2011 Marketing Benchmark Report

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1 EXCERPT Special Rate Sponsor: Marketing Benchmark Report Practical instructions to generate, New Research and Insights for qualify and nurture new business Accelerating Performance leads based on proven, real-life marketing Note: This is an authorized excerpt from the full Marketing Sherpa Marketing Benchmark Report. To download the entire Report, go to: Sherpastore.com/2011 MarketingBMR1 or call

2 2011 Marketing Benchmark Report New Research and Insights for Accelerating Performance Lead Author Sergio Balegno, Director of Research Contributing Authors Jen Doyle, Senior Research Analyst Jeffrey Rice, Research Analyst Production Editor Brad Bortone, Reporter David Kirkpatrick, Reporter Marketing Benchmark Report US $447 / ISBN: Copyright 2010 by MarketingSherpa LLC All rights reserved. No part of this report may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, faxing, ing, posting online or by any information storage and retrieval system, without written permission from the Publisher. To purchase additional copies of this report, please visit Yes, bulk discounts are available for multiple copies. Contact: Customer Service MarketingSherpa LLC +1 (877) (outside US, call ) 499 Main Street Warren, RI USA i Copyright MarketingSherpa LLC. It is forbidden to copy this report in any manner. For permissions contact For more copies, visit

3 TABLE OF CONTENTS Table of Contents... ii Executive Summary... 2 New Research and Insights for Accelerating Performance... 2 Research highlight 1. marketing maturity a key indicator of success... 3 Three Phases of Marketing Maturity... 3 Chart: Half of all organizations stuck between Trial Phase and Strategic Phase of maturity... 3 Research highlight 2. Perception of ROI drives marketing investment... 4 Chart: How organizations perceive marketing ROI at budget time, by maturity phase... 4 Research highlight 3. Facing significant obstacles to marketing success... 5 Chart: Most significant challenges to marketing effectiveness, by primary channel... 5 Research highlight 4. Top tactics for delivering relevant content... 6 Chart: Three dimensions of relevancy tactics - effectiveness, difficulty and use... 6 Research highlight 5. Trends in deliverability... 7 Chart: Deliverability improvements offset by continued challenges... 7 Research highlight 6. Metrics that matter most... 8 Chart: marketing metrics tracked by percentage of organizations tracking them... 8 Chapter 1. The State of Marketing... 9 Facing significant new obstacles to marketing success Chart: The significance of challenges to marketing effectiveness Chart: Most significant challenges to marketing effectiveness, by primary channel Chart: Most significant challenges to marketing effectiveness, by organization size Chart: Most significant challenges to marketing effectiveness, by maturity phase Marketer insights on their most difficult marketing challenges What marketers are really trying to achieve Chart: The importance of marketing objectives Chart: Most important marketing objectives, by primary channel Chart: Most important marketing objectives, by organization size Chart: Most important marketing objectives, by maturity phase Marketer insights on their most important objectives for the coming year Objectives marketers are achieving most effectively Chart: The effectiveness of marketing at achieving objectives Chart: Objectives marketing achieves most effectively, by primary channel Chart: Objectives marketing achieves most effectively, by organization size Chart: Objectives marketing achieves most effectively, by maturity phase marketing maturity a key indicator of success Three Phases of Marketing Maturity Chart: Half of organizations between Trial and Strategic phases of marketing maturity Chart: Organizations in each phase of marketing maturity, by primary channel ii

