clearly show that there is still a sentiment of frustration surrounding customer insight and data analysis. To identify the reasons behind this issue we referred to the Forrester Research 2005 Database Marketing Benchmark Online Study:
"When asked what keeps them from improving ROI, 53% of panel members cite lack of sufficient staff to manage the workload. In line with this, a third say they don't have the necessary resources to more aggressively pursue analytical marketing strategies and tactics."
Database Marketing's Influence: Still Growing, Elana Anderson and Justin Bruton, May 10, 2005
If most marketing departments lack the resources to manage their workload and are attempting to perform these tasks on their own, a fact that is supported by the relatively small percentage of marketing departments who leverage outside support for technology solutions (see Question 6 results), we feel that this outlines a tremendous opportunity for Marketing Services Providers.
