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  • Chet Dalzell's picture

    Mobile marketing to “explode” in 2012

    2012 January 12th Luncheon coverage by Melissa Hoffman at DM News:
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    Melissa Hoffmann | January 12 2012 Mobile marketing and mobile-related ad spending will grow significantly this year, predicted Bruce Biegel, managing director of the Winterberry Group, a marketing consulting company, during a presentation to the Direct Marketing Club of New York (DMCNY) on Jan. 12.

    “This is the year mobile explodes,” he said, noting that U.S. adults spent 30% more time interacting with their mobile devices at the end of 2011 than they did at the beginning of the year.

    U.S. mobile advertising spending increased 41.2% to $1.2 billion in 2011, compared with 2010, according to the Winterberry report. Digital overall increased 19.8% to $34.6 billion in the same time period. Email increased 18.1% to $1.6 billion year-over-year.

    Biegel also noted direct mail advertising spending increased 2% year-over-year to $45.8 billion. However, Biegel said that in 2012 “money will continue shifting out of traditional channels and into emerging or evolving channels.”

    Biegel said that direct mail is still valuable to marketers even while the volume of first-class mail continues to decline. “Mail's not dead,” he said. “Mail is mature.”

    Biegel estimated that in 2012, traditional direct mail will still see a modest increase of 2.5% and predicted increases of 17.4% in digital and 12.5% in email marketing spend.

    Total U.S. direct and digital ad spending totaled $215.9 billion in 2011, according to the Winterberry report. Insert media spending increased 12.5% to $0.9 billion in 2011, compared with 2010. Direct-response broadcast spending increased 7.6% to $25.4 billion year-over-year, while direct-response print increased 2% to $15.3 billion and teleservices spending increased 1.5% to $40.1 billion.

    Mobile in 2012, he predicted, will increase by a whopping 50.2% to $1.8 billion. Biegel explained mobile marketing has grown in value with the prevalence of smartphones, geolocation and increasingly tech-savvy consumers. He noted that consumer behavior is changing and marketers must adapt.

    Tied to this evolution is a need for legacy data management platforms to support vast new streams of information from mobile and digital channels, including consumer behavior data, opt-in information, web analytics, contact and demographics information, transactional and loyalty records and public records, he said.

    Much of the deluge of data now available to marketers through various streams is tossed away, as marketers don't know how to use it, and storing the information is difficult, Biegel said.

    These evolving marketing operations will significantly alter the advertising ecosystem, resulting in industry consolidation, particularly among agencies. "What's direct, what's digital will start to fade away," Biegel said.

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  • Chet Dalzell's picture

    Direct and digital outlook for 2012 cautiously optimistic

    2012 January 12th Luncheon coverage by Christopher Hosford at B2B Magazine:
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    Christopher Hosford | The new year isn't quite a month old and the prognostics for direct and digital marketing health are looking up. Search and display expenditures are rising, direct mail continues its modest rebound and hiring plans are cautiously strengthening.

    "Last year, things actually were pretty good for five or six months and then it got quiet during the summer because of a bad macro environment," said Bruce Biegel, managing director at marketing consultancy Winterberry Group. He added that the economic crisis in the European Union, fear of a double-dip recession and debt-ceiling wranglings in Washington contributed to marketing uncertainties.

    "Then, in the fourth quarter, things came back and the year wound up growing overall," Biegel said.

    At a presentation before the Direct Marketing Club of New York this month, Biegel presented Winterberry Group analysis showing that digital channels continue to increase their share of marketing spend; that direct mail experienced 2% growth in 2011 and will grow by the same amount this year; and that marketing spend on social, search and mobile will increase significantly this year as well.

    Meanwhile, companies are ushering in the new year with a surge in direct and digital marketing hiring plans. According to the latest survey of hiring decision-makers by direct marketing executive search company Bernhart Associates, 52% of companies said they plan to add to staff this quarter, up from the 40% reported in the fourth quarter of 2011. Also, the percentage of companies planning layoffs dropped to 6%, compared with 8% in the final three months of 2011.

    Bernhart's "Quarterly Digital and Direct Marketing Employment Report," conducted in January, had 446 respondents.

    "Many marketers didn't have a bad year in 2011, and I'm starting to see direct and digital marketing candidates getting multiple offers," said Jerry Bernhart, principal at Bernhart Associates. "People kind of know things are getting better, and this corroborates it." Bernhart said the bulk of hiring is taking place at agencies, with requests for analytics expertise in particular.

    "They want people who can crunch numbers, analyze campaign results and make recommendations," he said. Bernhart said social and content marketing expertise also is in high demand.

    Even as fourth quarter pay-per-click expenditures increased 22% overall from the same period a year earlier, mobile search expenditures exploded by 269% in the same period year over year, according to a report this month from ad management technology company IgnitionOne.

