Marketing Insight 2011

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1 Marketing Insight 2011 A research project into Irish marketers use of Produced by in conjunction with

2 Contents Introduction 1 Foreword by Tom Trainor 1 Introduction by Andrew O Shaughnessy 2 Executive summary 3 About the research 4 Section 1 Use of by Irish marketers 7 Importance of in the marketing strategy 7 What marketers use for 8 systems marketers are using 9 Section 2 targeting and volumes 10 Frequency of campaigns 1 0 database sizes 1 1 Use of personalisation in marketing 1 2 Section 3 benchmarks 14 metrics being tracked 1 4 Average open rates 1 6 Average click through rates 1 7 Section 4 budgets 18 Budgets allocated to 1 8 Expected change in expenditure 1 9 Where budgets will come from 20 Section 5 - Challenges facing marketing 21 Future challenges facing marketing 21 Section 6 - Social media and marketing 22 Social media and marketing 22

3 Introduction Foreword by Tom Trainor Welcome to the latest edition of Marketing Insight, a research project into how Irish marketers use . The last survey gave us many insights in the use of by Irish marketers. The continuing commitment of Irish Marketers to marketing is clear from this year s survey results. It is heartening to see that Irish companies are becoming more sophisticated in their marketing campaigns and are more focused on measuring the results of each campaign. The survey this year was conducted along the same lines as the last survey with over 400 marketing professionals from various industry sectors taking part in the research and answering questions on their use of , their audiences, benchmarks and their view of the challenges for marketing. In the analysis of this year s survey, comparisons are made with the last survey results to identify trends and changes in practices in the use of marketing. From this year, we will also track the use of social media in marketing campaigns. This report will give Irish Marketers valuable information about the techniques, trends and attitudes towards marketing in Ireland. Hopefully, it will give readers the inspiration to invigorate their own marketing strategy. Wishing you success in your future marketing campaigns. Tom Trainor Chief Executive The Marketing Institute 1

4 Introduction Introduction by Andrew O Shaughnessy We are delighted to once again collaborate with the Marketing Institute on this, the third Marketing Insight report. The report will be of interest to marketers seeking insight into emerging trends and attitudes towards marketing. Recent research shows that retaining one existing customer is five to seven times more profitable than attracting one new customer. excels at nurturing relationships - and this fact is reinforced in this survey as the majority of those surveyed say one of the main uses of is for customer retention. remains a very important or important part of the marketing strategy, and this third report shows continued growth in the use of outsourced solutions to create, deploy and measure results of campaigns. This reflects a growing sophistication in the market for solutions that will allow marketers to track campaign metrics and build ROI from their ongoing communications. Since the last survey social media has emerged as a must do for marketers. We think social media is an exciting development and offers a huge opportunity for marketers. However, many are not sure how to market their products and services in these new channels and are looking at campaigns as either or social network. The real power is in social and working together. Marketers can use the push power and share-ability of to drive social networking efforts; and then take advantage of their expanding fan base online to capture new subscribers, giving a company the ability to continue communicating on a one-on-one basis directly in the inbox. This integrated marketing approach in the digital space is the way forward, and those who look at how channels can work together will be the ones that succeed. Andrew O Shaughnessy CEO Newsweaver 2

5 Introduction Executive Summary In this year s survey, marketing remains an essential part of marketers marketing mix with over 84% of marketing is increasingly used by marketers to maintain customer relationships, build brand awareness and increase website traffic. It is also utilised by a large percentage of respondents for internal communications; and as a tool to drive lead generation and online sales. In this year s study, we have included a new section dedicated to the use of social media in marketing. Interestingly there is a 50/50 split between respondents who use social media in their campaigns and those who do not which could suggest that marketers are still trying to figure out how to integrate social media into their marketing strategies. When we look at the trend in which metrics are being tracked and recorded since 2008, we see a lift across the board. As more marketers look to outsourced solutions for their marketing needs, they get easy access to these metrics. This allows them review opens, clicks and depth of engagement through s, which in turn enables them build true ROI from their campaigns. Some of the other major findings of the 2011 research: A 12% increase over the 2009 results in the number of respondents sending campaigns daily to at least once a month. A 10% increase in the number of respondents using to drive online sales. A 16% increase in the level of importance B2C placed on marketing as part of their overall marketing strategy There is a 9% increase in the 5,000 25,000 database size since the 2009 results. Links to Facebook, LinkedIn and Twitter are the number one use of social media in marketing. As with previous years inbox overload and spam remain the biggest challenge perceived by respondents for marketing, closely followed by deliverability and unwillingness of people to opt in to new lists. In both B2B and B2C there is a significant increase in the number of organisations using outsourced solutions. 48% of marketers do not expect their organisation s expenditure on to change in the next 12 months. The majority of B2C respondents had open rates in the 10-30% rate, while B2B respondents showed open rates of %. 3

