Marketing Industry Census 2008

Transcription

1 Marketing Industry Census 2008 In association with Adestra: March, 2008 not for distribution to nonsubscribers without written permission Other E-consultancy Reports: Marketing Platforms Buyer s Guide Marketing Request for Proposal Template File Marketing Business Case Template File Marketing Roundtable Briefing (October 2007) Marketing Industry Census

2 Table of Contents 1. About E-consultancy About Adestra Ltd (research sponsor) Executive Summary and Highlights Introduction Introduction to Industry Census by Adestra Methodology and Sample Methodology Respondent profiles Number of employees in organisation Business sector Geography Findings Approach to Marketing Fully managed service, ASP or in-house system? What is your primary Service Provider (ESP)? Use of ESP for more than just basic broadcast of Use of other ESP services Proportion of system functionality used Extent of Marketing Activity, Budget and ROI Type of s sent Target audience Number of s sent Online marketing budget split Split between acquisition and retention Annual marketing spend Return on Investment from ROI compared to other channels Time spent internally on activities practices Practices Triggers Issues and Barriers Effectiveness of marketing Barriers to effective use of Problems reaching the in-box (deliverability) Percentage of budget lost through non-delivery Level of integration Barriers to integration Priority areas for improvement Recommendations Communications Plan Strategy Your marketing operation

3 1. About E-consultancy E-consultancy, named Publisher of the Year at the 2006 AOP Awards, is an online publisher of best practice internet marketing reports, research and how-to guides. Subscribers pay from 195 per year to access the exclusive and highly practical content. E-consultancy also organises regular events, including roundtables and Supplier Showcases, where six suppliers pitch to an audience of prequalified buyers at a Central London venue. E-consultancy has 64,000 registered users and more than 145,000 unique users sessions per month (audited by ABC Electronic). It is popular among internet professionals because of its time-saving advice and insight. The company also provides a range of public and in-house training programmes, such as seminars and workshops About Adestra Ltd (research sponsor) As one of the leading UK-based marketing agencies, we are different to our competitors in two ways - our approach and our people. Underpinning this is our technology which is cutting edge, user-friendly and is relied upon by well over 3,500 marketers to support their marketing programmes. We provide ASP marketing tools and marketing bureau services to UK companies operating in the B2B and B2C marketplaces. In addition, advice and training for both tactical and strategic plans is available. Our approach to marketing is focused on working with you to deploy this technology and use it to achieve your goals and targets. We have the largest support team of any UK-based ESP. They are experts in all aspects of marketing including data, design and deliverability. Unlike most other companies, we actively recruit marketers to work alongside you. This collaborative approach ensures that Adestra and our clients work as a partnership to evolve and achieve marketing objectives. Adestra s Message Focus is a sophisticated marketing system designed for advanced marketers. Web-based, this ASP application enables users to manage all aspects of their marketing program - message design, data management, broadcasting for optimal deliverability and detailed reporting all through a secure web interface requiring no software installations. Adestra s product and corporate information is located at: 3

4 3. Executive Summary and Highlights The Marketing Census 2008, published in association with Adestra, is based on the findings of a survey of more than 600 registered E- consultancy users. Some 340 company marketers and 175 service provider / agency respondents took part in our online survey which was live in January and February Topics covered by the survey included: Approach to marketing (i.e. in-house, managed service, ASP etc) Use of services provided by service providers Extent of marketing (number of s) marketing budget Time spent internally on marketing Return on Investment / Effectiveness of marketing Barriers to success Deliverability Priorities for improvement Key findings from the second annual Marketing Census: Approach to marketing. Application Service Provider / Hosted Service is now the most commonly adopted approach to ing marketing, moving ahead of In-House System which was more prevalent than the ASP / Hosted approach in Since 2007, there has been an increase in the extent to which the whole range of ESP services is being used. Excluding basic broadcast of , the most commonly used ESP services are measurement & analytics, personalisation and segmentation. There has also been an increase in the amount of system functionality being used by marketers since last year. The proportion of company respondents using more than half the functionality has gone up from 31% last year to 38% this year. Many companies are still struggling to exploit the potential of their technology, however, with more than half (53%) believing that they are using less than half of their system s functionality. 4

5 Extent of marketing activity, budget and ROI The majority of organisations are sending less than 50,000 s per month, although 17% of companies are sending at least ten times that figure on a monthly basis. The proportion of marketers saying that their organisations send more than 1 million s per month has gone up from 11% last year to just below 13%. s share of the budget has gone up from an average of 19% last year to 23% in Search engine marketing has jumped from 19% to 24%, while website still has the biggest share (25%). On average, retention typically gets more of the marketing budget than acquisition (52% compared to 46% for acquisition). Just under a third of company respondents (30%) are spending less than 5,000 each year on marketing. Some 8% of respondents say they are spending more than 100,000 per year. Some 43% of respondents do not know what their company s return on investment (ROI) from marketing is. This figure is very high but it is a slight improvement compared to last year s survey when the equivalent figure was 47%. o A fifth of marketers say that their ROI from marketing is more than five times. is rated as the second best channel for return on investment after search engine optimisation, with almost two thirds of company respondents (63%) rating as either excellent or good. Only 6% say that is poor for ROI, with a further 27% describing it as average. When asked about the time spent on marketing, most respondents said that design and content took up the most time internally, with a third of company respondents (34%) saying that at least five hours were spent on this for a typical campaign. Design and content is closely followed by strategy and planning as the most time-consuming activity, with 21% saying that they spent at least five hours on this. 5

6 Practices Two thirds of respondents (67%) said that they are carrying out basic segmentation with a further 16% saying they are planning to institute this. One in five (20%) companies are carrying out advanced segmentation, with a further third (36%) planning this. o 57% of respondents said their organisations carried out regular list cleansing. A fifth of respondents said that they had not incorporated any list cleansing at all. o Only 14% of company respondents said that they were using behavioural targeting as part of their strategy. The triggers most commonly being leveraged within marketing are for cross-sell, up-sell and the reactivation of lapsed customers. o The results showed that many companies are not using any of these triggers. o Abandoned baskets, date notifications (e.g. birthdays), and click-through-but-no-purchase are the least used triggers, with 69%, 66% and 57% of respondents saying their organisations do not use these triggers (respectively). Issues and barriers 68% of marketers say they are not using marketing as effectively as they could, compared to only 24% who are. This is a significant improvement on last year s equivalent statistic, when only 13% of marketers said that they were using marketing as effectively as they would like. The biggest barriers to effective use (according to company respondents) are as follows: 1. Lack of budget / finances (44% viewed this as a problem) 2. Quality of database (41%) 3. Lack of skills/training (37%) 4. Lack of strategy (32%) 5. Lack of segmentation (30%) Quality of database is now a major issue for more marketers than it was in 2007 (41% compared to 35%) and has replaced lack of strategy in the top 3. Just over half of the companies surveyed (51%) said that they had experienced problems reaching recipients inboxes within the 6

7 last 12 months. Agencies report a higher figure (61%) in terms of the number of their clients struggling with this issue. Only 20% of company marketers know what percentage of their marketing budget has been lost through non-delivery. o Calculated from those who can put a figure on this, 11% of budget is lost through non-delivery on average. o Agencies estimate the proportion of budget lost through non-delivery to be even higher at 14% on average. Organisations of all sizes are still struggling to integrate with the rest of their business activity. Asked about integration with other sales & marketing activities, three quarters of respondents (67%) say there is some integration but room for improvement. o 16% of organisations surveyed said there was no integration at all, compared to 10% last year. Disconnected systems are still the biggest barrier to integration. The following areas have been flagged up by company respondents as the five biggest priorities: 1. Behavioural Response Marketing (72% cite as priority area) 2. Strategy and Campaign Planning (70%) 3. Campaign Optimisation (64%) 4. Segmentation (64%) 5. Personalisation (63%) 7

