Data-Driven Marketing Is Ready to Rev Into High Gear

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No fiscal cliff, full speed ahead!
No fiscal cliff, full speed ahead!

Is data-driven marketing about to add a Hemi engine and a supercharger? It appears that way, as companies that avoided driving off the fiscal cliff in 2012 begin to fuel data-charged efforts in accelerated fashion in 2013. Nearly two-fifths (38.7%) of marketers and suppliers responding to the Direct Marketing Association's (DMA) Quarterly Business Review survey say they spent more on data-driven marketing (DDM) in Q1 2013 than they did in Q4 2012, while 42% held spending at the same level. More than 70% agreed that data-driven marketing is poised for growth.

“When you compare the sentiments of this group coming out of the back half of 2012--facing the fiscal cliff and sequestration-- with their optimism for 2013, people are absolutely bullish about the opportunities,” says Jonathon Margulies, managing director of Winterberry Group, which conducts the quarter reviews for the DMA.

Especially surprising was a jump in the DDM Index from 3.1 at the end of 2012 to 3.31 during this year's first quarter. The index is derived by asking respondents to rate their interest in pursuing technology solutions on a scale of 1 to 5.

“It's a slightly unusual circumstance, because we usually see a tempering of pace in the first quarter coming out of very busy fourth quarter,” Margulies says. “They were holding back in 2012 because of a sense of uncertainty, but in the first quarter they were telling us that conditions had improved for investment and staffing plans.”

“We're seeing a renewed optimism in the data-driven marketing community,” said DMA CEO Linda Woolley in a press release, attributing the buoyed spirits to “accelerated data-driven spending growth and by an increased growth rate in staffing—the first we've seen since Q4 2010.” The Staffing Growth Rate Index ticked up to 3.16 from 3.01 in the previous quarter.

Marketers' data and technology shopping lists grew during the time they were sitting on their cash reserves. “Respondents to the survey told us that their growing interest in data-driven marketing efforts is spurred on by the availability of solutions,” say Susan Taplinger, DMA's senior director of communications.

Much of the increased interest and investment is coming from verticals that, to date, have not been fully engaged in data-driven methods, Margulies says. “Some verticals—credit cards, insurance, financial services—have data at the very core of their marketing strategies and have for years. For others, however, leveraging digital insights across all media channels is at its earliest stages. They are now attempting to build strategies that deliver results at scale.”

They have been freed to do so not just by an improved economic outlook, but by a realization in C-suites that data-fueled marketing and customer initiatives are crucial to driving growth, according to the study organizers. “We're seeing the mandate going out from senior managements to build Big Data strategies for their companies, and marketers are going to be at the center of that movement,” Margulies says. “They are being recognized as the emergent group with respect to digital information. Marketing is going to be the source of intelligence in the organization, the group that owns the customers.”

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