6 About the research This research is now in its third year running and aims to uncover current practices and trends in the use of marketing in Ireland. The research was conducted through an online survey sent to over 1800 members of the Marketing Institute. 400 business professionals completed the survey, ranging from sales and marketing executives to company CEOs and owners of small, medium and large organisations. Respondents represented a cross section of industry types and sizes and included those working in both B2B and B2C sectors. Q. What is your job title? Owner / CEO / Director / MD Marketing / Brand Management Marketing / Brand Executive 5% 19.7% 28.3% Account / Sales Management Other 19% 27.9% 4

7 Q. Which industry sector is your organisation in? Marketing / Media / Publishing Banking / Finance / Insurance IT / Telecommunications Education / Training Non profit / Trade association Consulting Wholesale / Distribution Hotel / Restaurant Retail Transportation / Travel Manufacturing Entertainment Medical / Healthcare Government Construction Agriculture / Forestry / Fishing Utilities 18.4% 14.5% 9.6% 8.5% 7.1% 5.7% 5.0% 4.6% 4.3% 4.3% 3.9% 3.5% 3.5% 2.8% 2.1% 1.4% 0.7% Q. Which of the following best describes your organisation s marketing audience? Only businesses Primarily businesses Roughly split between consumers and businesses Primarily consumers Only consumers 26.1% 23.5% 21.9% 19% 7.7% 1.6% 5

8 Q. How many marketing personnel are there in your organisation? To help gauge the size of the organisations participating in the research we asked respondents to specify how many marketing staff they employed. 48% of respondents were from smaller companies with less than two full-time marketing staff. 28% of respondents were from medium sized companies with 2-4 full- time marketing staff and 21% were from larger companies with more than five-full time marketing staff. 1 full-time person 29.1% 2-4 full-time people 28.4% 1 part-time person 18.8% 10+ full-time people 10.4% 5-7 full-time people 5.8% 6-10 full-time people 4.9% 2.6% The breakdown of companies represented in this 2011 survey shows a significant decrease in the number of full-time staff employed in medium and larger organisations (5 plus full-time people) and remains the same (Less than 4 full time people) in smaller organisations. 6

9 Importance of in the marketing strategy Similar to previous years the vast majority of respondents (84%) state that as part of their marketing strategy is either very important (49%) or important (35%). This is a significant result in that it highlights the critical importance that marketing professionals give to communicating effectively with their core audiences via . Q. How important is as part of your overall marketing strategy? Compared with past surveys, there is a major increase (16%) from 71% to 87% of respondents stating that is very important or important in their marketing strategy. Very important 52% 43% Important 44% 32% Neither important or unimportant 13% 7% Not important at all 6% 3% B2C B2B 7

10 What marketers use for Respondents were asked what they use marketing for most often in their organisation and answers were summarised below. Q. Which of the following do you use marketing for within your organisation? Maintaining customer relationships 65.7% 29.7% 4.6% Generating new sales leads 33% 50.9% 16.1% Driving direct online sales 27.9% 34.9% 37.1% Building brand awareness 46.2% 39.9% 13.9% Driving offline sales 23.3% 52.4% 24.3% Increasing website traffic 42.8% 42.2% 15% Internal communications 53% 27.4% 19.6% Always Sometimes Never As with previous years, a large majority of respondents in the survey always use for Maintaining customer relationships (66%), Building brand awareness (46%), Internal communications (53%) and Increasing website traffic (23%). Compared with 2009, we saw a 10% increase in respondents always using to drive online sales. 8

11 systems marketers are using A large proportion of those surveyed (30%) do not use a dedicated marketing software product and continue to rely on basic facilities such as outlook. The figure has dropped 16% from 2009 when the number of respondents using basic facilities was at 46%. Q. What marketing solution are you currently using? Normal such as outlook (no special software or database) Advanced web-based solution Basic web-based solution Full service (outsourced to an service provider) In-house system (software on your own servers) 29.9% 18.4% 17% 15.3% 14.3% 5.1% A closer analysis of the results shows that those working in B2B environments are far more reliant on basic systems such as outlook than their counterparts in B2C. In both sectors however there is a significant increase in the number of organisations using outsourced solutions. Normal such as outlook (no special software or database) Basic web-based solution Advanced web-based solution In-house system (software on your own servers) Full service (outsourced to an service provider) 5% 10% 15% 20% 25% 30% 35% 40% B2C B2B 9

12 Frequency of campaigns Respondents were asked how often they conduct marketing campaigns. The results show that 58% of marketers send campaigns at least once a month while 16% of them send campaigns less than once a quarter. The 2011 results compared to 2009 show a 14% increase in the number of respondents sending campaigns at least once a month. Q. On average, how often do you conduct marketing campaigns? At least once a month 26% At least once a week 17.8% Less than once a quarter 16.1% Less than once a month 14.8% At least once a forthnight 11.5% We do not use 5.5% 4.4% Daily 4.1% 10

