2010 Marketing. Benchmark Report EXCERPT

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1 EXCERPT Marketing Benchmark Report Note: This is an authorized excerpt from the full Marketing Benchmark Report. To download the entire Handbook, go to: or call

2 Lead Author Sergio Balegno, Senior Analyst Contributing Authors Stefan Tornquist, Research Director Sean Donahue, Senior Reporter B2B & Research Editor Stefan Tornquist, Research Director i

3 Table of Contents Table of Contents... ii Director s Note... 2 Executive Summary... 3 #1. Past Marketing Challenges Will Increase in Importance in #2. How Marketing Budgets Changed in 2009 by Industry... 4 #3. Tactics That Take More Work Get Bigger Payoff... 5 #4. Marketers Are Happy With Social Media s Influence on #5. is Social, and It s Not Going Anywhere... 7 Chapter 1: Challenges to Achieving Marketing Objectives... 8 What Marketers Work Hardest to Achieve Marketing Objectives Ranked by Importance Marketing Objectives Ranked Very Important, by Organization Size Marketing Objectives Ranked Very Important, by Target Market Marketing Objectives Ranked Very Important, by List Size Primary Objective of Marketing Campaigns for Agency Clients Balancing Objectives With Consumer Reaction to Branded Marketing Learning From Past Challenges and Preparing for Challenges Ahead Challenges to Marketing in the Past 12 Months Past Year s Top Marketing Challenges, by Organization Size Past Year s Top Marketing Challenges, by Target Market Past Year s Top Marketing Challenges, by Organization Type Challenges Facing Marketers in the Next 12 Months Marketing Challenges Increasing in Importance Next Year, by Organization Size Marketing Challenges Increasing in Importance Next Year, by Target Market Marketing Challenges Increasing in Importance Next Year, by Organization Type Challenge of Generational Differences in Online Activities of U.S. Adults is Social, and It s Not Going Anywhere Chapter 2: Economics in a Recessionary Economy How Organizational Attitudes Affect Spending Attitudes About Marketing at Budget Time Attitudes About Marketing at Time, by Organization Size Attitudes About Marketing at Budget Time, by Target Market Attitudes About Marketing at Budget Time, by List Size Trends in Attitudes About Marketing at Budget Time, 2007 to Attitudes About Marketing at Budget Time for Agency and ESP Clients Finding a Place for Marketing in the Budget Where Marketing Resides in the Budget Where Marketing Resides in the Budget, by Organization Size Where Marketing Resides in the Budget, by Target Market Trends in Where Marketing Resides in the Budget, 2007 to Online and s Share of the Average Marketing Budget Orgs Over 500 Employees Online and s Share of the Average Marketing Budget SMB in Comparison, Share of Online Budgets All Respondents ii

4 2009 Marketing Budget Landscape Marketing Budgets, by Organization Size Marketing Budgets, by Target Market Marketing Budgets, by List Size Changes in Marketing Budgets Changes in Marketing Budgets, by Organization Size Changes in Marketing Budgets, by Target Market Changes in Marketing Budgets, by List Size Changes in Marketing Budgets for Agency Clients Only Two Line Items Benefit From The Downturn Staff Costs Are a Major Portion of Marketing Spending Staffing Levels for Marketing Staffing Levels for Marketing Responsibility, by Organization Size Marketers Play Multiple Roles in Online Marketing Marketers Who Manage or Perform Other Online Tactics Marketers Who Manage or Perform Other Online Tactics, by Organization Size Marketers Who Manage or Perform Other Online Tactics, by Target Market Chapter 3: Optimizing the Tactical Effectiveness of Marketing How the Effectiveness of Marketing Is Changing Effectiveness of Is Still Strong Changes in Marketing Effectiveness, by Organization Size Changes in Marketing Effectiveness, by Target Market Changes in Marketing Effectiveness for Agency Clients Balancing Level of Tactical Effectiveness With Level of Effort Required Which Tactics are Worth the Effort? Tactics Rated as Highly Effective, by Organization Size Tactics Rated as Highly Effective, by Target Market Tactics Rated as Highly Effective, by List Size Content Relevancy Is the Top Challenge and the Most Effective Tactic How Marketers Improve the Relevancy of Content Marketers Who Said Delivering Highly Relevant Content Is Very Important Implemented Relevancy Tactics in the Past 12 Months, by Organization Size Implemented Relevancy Tactics in the Past 12 Months, by Target Market Optimization Strategy: How Relevance Lifts Conversions Relevancy Based on Recipient Preferences and Behaviors Information Collected and Used to Improve Relevancy Information Collected and Used for Relevancy, by Organization Size Information Collected and Used for Relevancy, by Target Market Information Collected and Used for Relevancy, by List Size Notes From the Field: Identify Segments and Customize s According to Preferences Notes From the Field: Six Steps to Personalize Triggered Programs and Boost Engagement. 73 Permission Trumps Other Tactics for Consumer Acceptance Permission Replaces Other Media to Reach Consumers Percent of Time Consumers Spend With by Category Types of Permission That Consumers Consider Most Worth Reading Consumers Generally Are Receptive to Marketing Messages in Transactional s Subject Lines That Compel Consumers to Open Permission s iii