4 Chart: Organizations in each phase of marketing maturity, by organization size Chapter 2. Budgets and Bottomlines The perception of ROI drives marketing investment Chart: marketing ROI a reality for more than a quarter of organizations Chart: How organizations perceive marketing ROI at budget time, by primary channel Chart: How organizations perceive marketing ROI at budget time, by organization size Chart: How organizations perceive marketing ROI at budget time, by maturity phase A method for quantifying ROI Chart: Organizations with a method for quantifying marketing ROI are in the minority Chart: Organizations with a method for quantifying marketing ROI, by primary channel Chart: Marketers with a method for quantifying marketing ROI, by organization size Chart: Marketers with a method for quantifying marketing ROI, by maturity phase marketing ROI benchmarks Chart: marketing ROI as percentage as reported by majority of respondents Chart: marketing ROI as percentage, by primary channel The changing marketing budget landscape Chart: Organizations increasing and decreasing marketing budgets - the impact on tactics Chart: Net change (organizations increasing minus decreasing budgets), by primary channel Chart: Net change (organizations increasing minus decreasing budgets), by organization size. 44 Chart: Net change (organizations increasing minus decreasing budgets), by maturity phase Chart: Marketing budgets don't include staffing costs for majority of organizations Online s share of the marketing budget Chart: Share of marketing budget allocated to online marketing by majority of organizations Chart: Share of marketing budget allocated to online marketing, by primary channel Chart: Share of marketing budget allocated to online marketing, by organization size Chart: Share of marketing budget allocated to online marketing, by maturity phase s share of the online marketing budget Chart: Share of online budget allocated to marketing by majority of organizations Chart: Share of online marketing budget allocated to marketing, by primary channel Chart: Share of online marketing budget allocated to marketing, by organization size Chart: Share of online marketing budget allocated to marketing, by maturity phase Substantial marketing budget increases projected for Chart: Extent of changes to marketing budgets in the coming year Chart: Extent of changes to marketing budgets in the coming year, by primary channel Chart: Extent of changes to marketing budgets in the coming year, by organization size.. 57 Chart: Extent of changes to marketing budgets in the coming year, by maturity phase Chapter 3. Getting Relevant by Being Personal Top tactics for delivering relevant content Chart: Three dimensions of relevancy tactics - effectiveness, difficulty and use Relevancy tactics used Chart: Tactics organizations are using to improve relevancy Chart: Tactics used to improve relevancy, by primary channel iii

5 Chart: Tactics used to improve relevancy, by organization size Chart: Tactics used to improve relevancy, by maturity phase The time, effort and expense required of relevancy tactics Chart: Relevancy improvement tactics - degree of difficulty Chart: Relevancy improvement tactics rated difficult, by primary channel Chart: Relevancy improvement tactics rated difficult, by organization size Chart: Relevancy improvement tactics rated difficult, by maturity phase The effectiveness of relevancy tactics Chart: Relevancy improvement tactics - level of effectiveness Chart: Relevancy improvement tactics rated very effective, by primary channel Chart: Relevancy improvement tactics rated very effective, by organization size Chart: Relevancy improvement tactics rated very effective, by maturity phase Marketer insights on the most effective relevancy and personalization tactics Satisfying subscriber preferences Chart: Satisfying subscriber preferences starts with collecting data Chart: Organizations collecting and using subscriber preference data, by primary channel Chart: Organizations collecting and using subscriber preference data, by organization size Chart: Organizations collecting and using subscriber preference data, by maturity phase What it takes to personalize Chart: Data collected for personalization goes beyond subscriber name Chart: Collecting and using subscriber personalization data, by primary channel Chart: Collecting and using subscriber personalization data, by organization size Chart: Collecting and using subscriber personalization data, by maturity phase Case briefing: Personalization tactics increase conversions Chapter 4. Driving List Growth Top tactics for increasing subscriber lists Chart: Three dimensions of list growth tactics - effectiveness, difficulty and use list growth tactics used Chart: Tactics organizations are using to grow lists Chart: Tactics used to drive list growth, by primary channel Chart: Tactics used to drive list growth, by organization size Chart: Tactics used to drive list growth, by maturity phase The time, effort and expense required of list growth tactics Chart: list growth tactics - degree of difficulty Chart: list growth tactics rated difficult, by primary channel Chart: list growth tactics rated difficult, by organization size Chart: list growth tactics rated difficult, by maturity phase The effectiveness of list growth tactics Chart: list growth tactics - level of effectiveness Chart: list growth tactics rated very effective, by primary channel Chart: list growth tactics rated very effective, by organization size Chart: list growth tactics rated very effective, by maturity phase iv

6 Marketer insights on their most effective list growth tactics Social media as a list growth tactic Chart: Organizations using limited number of social sharing buttons in campaigns Chart: Social sharing buttons used in campaigns, by primary channel Chart: Social sharing buttons used in campaigns, by organization size Chart: Social sharing buttons used in campaigns, by maturity phase Trends in list growth Chart: list growth continues positive trend during the past year Chart: list growth trend, by primary channel Chart: list growth trend, by organization size Chart: list growth trend, by maturity phase Case briefing: Solutions and providers for sending house list Chart: Advanced solutions and service providers the top choice among marketers Chart: Type of solution or provider used, by primary channel Chart: Type of solution or provider used, by organization size Chart: Type of solution or provider used, by maturity phase Chapter 5. Making it Into the Inbox Top tactics for improving deliverability Chart: Three dimensions of deliverability tactics - effectiveness, difficulty and use Deliverability tactics used Chart: Improving deliverability starts with removing inactive subscribers Chart: Tactics used to improve deliverability, by primary channel Chart: Tactics used to improve deliverability, by organization size Chart: Tactics used to improve deliverability, by maturity phase The time, effort and expense required of deliverability tactics Chart: Deliverability improvement tactics - degree of difficulty Chart: Deliverability improvement tactics rated difficult, by primary channel Chart: Deliverability improvement tactics rated difficult, by organization size Chart: Deliverability improvement tactics rated difficult, by maturity phase The effectiveness of deliverability tactics Chart: Deliverability improvement tactics - level of effectiveness Chart: Deliverability improvement tactics rated very effective, by primary channel Chart: Deliverability improvement tactics rated very effective, by organization size Chart: Deliverability improvement tactics rated very effective, by maturity phase Trends in deliverability issues Chart: Deliverability improvements offset by continued challenges Marketer insights on the state of deliverability and tactics for improving it Chapter 6. Metrics that Matter Most Measuring marketing performance Chart: marketing metrics tracked by percentage of organizations Chart: marketing metrics tracked, by primary channel v

7 Chart: marketing metrics tracked, by organization size Chart: marketing metrics tracked, by maturity phase A year of change in key performance metrics Chart: Organizations seeing measurable changes in response rates Chart: Net change (increases minus decreases) in response rates, by primary channel Chart: Net change (increases minus decreases in response rates), by organization size Chart: Net change (increases minus decreases in response rates), by maturity phase Marketer insights on using metrics to improve performance How marketers measure s delivered Chart: How marketers calculate 'Delivery Rate' Chart: 'Delivery Rate' defined, by primary channel Chart: 'Delivery Rate' defined, by organization size Chart: 'Delivery Rate' defined, by maturity phase How marketers measure s opened Chart: Calculating 'Open Rate' Chart: 'Open Rate' defined, by primary channel Chart: 'Open Rate' defined, by organization size Chart: 'Open Rate' defined, by maturity phase How marketers measure s opened Chart: Calculating 'Click-Through Rate' Chart: 'Click-Through Rate' defined, by primary market Chart: 'Click-Through Rate' defined, by organization size Chart: 'Click-Through Rate' defined, by maturity phase How marketers measure s converted Chart: Calculating 'Post-Click Conversions' Chart: 'Post-Click Conversions' defined, by primary channel Chart: 'Post-Click Conversions' defined, by organization size Chart: 'Post-Click Conversions' defined, by maturity phase Benchmarking newsletter performance Chart: How the average newsletter campaign performs Chart: Performance rates for newsletter campaigns, by primary channel Chart: Performance rates for newsletter campaigns, by organization size Chart: Performance rates for newsletter campaigns, by maturity phase Benchmarking (other than newsletter) performance Chart: How the average campaign that is not a newsletter performs Chart: Performance rates for campaigns that are not newsletters, by primary channel Chart: Performance rates for campaigns that are not newsletters, by organization size Chart: Performance rates for campaigns that are not newsletters, by maturity phase Chapter 7. Putting to the Test Testing and optimizing marketing performance Chart: Minority of organizations routinely test campaigns Chart: Organizations routinely testing campaigns, by primary channel vi

8 Chart: Organizations routinely testing campaigns, by organization size Chart: Organizations routinely testing campaigns, by maturity phase Campaign elements tested Chart: Campaign elements routinely tested to optimize performance Chart: Campaign elements routinely tested to optimize performance, by primary channel Chart: Campaign elements routinely tested to optimize performance, by organization size Chart: Campaign elements routinely tested to optimize performance, by maturity phase Marketer insights on methods typically used to test campaigns Methodology for testing and optimization Appendix 1. Benchmark Survey Demographics Chart: Survey respondents by primary channel Chart: Survey respondents by industry sector Chart: Survey respondents by organization size Chart: Survey respondents by marketing role and decision-making authority Appendix 2. Marketing Glossary Appendix 3. Research Partner vii