8 4. Introduction 4.1 Introduction to Industry Census by Adestra We are very proud to have commissioned the largest and most comprehensive survey into UK marketing ever undertaken. Last year s census was used all across the industry - from industry associations like the DMA through to individual marketers. This unique research formed the backbone of many articles, presentations and strategic plans. I hope that the 2008 census provides as much use to all. The census allows us to see how the industry is developing and evolving in the UK. marketing is still in its infancy. The findings show that marketers are very different in their approach, sophistication and ultimately effectiveness. UK marketers know they can get better - 68% feel they can improve their marketing. There are still many opportunities for quick wins. As an example, deliverability problems have affected 51% of respondents. For the first time, the census reports that company marketers estimate that 11% of their budget has been wasted because of it. If 221m was spent on marketing in 2007 (Source: E-consultancy), then this means that more than 24m of cash is being wasted across the whole of the UK. Focusing on reducing this wasted budget will have a large impact on campaign performance. Unfortunately, in many cases, the basics are still not in place such as methods of recording ROI. Of those who are tracking, 20% are achieving ROIs of over 5 times yet 42% still cannot track a return. This is alarming, as tracking the effectiveness of marketing can justify spend and allow you to self fund investments. Many of the problems highlighted in last year s census are still significant barriers to progress, including disconnected systems, a lack of skills & training and a lack of management buy-in. One of the main challenges identified for the first time is that marketers devote a considerable amount of time working on design for each campaign. If this time is reduced, then more time can be spent analysing, testing and making improvements. Outsourcing design, campaign production and even data management should be considered by everyone. ESP technology is a part of the jigsaw, but not all of it. 53% are using less than half of the functionality available in their tools and 69% are not using advanced techniques like cart-abandonment triggers. Marketers who partner with their ESP to use their functionality and their strategic expertise will be the most effective in At Adestra we invest heavily in our people so that they can provide expertise, guidance and input for all our clients. 8

9 The findings of the survey verify Adestra s approach. I d encourage all marketers to demand support, advice and strategic services (design, campaign management and more) from their partner. Simply deploying technology without this back-up will limit your progress. Thanks to everyone who has participated, especially to Linus at E-consultancy for leading the research. Henry Hyder-Smith Managing Director, Adestra 9

10 4.2 Methodology and Sample Methodology More than 600 registered E-consultancy users took part in our online survey between 18 January and 5 February E-consultancy and Adestra would like to thank those who took the time to complete the questionnaire. E-consultancy uses Clicktools for its online surveys. If you have any questions about this research, please contact Linus Gregoriadis at E-consultancy (linus@e-consultancy.com) Respondent profiles This survey was aimed at those involved with marketing, either for their own companies, or for an agency or Service Provider (ESP) on behalf of clients. Some 55% of respondents classified themselves as Company Marketers, with a further 28% falling into the ESP employee, agency or consultant category [Figure 1]. This amounts to 340 Company Marketers and 175 ESP / Agency respondents taking part in the survey. These figures are very similar to the Marketing Census when there were 337 Marketers and 184 ESP / Agency respondents. The ESP / Agency respondents answered slightly differently phrased questions. They were asked to answer on the basis of what the the majority of their clients were doing or what their clients were typically doing. The analysis throughout the rest of report shows the findings for the two sets of eligible respondents, either in the same charts or in separate charts where more appropriate. Figure 1 10

11 4.2.3 Number of employees in organisation Just under half of company marketers surveyed (49%) work for companies with less than 100 employees. The remaining respondents (excluding don t knows ) work for organisations with more than 100 employees. Just over a fifth of respondents (22%) are employed at organisations with more than 1,000 people. Company Figure Business sector marketers responding to this survey come from a range of sectors. The best represented verticals are Consultancy / Marketing Services, Financial Services, Retail, Publishing and Travel. Other sectors include Recruitment, IT and Legal. Figure 3 11

12 4.2.5 Geography Around 80% of the Company Marketers surveyed are UK-based, with the remainder split between the rest of Europe (7%), North America (5%) and Other (8%). The geographical spread of respondents is proportionally similar for Company Marketers and for ESP / Agency respondents, although the proportion of UK-based agency respondents is slightly smaller. Company Figure 4 ESP / Agency Figure 5 12

13 5. Findings 5.1 Approach to Marketing Fully managed service, ASP or in-house system? Figure 6 shows that an Application Service Provider / Hosted Service is now the most commonly adopted approach to ing marketing, moving ahead of In-House System which was more popular than the ASP / hosted approach approach in The proportion of companies using a Fully Managed Service has gone up from 8% to 11%, while a quarter of respondents say they use a mixture of the different approaches, compared to 30% a year ago. According to the ESP / Agency respondents [Figure 7], a quarter of their clients typically use the ASP approach, up from 21% in 2007 As was the case in the 2007 Census, a higher proportion of ESP / Agency respondents (20%) report that the approach for the majority of their clients is best described as a Fully-Managed Service, while only a very small proportion (4%) say that their clients typically use an In-House System. As explained in last year s census, the clients of Agency / ESP respondents are, by definition, more likely to be outsourcing some aspects of their activity. Company Figure 6 13

14 ESP / Agency Figure What is your primary Service Provider (ESP)? The Service Provider market is highly fragmented with 77 ESPs being used by the respondent organisations. The most widely used ESPs are Adestra, Cheetahmail, dotmailer, Reaction, Vision, Epsilon, Lyris and Pure Use of ESP for more than just basic broadcast of Some 30% of respondents are using an ESP for more than just the basic broadcast of [Figure 8]. The proportion of companies who don t use any other ESP services has dropped from 70% last year to 61%. Company Figure 8 14

15 5.1.4 Use of other ESP services Apart from basic broadcast of , the most commonly used ESP services cited by Company Marketers are: 1. Measurement & Analytics (52%) 2. Personalisation (34%) 3. Segmentation (26%) 4. Automated Campaigns (24%) 5. List Provision (22%) It can be seen that, since 2007, there has been an increase in the extent to which the whole range of ESP services is being used. Measurement & Analytics, personalisation and segmentation are still the most commonly used services. Figure Measurement & Analytics 52% 47% Personalisation 34% 33% Segmentation 26% 23% Automated campaigns 24% 17% List provision 22% 13% Strategy & Campaign planning 21% 14% Dynamic content solutions 20% 15% Campaign optimisation 19% 18% Design & copywriting 19% 18% Behavioural response marketing 12% 12% Not relevant / Don't know 21% 9% Other 5% 2% 15

16 The top five services cited by ESPs/Agencies as typically being used by their clients are as follows (see also Figure 10 below): 1. Measurement & Analytics (72%) 2. Design & Copy-writing (68%) 3. Personalisation (62%) 4. Strategy & Campaign Planning (58%) 5. Segmentation (54%) According to ESPs, Design & Copywriting is the service most likely to be employed after Broadcast of and Measurement & Analytics. However, it was seen in Figure 9 above that Design & Copywriting is much lower down the list of services most commonly used, as reported directly by in-house marketers. Figure Measurement & Analytics 72% 64% Design & copywriting 68% 66% Personalisation 62% 61% Strategy & Campaign planning 58% 60% Segmentation 54% 54% Campaign optimisation 46% 40% List provision 37% 32% Automated campaigns 36% 29% Dynamic content solutions 35% 30% Behavioural response marketing 25% 23% 16

17 5.1.5 Proportion of system functionality used It is encouraging to see that there has been an increase in the amount of system functionality being used by marketers since last year. The proportion of company respondents using more than half the functionality has gone up from 31% last year to 38% this year. Many companies are still struggling to exploit the potential of their technology, with more than half (53%) believing that they are using less than half of their system s functionality. Company Figure 11 ESP / Agency Figure 12 17

18 5.2 Extent of Marketing Activity, Budget and ROI Type of s sent Marketing s (which are sent by 92% of company respondents organisations) are the most widely broadcast type of electronic mail, followed by newsletters (69%) and then transactional s (34%). These figures are very similar to last year although there has been a small (3%) drop in the proportion of organisations sending a regular newsletter. Figure Target audience Figure 14 shows the proportion of companies sending B2B, B2C and B2E (business-to-employee) s. The percentage of B2B and B2C s sent out by companies is relatively similar at 61% and 62% respectively. However, ESPs / agencies are sending out a higher proportion of B2C s (84%) than B2B s (62%) - or perceive more targeting of a B2C audience by their clients where they are not sending s for them. Figure 14 18

19 5.2.3 Number of s sent The majority of organisations are sending less than 50,000 s per month, although 17% of companies are sending at least ten times that figure (i.e. at least half a million) on a monthly basis [Figure 15]. The proportion of marketers saying that their organisations send more than 1 million s per month has gone up from 11% last year [Figure 16] to 13%. And in line with this trend of more , there is now a smaller percentage of companies sending fewer than 10,000 s per month (34% this year compared to 40% last year). Figure 17 shows the Agency / ESP perspective on this, with the equivalent 2007 data shown in Figure 18. Company Figure for comparison Company Figure 16 19

20 ESP / Agency Figure for comparison ESP / Agency Figure 18 20

21 5.2.4 Online marketing budget split It can be seen from Figure 19 and Figure 20 that the share of digital marketing budget dedicated to has gone up from an average of 19% last year to 23% in Search engine marketing has jumped from 19% to 24%, while website still has the biggest share (25%). Company Figure for comparison Company Figure 20 ESP / Agency Figure for comparison ESP / Agency Figure 22 21

22 5.2.5 Split between acquisition and retention On average, retention typically gets more of the marketing budget than acquisition (52% compared to 46%). The split, as reported by ESP / Agency respondents [Figure 24], is almost exactly the same. Company Figure 23 ESP / Agency Figure 24 22

23 5.2.6 Annual marketing spend Almost a third of Company Marketers (30%) are spending less than 5,000 each year on marketing [Figure 25]. Some 8% of respondents say they are spending more than 100,000 per year. The proportion of companies spending more than 10,000 per year has gone up from 36% in 2007 to 39% in 2008 [Figure 26]. According to ESP / Agency respondents, there are now 52% of companies spending at least 10,000 per year, compared to 39% in 2007 [Figure 27 and Figure 28]. Company Figure for comparison Company Figure 26 23

25 5.2.7 Return on Investment from Some 42% of respondents do not know what their company s ROI from Marketing is. This figure is very high but it is a slight improvement to 2007 when the equivalent figure was 47%. As was the case last year, some respondents simply may not have had access to this information within their organisations, but the high figure indicates that there is a worryingly large proportion of companies who do not measure how effective their marketing investment is. Excluding those respondents who don t know what their ROI is, more than half of Company Marketers (51%) say that their ROI from is at least 300%. [Figure 29]. A fifth of marketers say that their ROI from marketing is more than five times. What is your ROI from Marketing? (Excluding don t knows ) Figure 29 Less than 1x: 18% 1-2x: 31% 3x: 17% 4x: 10% 5x: 4% More than 5x: 20% 25

26 Company Figure for comparison Company Figure 31 26

28 ROI compared to other channels is rated as the second best channel for return on investment after search engine optimisation [Figure 34], with almost two thirds of company respondents (63%) rating as either excellent or good. Only 6% say that is poor for ROI, with a further 27% describing it as average. Search engine optimisation (SEO) is the top-rated channel for ROI 31% say that it is excellent and 33% say that it is good. The ROI from is rated by company respondents as being better than for paid search, direct marketing, affiliate marketing, online display advertising and mobile marketing. The proportion of ESP / Agency respondents rating as either excellent or good (82%) is even higher and a very close second place to SEO [Figure 35]. Company Figure 34 28

29 ESP / Agency Figure 35 29

30 5.2.9 Time spent internally on activities When asked about the time spent on marketing, most respondents said that design & content took up the most time internally, with a third of company respondents (34%) saying that at least five hours was spent on this for a typical campaign. Design and Content is closely followed by strategy and planning as the most time-consuming activity, with 21% saying that they spent at least five hours on this per campaign [Figure 36]. The mean column on Figure 36 shows that optimisation eats up the least internal time (of those activities listed). Company Figure 36 30

31 5.3 Practices Practices Figure 37 shows the extent to which companies are adhering to various practices, some of which can be described as essential activities and others which are still important but more likely to sit in the nice-to-have category. Two thirds of respondents (67%) said that they are carrying out basic segmentation with a further 16% saying they are planning to institute this. A fifth of respondents (20%) say they are carrying out advanced segmentation but more than a third (36%) say they are planning this. After basic segmentation, the next most commonly adopted practice is regular list cleansing, which 57% of respondents say they are carrying out. Worryingly, a fifth of respondents said that they had not incorporated any list cleansing at all. Behavioural targeting (based on web activity) is the practice least being used by companies (only 14%). Half of respondents say they are not doing this or even planning it. Just over a quarter of respondents (27%) are using transactional s for marketing, with a further 22% planning this. Figure 38 shows the exact percentages of company respondents who are using, planning to use, or not using these practices. Figure 39 shows the corresponding data for agency respondents. Company Figure 37 31

32 Company Figure 38 ESP / Agency Figure 39 32

33 5.3.2 Triggers The triggers most commonly being leveraged within marketing are for selling complementary products (cross-sell), up-sell and the reactivation of lapsed customers. The results showed that many companies are not using any of these triggers. Abandoned baskets, date notifications (e.g. birthdays), and clickthrough-but-no-purchase are the least used triggers, with 69%, 66% and 57% of respondents (respectively) saying their organisation do not use these triggers. Figure 41 shows the equivalent data for ESP / agency respondents. Company Figure 40 33

34 ESP / Agency Figure 41 34

35 5.4 Issues and Barriers Effectiveness of marketing 68% of marketers say they are not using marketing as effectively as they could, compared to only 24% who are [Figure 42]. This is a significant improvement on last year s equivalent statistic, when only 13% of marketers said that they were using marketing as effectively as they would like. When this is broken down into retention and acquisition [also Figure 42], the percentages are similar although there are fewer marketers who say that they are using as effectively as possible for acquisition (16% compared to 25% for retention). The company respondent results closely mirror the opinions of ESPs /Agencies themselves, as 70% of these respondents said that their clients were not making effective use of marketing [Figure 43]. Company Figure 42 ESP / Agency Figure 43 35

36 5.4.2 Barriers to effective use of The biggest barriers to effective use (according to Company Marketers) are as follows: 1. Lack of budget / finances (44% viewed this as a problem) 2. Quality of database (41%) 3. Lack of skills & training (37%) 4. Lack of strategy (32%) 5. Lack of segmentation (30%) Quality of database (i.e. the lack of quality) is now a major issue for more marketers than it was in 2007 (41% compared to 35%) and has replaced lack of strategy in the top three. Given the evident problems caused by a poor-quality database, it is surprising that list / data quality is not in the top five priority areas for improvement (see Section below). It was seen earlier that a fifth of companies had not incorporated regular list cleansing as an practice. Figure 45 shows the exact percentages for company respondents highlighting these issues as barriers in the 2008 census. Figure 44 Methodology note: respondents could check multiple options 36

37 Company Figure 45 Methodology note: respondents could check multiple options According to ESPs/Agencies, the biggest barriers are: Lack of skills/training (55%) (57%) 2. Lack of strategy (53%) (60%) Joint 3 Lack of budget/finances (44%) (45%) Joint 3 Quality of database (44%) (42%) 5. Lack of senior management buy-in (40%) (36%) Many of the same causes are given by both sets of respondents, though in a different order. However, agencies (40%) are more likely to cite lack of senior management buy-in as a major barrier to effective use (compared to 18% of company respondents). Lack of skills / training continues to be a major problem for many organisations, particularly those without access to any external assistance. As was the case last year, ESPs / Agencies also think that lack of strategy is a bigger issue, relative to the other factors, than company marketers. Encouragingly, the percentage of ESPs / Agencies respondents who regard lack of strategy as a problem has decreased from 60% to 53%. Figure 46 and Figure 47 shows the exact percentages for ESP /Agencies for this year s and last year s surveys (respectively). 37

38 ESP / Agency Figure 46 Methodology note: respondents could check multiple options ESP / Agency Figure for comparison Methodology note: respondents could check multiple options 38

39 5.4.3 Problems reaching the in-box (deliverability) Just over half of the companies surveyed (51%) said that they had experienced problems reaching recipients inboxes within the last 12 months [Figure 48]. Agencies report an even higher figure (61%) in terms of the number of their clients struggling with this issue [Figure 49]. Company Figure 48 ESP / Agency Figure 49 39

40 5.4.4 Percentage of budget lost through non-delivery Only 20% of company respondents know what percentage of their marketing budget has been lost through non-delivery. This compares to 28% of ESPs / Agency respondents who say their clients typically know what the percentage is [Figure 52]. Calculated from those who can put a figure on this, 11% of budget is lost through non-delivery on average, according to company respondents [Figure 51]. Agencies estimate the proportion of budget lost through non-delivery to be even higher at 14% on average [Figure 53]. Company Figure 50 Company Figure 51 What percentage of your marketing budget has been lost through non-delivery of in the last 12 months? Average 10.59% Standard Deviation

41 Agency Figure 52 Agency Figure 53 In respect to your clients, typically what percentage of their marketing budget has been lost through non-delivery of in the last 12 months? Average 14.10% Standard Deviation 10.76% 41

42 5.4.5 Level of integration Organisations of all sizes are still evidently struggling to integrate with the rest of their business activity. Asked about integration with other sales & marketing activities, three quarters of respondents (67%) say there is some integration but room for improvement. It is worth noting that 16% of organisations surveyed said there was no integration at all, compared to 10% last year. Only 9% of agencies say that their clients marketing activities are typically fully integrated with their sales and marketing activities. Company Figure 54 ESP / Agency Figure 55 42

