Mail, Web Spend Projected to Rise in 4 Top Markets

Share this article:
As marketing budgets increase slightly in four of five global markets in 2003, companies plan to shift more resources to direct mail and online marketing, according to a study released yesterday.


The most pronounced shifts to interactive marketing and direct mail are in the United States and United Kingdom. Moreover, they "appear to be permanent," said the study, produced by the London Business School for French marketing agency Havas SA.


Direct mail is expected to account for 13.3 percent of marketers' budgets in 2003 compared with 12.8 percent in 2001. Interactive is to account for 7 percent in 2003, up from 6.1 percent in 2001, the study said.


The study involved 727 companies (1,475 were contacted) in the United States, Japan, Germany, United Kingdom and France, which account for almost two-thirds of the world market for marketing and communications.


"Media advertising" still commands the lion's share of marketers' budgets with a projected 44.4 percent share in 2003. But this is down slightly from 45.4 percent in 2001.


Sales promotion is another budget loser, forecast to be 19.4 percent of marketing spending in 2003 compared with 19.8 percent in 2001.


Companies quoted in the study cited the ability to target and accountability as reasons for the shift in resources to direct mail and interactive. General advertising is "not working as well as direct marketing. We have sophisticated measuring tools and know it is not working," said a UK consumer durables marketer, according to Havas.


The UK scored particularly high in direct mail with respondents saying that 17.2 percent of their budgets would be allocated to it in 2003. Also, UK marketers forecast a 21 percent boost in direct mail spending in 2003 compared with 2001, and a 6.8 percent boost in 2003 from 2002, Havas said.


U.S. marketers indicated that 14.6 percent of their budgets would be spent on direct mail in 2003. They also forecast a 9.9 percent rise in direct mail spending in 2003 versus 2001, and a 4.9 percent rise in 2003 over 2002.


"It's more cost-effective and targeted compared to traditional marketing," said a U.S. travel marketer, according to Havas.


Japan came in on the low end of the direct mail spectrum, with respondents indicating that 7.9 percent of their budgets would be spent there in 2003. Japanese marketers predicted a 4.8 percent drop in direct mail spending in 2003 versus 2001, and a 2.5 percent drop in 2003 versus 2002.


Fifty-five percent of respondents overall said their direct mail is outsourced.


Of the five countries, Japan is the only one whose marketers' overall budgets are expected to decline in 2003 compared with 2002. Marketing spending overall in the U.S., UK, France and Germany is to rise 4.4 percent, 5.3 percent, 5.1 percent and 1.3 percent, respectively, in 2003 versus 2002, while spending in Japan is to drop 1.5 percent.


Interactive marketing, defined as Internet advertising, Web sites, extranets, e-mail marketing, iDTV and wireless, "is the main growth area within the marketing expenditure mix," the study said. This is driven largely by sustained growth in the United States and United Kingdom and, to a lesser extent, by strong growth projected in France this year.


U.S. marketers forecast a 25.3 percent rise in interactive spending in 2003 over 2001, and a 12.7 percent rise in 2003 from 2002. UK marketers forecast a 47.5 percent increase in interactive spending in 2003 over 2001, and a 23.3 percent increase in 2003 over 2002. Marketers in France projected an 11.6 percent boost in 2003 over 2001, and a 14.2 percent boost in 2003 over 2002.


"Increasingly, the focus is on customer retention and relationship marketing, rather than on using the Internet mainly for new customer acquisition," the study said.


In related news, 51 percent of nearly 200 U.S. marketing professionals surveyed by marketing services and technology provider DoubleClick Inc. also said they expect their budgets to rise in 2003. Forty-three percent in the DoubleClick survey said they expect their budgets to remain the same, and 6 percent said their budgets would decline.


Those in the survey who said they expected their budgets to increase predicted an 11 percent boost.


Fifty-seven percent of marketers in the DoubleClick study said they expect their e-mail spending to rise.


In other related news, New York research aggregator eMarketer yesterday forecast a 6.3 percent rise in online media spending in 2003 compared with a 4.7 percent rise for total ad spending.


Share this article:
You must be a registered member of Direct Marketing News to post a comment.

Sign up to our newsletters

Follow us on Twitter @dmnews

Latest Jobs: