Despite a volatile first quarter in the equity markets, a continued expectation of low (or no) growth across the US and global sectors, US-based direct and data-driven marketers businesses expanded throughout 2015 and all indicators point to another strong year ahead for the discipline.
Major trends continue converging to fuel increased spending on data-driven efforts, including the proliferation of media devices, audience engagement on those devices (and the growing expectation of anytime, anywhere relevant content), an ongoing shift to programmatic marketing, continued adoption of and investment in technology to support these insight-based efforts, and a growing supply chain of providers eager to guide the evolving strategies and demands of today’s marketers.
Not surprisingly, though a small majority (52.1%) of data-driven marketing (DDM) practitioners surveyed in January expressed confidence that the US economy was well positioned for growth, a larger proportion (72.9%) said they were optimistic about the prospects for the DDM business.
Practitioners continue to confirm that data is critical to their marketing strategies and efforts—and growing more so. According to Winterberry Group’s Global Review 2015 report published with the GDMA, 81.3% of global marketing practitioners called data “very important” to their efforts, compared to 80.4% that said the same last year.
Spending patterns underscore this focus on data; in 2015 topline media spending remained relatively flat, accounting for $126.5BB in investment, which was mostly buoyed by spending on television ($68.8BB). The election cycle and summer Olympics should keep TV budgets up through 2016—and the channel will again support the rest of the “measured media” mix, though the real growth has been, and will continue to be, in data-driven media—the digital channels and the most traditional data-driven approach, direct mail.
Marketers increased spending on data-driven approaches by 6.4% in 2015, to a total of $163.7BB. Though investment in digital media is growing fastest (spending on display advertising rose by 23.3% to $24.9BB and spending on search rose by 12.8% to $27.3BB), direct mail continues to command substantial—and growing budgets—due to its continued efficacy, a less crowded inbox, rising postage costs and new ways to integrate messaging with mail, email and digital activity. (Direct mail accounted for $46.8BB of spending in 2015 and is expected to rise to $47.0BB this year).
If we consider data to be the “fuel” that powers these efforts, marketers are lining up at the pumps, filling their organizational engines with the raw information as well as the refining elements (particularly analytics) to run their strategies and programs. Winterberry Group’s proprietary data spend model shows that investment in data, including related services, analytics and technology in support of direct mail, email and display advertising grew at a rate of 7.3%, to $11.6BB in 2015 and is expected to grow to $11.72BB this year with spending on data in support of display advertising and email growing most (26.6% and 12.7%, respectively).
While marketers will continue to invest in all media channels and supporting data—albeit at various rates—we expect an overarching trend for 2016 to be a diminished focus on the channels themselves. Rather, practitioners will increasingly aggregate disparate data assets from across their organizations (and marketing silos) in an effort to glean insights to inform engagement strategies.
Ultimately, those insights will inform a broader set of PII and anonymous (though segmented) media and CRM tactics, and though all media channels will remain necessary options in the mix, as the data grows more important, the channels themselves will grow less so as marketers continue on the path towards “always-on omnichannel,” de-emphasizing the batch campaign approach to marketing (though that is not going away anytime soon). Winterberry Group expects brand marketers will increasingly place their audience, including customers, visitors, browsers and buyers, at the center of all efforts and use increasing amounts of data to engage them in the more effective ways.