43 5.4.6 Barriers to integration Disconnected systems are still the biggest barrier to integration, with just under half of company respondents reporting this as an issue. According to company respondents, the four biggest reasons for lack of integration are: 1. Disconnected systems and technology (49%) 2. Lack of budget / finances (36%) 3. Lack of skills & training (34%) 4. Organisational culture (33%) The proportion of respondents citing disconnected systems as an issue is almost the same as last year, but there has been a decrease in the proportion of respondents citing lack of budget, lack of skills & training, organisational culture and lack of senior management buy-in as significant issues. Company Figure 56 Methodology note: respondents could check multiple options 43

44 The findings for ESPs / Agency respondents are similar to the company respondents data (see also Figure 57 below): 1. Disconnected systems / technologies (51%) 2. Lack of budget / finances (45%) 2. Lack of skills & training (45%) 4. Organisation culture (35%) Better technology, which can enable easier integration, can help companies to improve in this respect but investment will only occur if there is recognition of the importance of addressing this issue at a senior level within organisations. These issues are often a symptom of organisational culture which is perceived to be a problem by 33% of in-house marketers and 35% of Agency / ESP respondents. Figure 57 44

45 5.4.7 Priority areas for improvement The following areas have been flagged up by company respondents as the five biggest priorities [Figure 58]: 1. Behavioural response marketing (72% cite as priority area) 2. Strategy and campaign planning (70%) 3. Campaign optimisation (64%) 4. Segmentation (64%) 5. Personalisation (63%) Figure 58 The full figures for company respondents, for both 2008 and 2007, are shown in Figure 59 and Figure 60 below. As observed earlier, given that database quality is the second biggest barrier to effective marketing, it is surprising that list / data quality is not higher up the list of priorities. It was also noted earlier that there is still a significant proportion of organisations (20%) who are not regularly cleansing their data. Those areas which most company marketers deem to be least in need of improvement (because they are already working well) are: 1. Deliverability (60% say fine as is ) 2. Design & copywriting (58%) 3. Automated campaigns (44%) 4. Measurement and analytics (42%) 5. List/data quality (39%) 45

46 It is striking that 60% of company marketers say that deliverability is fine as it is when more than half of companies surveyed said that they had experienced problems reaching recipients inboxes in the past year and when an average of 11% of budget is lost through non-delivery. The relative lack of importance attached to deliverability reflects the lack of awareness around this issue. It was also seen earlier that only 20% of company respondents know what percentage of their marketing budget has been lost through non-delivery. ESPs/Agency respondents cite similar top four priority areas, with strategy & campaign planning top of the agenda for them. These respondents put list data / data quality higher up the priority list. 1. Strategy & campaign planning (75%) 2. Segmentation (70%) 3. Behavioural response marketing (69%) 4. Campaign optimisation (67%) 5. List data / data quality (62%) The full figures for ESP / Agency respondents, for both 2008 and 2007, are shown in Figure 61 and Figure 62 below. Please note that in last year s survey respondents were able to distinguish between high priority and medium priority. 46

47 Company Figure for comparison Company Figure 60 47

48 ESP / Agency Figure 61 ESP / Agency Figure for comparison 48

49 6. Recommendations Overall, the key message coming through from this year s census is that the marketing industry is making progress. More is being invested, more ROI is being tracked and more marketers are pursuing strategies based on relevance and sound permission policies. However, not every marketer is making the same amount of progress, and the recommendations below are as valid for SMEs to multinational corporates alike: 6.1 Communications Plan o Get the basics right Targeting contacts with relevant messages from an accurate database is fundamental. Without clean, complete and accurate data, you can never be relevant and targeted despite your best intentions. Only 57% of respondents carry out regular list cleansing which will be one of the reasons why many respondents have experienced problems with deliverability. Although budgets are increasing, a worrying finding is the continual lack of ROI measurement (42% still don t track it). Without accurate tracking, testing programmes cannot be measured. Without measurement, the speed at which you can improve your marketing to the level where it is achieving ROIs of over 5 times will always be slow. o Then look at advanced techniques Segmentation is moving up the agenda, but some of the more sophisticated behavioural targeting and trigger sends are still not widely adopted. Before investing in setting up these programmes ensure that your house is in order. The age-old adage of walking before you run applies. Integrating different databases and touch points across the company to create one customer view to power relevant multichannel communications is a dream that is impossible if there are problems with the accuracy of your data. Garbage in, garbage out. 49

