Data-Driven Marketing Spending Grew Substantially – Best First Quarter in Five Years
Confidence in Data-Driven Marketing Continues to Build
The Direct Marketing Association (DMA) today released its Quarterly Business Review (QBR) for the first quarter of 2014. DMA partnered with management consulting firm Winterberry Group on the report. The report shows substantial growth in spending on data-driven marketing (DDM), and high confidence in DDM.
“Through the past four quarters, we’ve seen confidence in data-driven marketing build – and marketers are expressing optimism that measurable marketing will produce even greater results going forward,” said DMA Interim CEO Thomas Benton. “As the economy strengthens, marketers are confident that responsible use of customer data will continue to deliver high value to the entire data-driven community.”
“Marketers’ confidence in the future of data-driven marketing is underscored by their expanding investments in data, talent and the media channels that reach consumers in the most engaging ways,” noted Jonathan Margulies, managing director at Winterberry Group. “It will be exciting to see how these investments pay off for practitioners—and present new opportunities for audience engagement—over the coming year.”
The report highlights several key trends:
Fully 42 percent of QBR respondents said they expanded their investments during the first quarter, up from 38.4 percent in the previous quarter. , U.S. spending on data-driven marketing grew more substantially during the first quarter of 2014 than as reported during any calendar quarter since 2011 (and during any first quarter since at least 2009). On an index basis, DDM spending growth reached 3.32 (on a scale of 5, where 5 indicates spending increased significantly), the highest rate seen in over two years and a substantial increase from last quarter’s reported 3.23 increase.
Attention to Email
On a percentage-of-budget basis, email reemerged as a top target for new or expanded marketer spending, sharing the top spot among marketing channels with social media, and search. Although digital alternatives are starting to replace traditional channels in the media mix, some QBR panelists noted that experience in traditional direct marketing is paving the way for success in digital formats.
Poised for Growth
According to QBR respondents, the community of data-driven marketers and suppliers increased investment in new staff and customer acquisition, suggesting broader economic confidence and a focus on business expansion. Investment in new staff increased for the first time in over a year, suggesting that the first quarter of 2014 may have been used to recruit and retain new talent. In addition, customer acquisition accounted for more than 61 percent of first-quarter DDM budgets, a higher percentage than during any other quarter in two years.
- Building off current enthusiasm, QBR participants voiced optimism that DDM would deliver even more substantial results with better economic conditions and growing “C suite” appreciation for the value of customer data.
- Just as they closed out 2013, DDM practitioners and suppliers remain bullish about the practice: 75.4 percent of respondents said they’re confident in its continued potential for growth.
About DMA’s Quarterly Business Review
The Quarterly Business Review is published by the Direct Marketing Association (DMA), with research and analysis provided by Winterberry Group, a New York-based strategic consulting firm serving the advertising, marketing services, media and information industries.
Its conclusions are based on results from an online survey of DMA members, deployed in April 2014 and focused respectively on marketers and the marketing service and technology solutions providers that work with them to develop, launch and optimize campaigns. The latter group comprises a wide range of suppliers, including agencies, data and database service providers, production companies and a multitude of other entities supporting marketing program execution.
Altogether, DMA received 284 usable survey replies, which included 147 marketer respondents and 137 providers of marketing services and technology solutions.
The report is free for DMA members. Non-members can purchase a copy for $49.95 from DMA’s Bookstore.
About Winterberry Group
Winterberry Group is a unique strategic consulting firm that supports the growth of advertising, marketing, media and information organizations. Affiliated with Petsky Prunier LLC — a leading investment bank providing merger and acquisition advisory services to companies in the same sectors—the Firm offers its clients strategic perspective that is unparalleled in its addressable industries, while PPLLC maintains exceptional relationships with industry executives and business owners. This combination of market intelligence, research and strategic operating experience (as well as the ongoing dialogue among buyers and sellers of marketing businesses) provides an educated outside perspective that we bring to each engagement. For more information, visit: www.winterberrygroup.com.
About Direct Marketing Association (DMA)
The Direct Marketing Association (www.thedma.org) is the world’s largest trade association dedicated to advancing and protecting responsible data-driven marketing. Founded in 1917, DMA represents thousands of companies and nonprofit organizations that use and support data-driven marketing practices and techniques. DMA provides the Voice to shape policy and public opinion, the Connections to grow members’ businesses and the Tools to ensure full compliance with ethical and best practices as well as professional development.
In 2012, the Data-Driven Marketing Economy (DDME) added $156 billion in revenue to the U.S. economy and fueled more than 675,000 jobs. The real value of data is in its exchange across the DDME: 70 percent of the value of the DDME – $110 billion in revenue and 478,000 jobs – depends on the ability of firms to exchange data across the DDME.
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