13 database size Q. What is the approximate size of your database? The majority of respondents (56%) have databases of less than 5000 addresses <5000 addresses adresses addresses % 24.9% 8.9% 6.3% 2.3% 1.1% As would be expected B2B databases are smaller than B2C databases. There is also a large jump in the database size of 5,000 25,000 from 16% in 2009 to 25% in Unknown % 40% 60% 80% 100% B2C B2B 11

14 Use of personalisation in marketing Personalisation and segmentation are key to getting the most out of marketing. Anticipated, relevant and timely campaigns are likely to yield the best return on investment. A significant proportion of respondents (72%) do not personalise their campaigns or only do so by name, an increase from 2009 (64%). Q. On average, what level of personalisation do you use in your marketing? Personalise by name only We do not personalise content Personalise by more than name Use dynamic content (use data to drive targeted content to specific users) 39.9% 31.6% 14.9% 8% 5.5% Interestingly, there has been an 8% decrease in the number of respondents who personalise their campaigns by dynamic content or by more than name. Closer analysis of the results also shows that marketers working in the B2B sector tend to use more personalisation in their marketing campaigns than those in B2C marketing (67% compared to 58%). This could reflect the fact that B2B marketers do more retention marketing and have better data profiles on each address. Personalise by name only We do not personalise content Personalise by more than name Use dynamic content (use data to drive targeted content to specific users) 10% 20% 30% 40% 50% B2C B2B 12

15 Personalisation in large companies 80% 70% 60% 50% 40% 30% 20% 10% 0% Some None Unknown Personalisation in medium companies 80% 70% 60% 50% 40% 30% 20% 10% 0% Some None Unknown Personalisation in small companies 80% 70% 60% 50% 40% 30% 20% 10% 0% Some None Unknown Large and small companies have maintained the same level of personalisation since However, we see a notable decrease in the level of personalisation for medium sized companies. As with the 2009 results, we see that a lack of customer data is still a challenge for marketers with 46% of them agreeing or strongly agreeing to that statement. This could be blamed for the decrease in personalisation for medium sized companies. 13

16 metrics being tracked Compared to 2009 there is a significant increase in the percentage of metrics being tracked by respondents; most notably a 16% increase in Click-through rates and a 14% increase in bounce rates. Q. What metrics do you regularly track? Click-through rates Open rate Bounce rates Unsubscribe rates Delivery rates Conversion rates Response variations by list segment 59.2% 54.1% 44.3% 42.4% 38% 26.9% 23.7% 12.3% Further analysis found that those working in B2C marketing tracked more metrics than those in B2B. Click-through rates Open rate Bounce rates Unsubscribe rates Delivery rates Conversion rates Response variations by list segment 20% 40% 60% 80% 100% B2B B2C 14

17 B2B trend Open rate 70% Click through rates Conversion rates 80% 50% 40% 30% 20% 10% 0% Response variations by list segments Click to open ratio Delivery rate Unsubscribe rates Bounce rates B2C trend Open rate 70% Click through rates Conversion rates 80% 50% 40% 30% 20% 10% 0% Response variations by list segments Click to open ratio Delivery rate Unsubscribe rates Bounce rates As previously stated we have seen a 16% increase since 2009 in the number of respondents using an outsourced marketing solution. This would explain the consistent increase in the number of metrics being tracked since 2008 for B2B and B2C. 15

18 Average open rates The 2009 survey showed that 38% of respondents did not know what their open rate was. There has only been a slight improvement this year with 32% of respondents saying they did not know the open rate of their campaigns. Q. On average, what overall open rates do you get from your mailings? 21-30% 11-20% 31-40% 51+% 41-50% 0-10% 32.8% 20.2% 13.9% 12% 8.8% 6.3% 6% Average Open rates 0-10% 11-20% 21-30% 31-40% 41-50% 51+% 10% 20% 30% 40% B2B B2C Analysis also shows that there is an 8% increase in the 21-30% open rate since 2009 with B2C marketers enjoying much larger open-rates in this category than their B2B counterparts.however in the 31-51% + category, the B2B sector shows greater open rates compared with the B2C sector. 16

19 Average click through rates Measurement of click-through rates shows a steady improvement in this year s survey compared to last year. In 2011, we saw a drop in the percentage of respondents who did not know what their click-through rates were. (36% in 2011, 49% in 2009 and 58% in 2008) On average, what overall click through rates do you get from your mailings? 6-10% 3-4% 21% % 11-15% 0-2% 35.6% 15.4% 12.8% 12.2% 9.6% 9.3% 5.1% Average click through rates by industry 0-2% 3-5% 6-10% 11-15% 16-20% 21+% 10% 20% 30% 40% B2B B2C Measurement of click-through rates shows a steady improvement in this year s survey compared to In the 2011 survey, we saw a drop in the percentage of respondents who did not know what their click-through rates were, (36% in 2011, 49% in 2009 and 58% in 2008). 17

