US direct and digital advertising spending increased 2.7% to $154.4 billion in 2010, according to a report from the Winterberry Group, an advertising and marketing consultancy.
Digital advertising accounted for $27.7 billion of that amount, with digital display advertising spending increasing 10.7% year-over-year. Direct response print advertising spending, which suffered a 3.6% decline in 2010, was the only direct marketing segment to see a decrease in spending.
Bruce Biegel, managing director of the Winterberry Group, told the Direct Marketing Club of New York on January 13 that US direct and digital ad spending will increase by 6.2% in 2011 to $163.9 billion. Direct mail spending will grow 5.8% to $47.8 billion this year, driven by acquisition mail increases.
“The growth is attributable to a return of confidence in the economy,” Biegel told Direct Marketing News in an interview.
He also said the growth represents a “light increase in marketer budgets.”
“If you get a 2% increase in ad spend, you’re going to get a significant amount of money going to direct and digital,” he said. “It doesn’t take a huge amount of money to make a difference there.”
Biegel also told Direct Marketing News that direct mail “still really works well for acquisition because it’s easier to target [than other channels].” He contended digital as an acquisition tool is still finding its way, so despite a “massively overstaffed Post Office” and other issues, direct mail will be an important tool for direct marketers.
Various factors will drive the predicted acquisition mail growth, according to the study. This will include an expected continuation of economic growth; a rebound in the financial services, retail and auto sectors; and no exigent postal mail increase. The report also predicted that increased use of analytics, cross-channel integration and better hygiene will restrain volume and spending growth, and that excess production capacity will keep costs in check.
Biegel also predicted that that marketers will continue to apply traditional direct marketing concepts, such as segmentation, personalization and data collection, to online marketing, and that an improved economy will lead marketers to reinvest in acquisition, tests and new media.
He also said he expects regulators to explore consumer privacy and data tracking, and that real-time media buying and activation of audience data will lead to a growth in online display advertising.