    In addition, online ad management company Marin Software reported that mobile and tablet users accounted for 10% of all U.S. search ad clicks during the fourth quarter, with ads served to tablet devices providing higher engagement than on desktop computers, with a 37% higher click-through rate.

    "Marketers know they have to be in mobile," Biegel said. But he cautioned that to date, mobile is still ruled by e-commerce, not marketing, and that marketing challenges remain in finding the right message to the right people on the right device.

    "Marketers need new sets of tools and data to understand better how to use search and email across mobile devices to get relevant results," he said. "The big theme is attribution."

    While things look promising for the balance of the year, caution still remains.

    In the Bernhart study, 19% still anticipate a hiring freeze in the first quarter, down only slightly from 20% in the fall 2011 quarter. And Biegel noted that the traditional media world of direct mail, print and list brokerage, among other sectors, face numerous challenges.

    "Marketing data is still in silos," he said. "Marketers need to connect data, partners and suppliers, and do it cross-channel. This requires a cultural change. Buying new technology is easy, but the supply chain is dying for everyone to integrate."

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  • Chet Dalzell's picture

    Volume, Storage Top Database Concerns in 2012: Winterberry Group

    2012 January 12th Luncheon coverage by Richard H. Levey at Chief Marketer:
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    Richard H. Levey | The outlook for direct and digital marketing as a whole is optimistic: Winterberry Group managing director Bruce Biegel foresees a 5.1% uptick in spending, to $215.8 billion, in 2012. But that increase will in part be spurred by marketers' confronting "big data" issues – the amount of data being collected, and the speed at which it is being accumulated, may overwhelm their ability to analyze and use it.

    Credit the Internet with the jump in data quantity: Marketers are asking legacy systems to store an ever-widening expanse of behavioral data, such as clickstream activity, intent data (opt-ins, registrations and referrals), and Web analytic information. And that's on top of the information these systems were initially intended to house, such as customer contact information and demographics, prospect information, transaction and loyalty program data, public records and other information.

    "Too much data is coming too fast," says Biegel, who recently spoke to the Direct Marketing Club of New York on data trends. "Data storage is expensive, and what needs to be stored is a big question. [Marketers] haven't sorted out the use question."

    During 2011, the need for data management presented both opportunities and challenges, depending on which segment of the marketing community an organization fell in. Suppliers saw an increasingly robust demand for their offerings as marketers boosted their spending on data, analytics and digital interaction. Suppliers saw further benefits from marketers holding off on new internal hires, preferring to rely on third-party outsourcing. And the year saw a new round of private equity and venture investment in emerging data-driven marketing platforms.

    During the same period, marketers saw stability in their budgets, which resulted in data-driven testing and acquisition activities. The marketing community also saw the quests for purchase attribution (beyond the final marketing touch which spurred a sale) and cross-channel integration gain increasing prominence. And while economic uncertainty (especially in mid-year) resulted in new investments being inhibited, these concerns abated by the end of the year, according to Biegel.

    If nothing else, the sheer volume of data being generated is cause for rejoicing among suppliers, and consternation among marketers. In 2010, global data storage was estimated around 1.2 zettabytes (one zettabyte equals 1 billion terabytes). By 2020, storage levels will pass 30 zettabytes, according to Winterberry.

    But there's a big difference between having a massive amount of data and using it. As Biegel notes, marketers' abilities to perform cross-channel targeting, which involve integrating online and offline data, are still in their infancy. And what he calls "the rules of the road" for cross-channel targeting have yet to be written, especially when it comes to merging known names and addresses and anonymous IP addresses; reconciling batch processing and real-time deployment, and moving from campaign-driven mentalities to continuous, one-off targeting.

    Biegel also anticipates that during 2012 data governance will resurface as priority for marketers. This impulse will be driven by the increase in volume and complexity of cross-platform data, and rights management, privacy and security will increasingly dictate how marketers capture, parse and redeploy information for both online and offline marketing.

    Governance concerns aren't the only ones data-focused marketers will face this year: A Winterberry survey asked marketers about the issues potentially inhibiting investment in data-based marketing activities. A shortage of data-savvy marketing talent topped the list, followed by the problem of siloed collection and management of data within an organization. Poor insight among sales teams or media buyers regarding the relative value of data, insufficient data strategies and the fragmented nature of third party data sources and solutions rounded out the top five concerns.

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  • Photos 2011 Silver Apples Award Gala

    The Silver Apple Awards were designed to honor our industry's most distinguished achievers. Direct Marketers who have not only made strides within their areas of expertise, but who have also generously contributed their time and talents to the industry for 25 years or more. These recipients reflect the best that our profession has to offer our clients, our corporations and our profession. Their careers represent the globalization of our business and every sector of it - from academia to the consumer market to the business-to-business arena. They are entrepreneurs and corporate leaders, innovators in the world of e-commerce as well as in traditional media. Full Screen

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