5 3.22 Top 10 Actions Consumers Take After Opening Permission s Comparing the Effectiveness of s and Newsletters Response Rates for s (Not Including Newsletters) to House List Response Rates for s (Not Including Newsletters), by Target Market Response Rates for Newsletters to House Lists Response Rates for Newsletters, by Target Market Response Rates for s Only Vs. Newsletters Numbers of and Online Newsletters by Category for 2004 Vs Notes From the Field: Using Dynamic Content and Testing to Optimize Newsletters Optimizing Effectiveness With A/B Split and Multivariate Testing Testing Elements to Improve Campaign Effectiveness Testing Elements to Improve Campaign Effectiveness, by Organization Size Testing Elements to Improve Campaign Effectiveness, by Target Market Testing Elements to Improve Campaign Effectiveness, by List Size Notes From the Field: Testing Content to Create Best Layout Boosts Performance Notes From the Field: Launch, Measure, Analyze and Modify to Improve Autoresponder Series Special Section: The 13 Point Plan to Increase Performance #1. Raising Opt-Ins: Offer Benefits to Encourage Consumer Subscriptions #2. Raising Opt-Ins: Start with a Field #3. Raising Opt-Ins: Optimize Forms #4. Raising Opens: Subject Line Length #5. Raising Opens: Include Action Words #6. Raising Opens: Design for the Red X #7. Raising Open & Clicks: Personalization and Segmentation #8. Raising Clicks: Design to the Preview Pane #9. Raising Clicks: More Links = More Clicks #10. Raising Clicks: Reduce the Number of Actions #11. Raising Clicks: Transactional Marketing #12. Raising Clicks on Ads in s: Catching the Eye #13. Increasing Reach Through Social Sharing Chapter 4: Building Bigger and Better Lists for Marketing Purposes Are Lists Still Growing? Trends of People Opting in to Lists Trends of People Opting-In to Lists, by Target Market Average Change in List Size Average Change in List Size, by Organization Size Average Change in List Size, by Target Market Notes From the Field: Growing Subscriptions with a PPC Campaign for a Major Event Notes From the Field: How to Build a Dream List of Newsletter Prospects Opt-In Lists Are Not an Option Types of Opt-In Lists Used for Permission Marketing Purposes Types of Opt-In Lists Used for Marketing Purposes, by Organization Size Types of Opt-In Lists Used for Marketing Purposes, by Target Market Types of Opt-In Lists Used for Marketing Purposes, by List Size Trends in Types of Opt-In Lists Used for Marketing Purposes, 2007 to Pros and Cons of Opt-in Methods Used to Optimize Deliverability Notes From the Field: How to Build a Subscriber List Inexpensively Using Blogs and Contests iv