20 Budgets allocated to Respondents were asked to describe their marketing spend. The majority of respondents (48%) spend less than 5% of their marketing budget on marketing. What percentage of your marketing budget do you allocate to marketing? 0-2% 3-5% 6-10% 11-15% 21% % 32.5% 23.7% 15.8% 12% 7.6% 5% 3.5% Compared to 2009, there is a slight increase in marketing spend on marketing, especially in the 6-15% range. This increase, although slight suggests that marketers value the importance and effectiveness of marketing securing a good return on investment despite a backdrop of tough economic circumstances. % Marketing spend on , by year 2011 % Marketing spend by company size 60% 50% % 50% Large Medium Small 40% 40% 30% 30% 20% 20% 10% 10% 0% 0-2% 3-5% 6-10% 11-15% 16-20% 21%+ 0% 0-2% 3-5% 6-10% 11-15% 16-20% 21%+ Further analysis of the survey results also shows us that both small and large organisations are increasing their marketing spend on marketing compared with medium sized organisations who have decreased their spend. 18

21 Expected change in expenditure When asked how their marketing expenditure would change over the next 12 months, the vast majority (88%) said their expenditure would either increase (40%) or stay the stay the same (48%). There was also a drop in the number of marketers who said their budget would decrease which would suggest that despite such touch economic circumstances, marketers trust the ROI potential of marketing. How do you expect your organisation s expenditure on to change in the next 12 months? Stay the same Increase Decrease 48% 39.8% 11% 1.3% 2% Stay the same 11% Increase Decrease 47% 40% 60% 50% Large Medium Small 40% 30% 20% 10% 0% Increase Stay the same Decrease 19

22 Where budgets will come from A large percentage of marketers expect their marketing budget increase to come from New budget (17%), followed by Print/press advertising budget (16%) and Direct mail (9%). Where do you expect this increase in budget to come from? We do not expect our expenditure to increase From new budget From print/press advertising budget From direct mail budget From TV, radio, cinema budget From mobile/sms budget From Door-to-door budget From field marketing budget From inserts budget From outdoor budget From interactive TV budget 29.1% 21.5% 17.3% 15.6% 8.9% 3% 0.8% 0.8% 0.8% 0.4% 0.4% 0% 20

23 Future challenges facing marketing Similar to previous years respondents hold the same opinions regarding the challenges facing marketing. Inbox overload and spam remain the top challenges, closely followed by deliverability and unwillingness of people to opt in to new lists. Q. Thinking about the challenges currently facing marketing, please indicate whether you agree or disagree with the following statements Strongly agre Agree Neither agree or disagree Disagree Strongly disagree Recipients' inboxes are swamped and all suffers Spam is eroding trust in doesn t get the attention/ budget it deserves Deliverability is becoming more difficult Unwillingness of people to opt in to new lists 31.9% 52.4% 10.1% 5.5% 0% 30.9% 43% 14.7% 10.7% 0.7% 11.8% 45.7% 31.9% 10.5% 0% 13.6% 48.1% 26.6% 11.4% 0.3% 15.2% 45.9% 23.8% 15.2% 0% There is a lack of accountability/ measurement 8.4% 34.1% 26.6% 24.4% 6.5% It is difficult to do effective creative due to image blocking 11.3% 48.7% 22.7% 16% 1.3% A lack of customer data is holding back effectiveness 11.5% 34.4% 32.8% 19.7% 1.6% 21

24 Social media and marketing This is the first year this question has been asked and it relates to the increase in social activity seen in both the B2B and B2C sector today. It is interesting to note that there is almost a 50/50 split between respondents who use social media in their campaigns and those who do not. Q. Do you use social media in your s? Yes No 49% 51% How social media is used in marketing Here respondents were asked which areas of social networking they use in their marketing campaigns. Q. If you use social networking in your s, how do you use it? We include a link to our Facebook page We include a link to our Twitter page We include a link to our Linkedin paage We include a link to other social network platforms Readers can share with their Facebook page We have a subscribe box on our facebook page We feature a like button Readers can share with their Twitter page Readers can share with their Linkedin page Readers can share with other social network plarforms 81.5% 67.9% 44.4% 17.9% 17.3% 17.3% 16% 15.4% 9.9% 8.6% Analysis shows that the number 1 use of social media in marketing is to include links to their company Facebook, Twitter and LinkedIn pages. 22

25 Thank you Newsweaver in conjunction with the Marketing Institute of Ireland would like to thank every one who participated in this years Marketing Insight Report. If you have any questions about the report, please contact Newsweaver on or The Marketing Institute of Ireland on 23

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