50 6.2 Strategy o Deliverability is a larger problem than has ever been acknowledged. It is wasting 11% of UK marketers budgets. If you could deliver 10% more s into the inbox, then your corresponding open, click through and ultimately conversion rate will benefit. Conversely, problems with deliverability will hit your campaign results hard. o Analysis of which receivers (Hotmail, Yahoo! etc) are mainly on your list allows you to develop a strategy for your: Design: ensuring your messages render effectively and as you intended Sender Reputation: manage all the contributing factors to your sender reputation. receivers analyse the s they receive from you and draw conclusions about your legitimacy as a sender - have they received from you before? Have recipients ever complained about you? Has your got appropriate technical settings to authenticate the sender? Working with your ESP to build a deliverability management plan for your audience should be a priority for every marketing director. o Segmentation and a targeted approach delivers better results a multitude of research reports prove this. Data-driven communications that are relevant to the right people, at the right time should be at the forefront of every marketer s mind. o Caclulating ROI allows you to modify your marketing operation to achieve the best results possible. There are a number of ways you can monitor revenue, but don t forget to consider all the costs associated with your marketing. Identifying specific revenue - when sending targeted, personalised campaigns to a designated database, ensure the following steps are taken to help measure ROI. Ask each customer how they found out about you. Invest in web analytics to track all orders back to where they began their web session from. If you use an marketing provider, use one that can integrate with your website to track orders Monitor other inbound channels (e.g. telephone) and use discount codes / special offers / unique phone numbers to label inquiries and orders. Some database systems make this possible without massive investment. Allocate and invest time in analysing the performance of each campaign 50

51 Costs associated with marketing - this will vary based upon how your operation is set up, but consider: Broadcast costs: if using an ESP this will be transparent but if using an in-house system evaluate server costs, bandwidth and maintenance time. Technology Licences: consider any fees for using all technology involved in your campaigns. This may include: Broadcast tools Automated trigger programmes Integration processes between systems Database hosting Measurement and analytics Staff: the time spent and opportunity cost of expert staff managing tasks. Soft costs: don t also forget the risk of brand damage due to spelling mistakes, designs not rendering correctly and other commonly made mistakes. Testing plans do not need to be complicated. As long as your plans include robust measurement and statistically significant volumes, you can start making some improvements. As a priority look at: Deliverability: optimising your s to be delivered and render effectively. Segmentation: targeting relevant cells Creative: subject line, from names and layouts. Landing Pages: ensuring visitors to your website convert to your key action on your web site. Barriers to improvement: understand these factors and build plans to overcome them. Strong business cases use ROI projections which are only possible if the appropriate measurement is in place. Self finance: marketing is very measurable and can generate its own budget. When you can prove incremental returns, you can build a pot of investment cash to invest in continuous improvement plans. 6.3 Your marketing operation o There are a number of different approaches to marketing combining internal and external operations. Budgets and volumes are increasing. Reviewing how you are set up should be a key activity for every marketing director. You should review: o Your People: According to the annual Marketing Week Salary Survey, Online Marketing Managers received a 10.5% pay rise 51

52 over Experience is at a premium - retaining your expert staff should be a priority. o Their productivity: at present, one in five UK marketers are spending 5 hours on the design and content in their s for each campaign. If this time spent creating campaigns could be saved, it would free up time for either: more broadcasts (supporting a more targeted approach) or analysis to fuel tactical and strategic improvements. o Your partner: marketers need a range of support from their ESPs: Functionality: The functionality in many ESPs platforms is not being used - evaluate whether you need and wish to pay for technology that you are not using. A simple-to-use interface can save you time. Expertise and Support: consider whether you need an outlet to ask questions, seek advice and gather guidance to help progress your strategy. If your ESP is unable to provide this, consider working with a second one who has invested in this area. Things in this market are changing so keeping up-to-date permanently is a key requirement. Outsourced services: build a roster of suppliers able to manage all parts of your marketing- simply outsourcing design and campaign management could save a considerable amount of time that you could deploy elsewhere. Deliverability support: ensure your ESP works with companies to help their deliverability. Relationships with ISPs, a considerable track record, a programme for building your sender reputation and considerable monthly volumes is key. Fresh eyes: don t be afraid to bring in external consultants to look at your entire operation and a fresh viewpoint. o Do not treat Marketing in isolation: Marketing is simply one channel which when combined as part of an integrated approach has better returns: o Other channels: linking together off and online promotions o Other systems: bringing together accurate data to power personalised communications o Other teams: getting more content and involvement from teams all across the business o Other customer touch points: there are a great number of interactions that can be enhanced using marketing. 52