6 Getting Personal With List Segmentation Information Collected and Used for List Segmentation and Personalization List Segmentation Information Collected and Used, by Organization Size List Segmentation Information Collected and Used, by Target Market List Segmentation Information Collected and Used, by List Size Trends in Information Collected and Used for List Segmentation, 2007 to Notes From the Field: Four Steps to Improve Subscriber Acquisition and Retention How Offers Encourage Opt Ins and Use What Consumers Want in Exchange for Opting In Opt-In Tactic Effectiveness for Business Products Opt-In Tactic Effectiveness for Business Services Opt-In Tactic Effectiveness for Consumer Products Opt-In Tactic Effectiveness for Consumer Services ed Coupons Used in Online Stores ed Coupons Used in Offline Stores Chapter 5: Managing Deliverability More Effectively Deliverability Issues Are Changing for the Better Marketers Gauge Changes in Deliverability Issues Changes in Bounce Backs and Undeliverable Average Bounce Rates Changes in Opt Outs and Unsubscribes Top Reasons Consumers Unsubscribe From Lists Average Unsubscribe Rates Changes in Spam Complaints Trends in Average Quarterly Spam Levels for 2008 and Notes From the Field: How to Make Your Preference Center CAN-SPAM Compliant Marketers Continue Efforts to Improve Deliverability What Marketers Do to Improve Deliverability Top Deliverability Tactics Implemented in the Past 12 Months, by Organization Size Top Deliverability Tactics Implemented in the Past 12 Months, by Target Market Top Deliverability Tactics Implemented in the Past 12 Months, by List Size Trends in Deliverability Tactics Implemented, 2007 to The Best Solution for Sending Solutions or Providers Used to Send Campaigns to House List Solutions or Providers Used to Send Campaigns, by Organization Size Solutions or Providers Used to Send Campaigns, by Target Market Solutions or Providers Used to Send Campaigns, by List Size Trends in Solutions or Providers Used to Send Campaigns, 2007 to Most Popular Client Software in Use Consumers Notes From the Field: Overnight Send Time for Lifts Open Rate, CTR and Registrations Chapter 6: Measuring Success with Marketing Analytics Measuring What You Need to Know Campaign Metrics Tracked Campaign Metrics Tracked, by Organization Size Campaign Metrics Tracked, by Target Market Campaign Metrics Tracked, by List Size Trends in Campaign Metrics Tracked, 2007 to v

7 Notes From the Field: Achieve Up to 1,2000% Increase in Clickthrough Rate With Newsletter Links and Bonus Content Conversion Is a Key -to-Website Metric Defining a Website Conversion from an Clickthrough Defining a Website Conversion, by Organization Size Defining a Website Conversion, by Target Market Defining a Website Conversion, by List Size Notes From the Field: Autoresponder Produces 10-Fold Boost in Ecommerce Revenue Per 182 The Money Trail Financial Metrics Related to Marketing Being Tracked Marketing Financial Metrics Tracked, by Organization Size Marketing Financial Metrics Tracked, by Target Market Marketing Financial Metrics Tracked, by List Size Marketing Financial Metrics Tracked, 2008 Vs Chapter 7: Special Report on Social Sharing an Emerging Tactic Why and Social Media Are Made for Each Other Marketing Goals That Social Sharing Helps You Accomplish What Social Sharing Accomplishes, by Organization Size What Social Sharing Accomplishes, by Target Market What Social Sharing Accomplishes, by Organization Type Marketer Insights on Social Sharing B2C Marketers Share Insights on Social Sharing B2B Marketers Share Insights on Social Sharing Overcoming Obstacles to Social Sharing Barriers to Adopt Sharing Content With Social Media Sites Major Barriers to Adopt Social Sharing, by Organization Size Major Barriers to Adopt Social Sharing, by Target Market Major Barriers to Adopt Social Sharing, by Organization Type Is More Important Than Social Media, by Target Market Number of Marketers Who Agree That Social Media Will Become a Standard Tactic Like , by Target Market Notes From the Field: Promotional Inspires Interaction and Drives Social Sharing Integrating and Social Media Status of Social Sharing Strategies in Integrating Social Media Into the Marketing Mix How Well Does Social Media Fit With Other Marketing Tactics? Notes From the Field: How Social Sharing Buttons Increase Interaction Why Needs Social Media Marketers Planning to Use Social Sharing as a List Growth Tactic, 2008 to Where Buyers Receive Information About Your Brand, Products and Company Visitors to Social Media Sites Are More Likely to Spread What They Find Why Social Media Needs Is the Most Acceptable Channel for Permission-Based Messaging Acceptability of Messages Sent via Vs. Social Networks is Social, and it s Not Going Anywhere Chapter 8: Special Report on B2B Marketing Adding Value to the B2B Marketing List vi

