While most marketers expect their budgets for 2002 to increase or stay the same from 2001, dollars spent on most traditional channels are declining as budgets shift toward the Internet and direct response television, according to a survey released by DoubleClick yesterday.
Fifty percent of the marketing executives surveyed said their 2002 budgets will be higher than they were in 2001, and 27 percent expect them to stay flat, according to New York-based DoubleClick's so-called Spring 2002 Marketing Spending Index. Twenty-three percent expect their budgets to decline.
Marketers apparently continue to eye a migration toward e-mail, as 61 percent predicted their budgets for the channel to grow over the next 12 months. Respondents overall said they expected e-mail's share of the budget relative to other channels to rise by 17 percent.
E-mail's predicted growth in budget share was second to direct response television, for which the marketers predicted an 18 percent rise.
DRTV's strong showing indicates marketers' increased focus on more accountability and more efficient media buying, said Bob Yallen, president of DRTV agency Inter/Media Advertising, Encino, CA.
“Many companies are migrating to the DRTV because it's a heck of a way to efficiently buy and track,” he said. “The basic parameters of direct response [television media buying] is that you're buying it on a pre-emptable and often last-minute basis. It's usually not guaranteed as far as audience delivery goes. The pro is you're buying it at a substantially lower rate.”
Inter/Media has grown from $100 million to $200 million in billings in 2002, Yallen said, because existing clients are using more DRTV and some Fortune 100 firms from various sectors are using it for the first time.
Clorox is one of Inter/Media's more recently signed clients, for example. Also, the U.S. Army recently made DRTV a “significant” part of its yearly plan, Yallen said.
Meanwhile, the marketers in DoubleClick's survey predicted that catalog marketing's share of their budgets will decline 13 percent.
However, even with the postal rate increase, Mike Hayden, senior vice president, list brokerage at business-to-consumer catalog list firm Millard Group Inc., Peterborough, NH, said he sees no evidence of a shift away from catalog marketing.
“We're actually hearing from some of our mailers that they're going to be ramping up circulation in the spring/summer time frame,” he said, naming upscale apparel cataloging as a category showing signs of mail-volume growth.
“Most of our clients are realizing that the Internet is just another channel for sales to come in,” he said. “It's more operationally efficient as far as placing an order, but in incremental sales, they're realizing there is not really a plus side [online].”
Prospecting online “has been a great disappointment to many of our clients,” Hayden said. “Our clients are trying to stay ahead of the curve on Web marketing, but there is still a very big emphasis on mailing catalogs.”
Jay Schwedelson, corporate vice president of list firm Worldata/WebConnect, Boca Raton, FL, said his clients for the most part also are not making major shifts in their budgets.
“Those who are as sophisticated in the online environment as they are in the offline environment are testing shifting their budgets, but a great majority of direct marketers don't have the luxury of that type of sophistication,” he said.
Meanwhile, respondents to DoubleClick's survey predicted a 7 percent decline in direct mail's share of their budgets, a 7 percent decline in telemarketing, a 2.3 percent decline in radio, a 1.4 percent decline in print and a 1 percent decline in television.
But they predicted that online marketing will get a 9 percent boost relative to other channels and marketing through channels like resellers will get a 15 percent budget share increase.
Respondents said on average that their Web sites account for 12 percent of their sales. Retail and direct sales forces reportedly account for 30 percent and 28 percent of sales on average, respectively. Resellers, telephone and catalogs reportedly account for 11 percent, 9 percent and 7 percent of sales on average, respectively.
Seventy-four percent of those surveyed said they expect Web site revenue to increase in the next 12 months, according to DoubleClick.
The survey conducted in April was of 190 marketing executives for companies with revenue of at least $50 million and budget responsibilities of at least $1 million.