8 8.01 Adding List Segmentation Criteria Adds to Campaign Targeting Ability Targeting or List Segmentation Criteria Very Likely to Be Used, by Organization Size Targeting or List Segmentation Criteria Very Likely to Be Used, by List Size Notes From the Field: B2C Style Promotional Content Beats Informational in B2B Test Lead Nurturing and the B2B Sales Cycle Average B2B Sales Cycle From Lead Generation to Sales Conversion Once a Lead Is Generated, Which Stage in the Process Is Most Challenging? Length of the Buying Process Today, by Purchase Amount Number of People Involved in the Buying Process Today, by Purchase Amount Information Resources Used During Key Stages of a Purchase Decision Process Notes From the Field: How to Optimize a Lead Nurturing Campaign That Boosts Conversions Chapter 9: Special Report on International Marketing Delivered Across National Borders for Marketing Purposes Transnational Sent Transnational Sent, by Organization Size Transnational Sent, by Target Market Transnational Sent, by List Size How High of a Priority Is Transnational Ranking the Importance of Transnational Ranking the Importance of Transnational , by Organization Size Ranking the Importance of Transnational , by Target Market Ranking the Importance of Transnational , by List Size Best Practices for Localizing Content to Foreign Recipients How Transnational Is Localized How Transnational Is Localized, by Organization Size How Transnational Is Localized, by Target Market How Transnational Is Localized, by List Size How Transnational Is Localized, by Importance Given to Transnational Chapter 10: Special Report on Consumer Attitudes Why They Hit Spam Consumers Use the Report Spam Button to Unsubscribe Perceived Frequency of Spam Hasn t Changed Perceived Frequency of False Positives Rises Actions Taken to Fight False Positives Our Growing Definitions of Spam Unfamiliar Companies Our Growing Definitions of Spam Familiar Companies Number of Inboxes Maintained by Consumers Use of Social and Mobile Technologies Appendix 1: Demographics of the Marketing Benchmark Survey A1.01 Number of Employees in Organization Worldwide A1.02 Marketers Involvement in Other Marketing Tactics A1.03 Type of Organization Marketer Works for A1.04 Primary Target Market of Organization s Marketing A1.05 Organizations Maintaining a House List for Marketing Purposes A1.06 Size of Organization s Marketing List A1.07 Organization s Primary Industry A1.08 Average Percent of Organizations by Marketing Budget Ranges for vii

9 Appendix 2: Marketing Glossary Appendix 3: Partnered Research viii

10 Director s Note Welcome to MarketingSherpa's Marketing Benchmark Report for As always, this annual edition has been completely and comprehensively re-researched and rewritten. If you have an older edition around, stick it on the library shelf and start working from this new, seventh edition - numbers have changed (in some cases dramatically) in the past 12 months. In addition to all the basic marketing stats you would expect, including cost and response data, we have included major *new* studies in this Guide: # Marketing Benchmark Survey 1,493 real-life marketers from a range of business and consumer-focused firms answered our extensive survey (and some discussed their answers in follow-up calls) in August and September of Discover how your internal tactics and stats match up against the norm. You may be surprised. #2. Special Report on Social Sharing Social media has taken the marketing world by storm, and its effects extend to . This section looks at the effect and tactics of social sharing while putting the role of social in perspective for direct marketers. #3. Special Report on Consumer Attitudes Marketers have one idea of what Spam is, consumer have another. Get insight into their views and how they use differently today from in the past, thanks to this survey conducted in partnership with QInteractive. #4. Focus on Business to Business Marketing The problems and opportunities of B2B are unique. This chapter explores how the role of is integral and changing in marketing to the long sales cycle. #5. Year Two of Sherpa s International Study For many organizations, marketing overseas has gone from the back burner to an essential opportunity for growth. Learn how your peers are looking out of the country for new names and customers. All in all, this year's edition of the Marketing Guide features almost 200 charts, tables and graphs. It's almost 300 pages long and we hope of real, practical value. Our goal is to make your job easier. If you can't find a needed marketing stat here, please let us know. We will be sure to continue to widen our research efforts to see if we can add it next year. In the meantime, best of luck with your campaigns over the next year. Stefan Tornquist Research Director, MarketingSherpa Inc. 2

11 Executive Summary #1. Past Marketing Challenges Will Increase in Importance in 2010 Very important challenge last year Delivering highly-relevant content to recipients Importance will increase next year 76% 82% Competition with social media for recipients' time and attention Measuring and proving the ROI of marketing programs Getting people to opt-in to lists Integration of databases with systems Legitimate being perceived as spam deliverability 23% 71% 57% 65% 52% 62% 56% 61% 48% 54% 57% 52% 0% 20% 40% 60% 80% 100% Source: MarketingSherpa's Marketing Benchmark Survey Methodology: Fielded Jul-Aug 2009, N=1,493 Much can change in a year impacted by the enormous pressure of an economic recession. Though many of last year s challenges will become more important going forward, one challenge stands out. More than three times the percentage of marketers who thought competition with social media for recipients time and attention was very important last year think its importance will increase next year. Return on investment, list growth and database integration are also gaining in importance as we look ahead. While delivering highly relevant content to recipients continues to rank at the top, it is declining slightly as marketers conquer the complexity of this essential tactic and consider it less challenging. 3

12 #2. How Marketing Budgets Changed in 2009 by Industry Business / Financial Services Decreased budget -7% Increased budget 51% Education / Healthcare Manufacturing / Consumer Packaged Goods -11% -6% 41% 47% Retail / Ecommerce Computer Hardware / Software -12% -11% 39% 38% Other Industry -17% 36% Publishing / Media -18% 35% Travel / Leisure / Hospitality -18% 29% Source: MarketingSherpa's Marketing Benchmark Survey Methodology: Fielded Jul-Aug 2009, N=1,493-30% -15% 0% 15% 30% 45% 60% No matter what industry your organization is in, chances are your total marketing budget decreased substantially in But there is good news for marketers. As this chart shows, a much larger percentage of organizations increased their marketing budgets than decreased them. This positive change occurred in only two marketing tactics: and social media. In this age of cost consciousness and demand to justify ROI, marketing continues to prove its value as a highly cost-effective tactic. 4

13 Level of effectiveness MarketingSherpa Marketing Benchmark Report #3. Tactics That Take More Work Get Bigger Payoff 80% 70% 60% 50% Sphere size indicates level of usage to house lists Delivering content relevant to segment 40% 30% 20% 10% Ads in third-party newsletters Sharing on social networks Event-triggered autoresponder s 0% to rented lists 0% 10% 20% 30% 40% 50% 60% Source: MarketingSherpa's Marketing Benchmark Survey Methodology: Fielded Jul-Aug 2009, N=1,493 Level of effort required In today s economy, it is common for marketing departments to be understaffed and overburdened. This makes the amount of time and effort required to implement a tactic an important consideration. This chart shows the balancing act that marketers do to maintain maximum effectiveness with minimal effort. to house lists and delivering content relevant to a segment are roughly equal in usage. However, the latter increases campaign complexity and requires a greater level of effort, but is also much more effective. As the name implies, event triggered autoresponder s are automated and require some setup time but much less ongoing effort to implement than the tactic of delivering relevant content. They are also about half as effective. 5

14 #4. Marketers Are Happy With Social Media s Influence on I Agree I Disagree I'm not sure Extends the reach of content to new markets 81% 3% 16% Increases brand reputation and awareness 78% 3% 19% Increases the ROI of programs 53% 7% 40% Accelerates the growth of lists 47% 10% 43% Generates more qualified leads 31% 13% 57% Source: MarketingSherpa's Marketing Benchmark Survey Methodology: Fielded Jul-Aug 2009, N=1,493 0% 20% 40% 60% 80% 100% Social sharing allows recipients to share content on popular social networks and other social media sites. It is a rapidly emerging tactic and, as this chart shows, about eight in 10 marketers agree that social sharing extends the reach of content to new markets and increases brand reputation and awareness. We have dedicated a chapter of this Benchmark Guide to a special report on this topic with insights from marketers on strategies unique to social sharing. Many have already learned some valuable lessons. For example, one marketer told us, As with any messaging intended to build a relationship with prospective customers, the content shared on social media sites must NOT be sales oriented. We began sharing content that was heavily geared toward promotion. This was not effective in the social environment. We now concentrate on educational and informational topics that our prospects and customers will find interesting rather than on aggressive selling information. This is building a preference for our brand within the social communities we are reaching. 6

15 #5. is Social, and It s Not Going Anywhere Q: When you want to share something from the Internet with your friends or family, such as a video, link or article, what methods do you use? I them the link 78% Share it through social media 22% Other 17% Share it offline - phone, txt or conversation 13% Post to my blog 4% 0% 20% 40% 60% 80% Source: MarketingSherpa & QInteractive, SPAM Complainer's Survey, October 2009 Methodology: Survey is still in field, preliminary findings with N= 245 Is going to kill ? It s a question we love to ask every few years when some new technology comes along. RSS sparked the last wave of discussions, and of course, now it s social. Will social media affect ? Definitely. Will it kill the medium? Far from it. After all, is the original opt-in tactic, while social and mobile are newcomers, and works in tandem with most other tactics to increase engagement, deliver relevant content and build contact databases. In the chart above, we take one view of how is used to share information, because that activity is so central to social media sites. dominates even in this regard. The point is that when we look at media use over the last 15 years, we see a pattern of aggregation and adoption rather than replacement. Some media suffer in the exchange, but none are eliminated entirely. More commonly, their uses get more refined. For example, we may find that Twitter and Facebook gradually reduce our use of to convey quick messages and content to our social groups, but it s far less likely that social media would replace for commercial transactions, receipts and the like. 7

16 Fax form to: (401) Special Offer! Save $ And Get PDF + Print Copy for Price of One All-New Research: The Convergence of and Social Media, List Building, Deliverability, Conversion Rates and More 261 Pages Includes: 172 Charts & Tables Special Report on Social Sharing (25 pages) Special Report on B2B Marketing (12 pages) Special Report on International Marketing (13 pages) YES! Please me my PDF instant download, plus ship my bonus printed-and-bound 561 page copy when available. I ll pay only $447 $347; plus shipping and handling. My order is risk-free because it s covered by MarketingSherpa s 100% satisfaction guarantee. YES! Please me my PDF instant download I ll pay only $397 $297; plus shipping and handling First my PDF copy to: (we respect your privacy) About Praised by The Economist, Harvard Business School s Working Knowledge Site, and Entrepreneur.com, MarketingSherpa is a research firm publishing benchmark data and how-to guidance for marketing professionals. Then mail my printed copy to: Name Organization Title 237,000 marketers read our exclusive Case Study newsletters every week, and thousands attend our annual Summits on , subscription sales, and b-to-b marketing. 100% Satisfaction Guarantee MarketingSherpa guarantees your satisfaction. If anything we sell doesn t meet your satisfaction, return it for a 100% hassle-free refund immediately! MarketingSherpa, Inc. 499 Main Street, Warren, RI, Phone: (if outside the US, call ) Fax: (401) Address City State/Prov Country Zip/Postal Phone (in case of questions) Charge my: MasterCard Visa AMEX Card# Exp. Date Print Cardholder Name Signature OR Bill Me* Check Enclosed to MarketingSherpa Inc. * Billing: I understand I will not receive the Guides until payment is received CODE: ES1010 Fax form to: (401)

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