9 EXECUTIVE SUMMARY NEW RESEARCH AND INSIGHTS FOR ACCELERATING PERFORMANCE has long been established as one of the hardest working tools in the marketing toolbox. Strategically, plays an important role in achieving a wide range of marketing objectives. Tactically, appears to have unlimited potential especially when integrated with emerging marketing channels like social media. As a mature tactic, performance improvements are no longer measured in quantum leaps but in incremental steps. But when multiple improvement tactics are combined, performance is accelerated. And helping you understand which marketing tactics will be most effective is the purpose of this study. For the eighth consecutive year, MarketingSherpa has conducted new research and comprehensively rewritten the Marketing Benchmark Report to provide marketers the data and insights needed to make informative marketing decisions. In this study, more than 1100 marketers shared their valuable experience about what s working (and what s not) in marketing today, to help you better understand how to accelerate performance. In addition to learning more about the state of from a strategic and tactical standpoint, you ll also gain a deeper knowledge of the following key issues from the most comprehensive study of marketing available. Benchmark Reports MarketingSherpa Benchmark Reports provide marketing executives and practitioners the comprehensive research data and insights needed to compare an organization s practices and performance against industry benchmarks, to guide strategic decisions and tactical planning. The impact of marketing maturity This study has revealed a clear correlation between the phase of an organization s marketing maturity and the effectiveness of its programs. Throughout this report, findings have been segmented by phase of maturity to demonstrate the disparity in performance of organizations in each phase. This information allows you to determine the practices and follow the lead of marketers with proven success. Three dimensional views of tactics We found that, in many cases, marketers are more likely to use tactics that are fast and easy to implement than those that are most effective. By incorporating and analyzing three sets of data from the study (effectiveness, difficulty and use) on some of marketing s most significant challenges, marketers are able to correct their course of actions to improve performance. All new metrics and benchmarks marketers wanted more data for comparing their marketing performance with similar organizations and we ve delivered. The Marketing Benchmark Report has taken a deeper dive into the metrics that matter most to marketers, and segmented this information by organization size, primary channel and phase of marketing maturity for comparative purposes. The research highlights contained in this Executive Summary section of the Marketing Benchmark Report are a very small sample of the more than 150 charts with in-depth analysis from MarketingSherpa researchers and the hundreds of insights from real-life marketers like you. 2

10 RESEARCH HIGHLIGHT 1. MARKETING MATURITY A KEY INDICATOR OF SUCCESS Throughout this report, we have segmented data by phase of marketing maturity. Each phase represents how systematic an organization is in its approach to marketing. The phase of an organization s maturity is determined by the process they use (or don t use) to plan, execute, measure and report on marketing programs. The purpose of this segmentation is to demonstrate the disparity in the performance of marketing programs by organizations in each phase of maturity, and the relationship between the phase and an organization s marketing success. Three Phases of Marketing Maturity Trial Phase Transition Phase Strategic Phase Organization does not have a process or guidelines for performing marketing. Organization has an informal process with a few guidelines they sporadically perform. Organization has a formal process with thorough guidelines they routinely perform. Chart: Half of all organizations stuck between Trial Phase and Strategic Phase of maturity We do not have a process or guidelines for performing marketing (Trial phase) 14% We have a formal process with thorough guidelines we routinely perform (Strategic phase) 37% We have an informal process with a few guidelines we sporadically perform (Transition phase) 49% Source: MarketingSherpa Marketing Benchmark Survey Methodology: Fielded Sep 2010, N=1,115 3

11 RESEARCH HIGHLIGHT 2. PERCEPTION OF ROI DRIVES MARKETING INVESTMENT How executives perceive marketing's ability to produce a return on investment will determine the investment they are willing to make. Organizations in the strategic phase of marketing maturity are about twice as likely to believe that marketing is producing a ROI as are their counterparts in the transition and trial phases. Consequently, strategic phase organizations are more than twice as likely to increase marketing budgets liberally in 2011 for continuous improvement. At the other extreme, organizations in the trial and transition phases of maturity are much more likely to believe that marketing is basically free and intend to keep it that way. These organizations are destined to get what they pay for. Chart: How organizations perceive marketing ROI at budget time, by maturity phase marketing is producing a ROI. Let's increase the budget liberally for continuous improvement. 20% 19% 38% marketing will eventually produce a ROI. Let's increase the budget but do it conservatively. 38% 41% 43% marketing is unlikely to produce a ROI. Why invest more? 6% 8% 10% Strategic phase Transition phase Trial phase marketing is basically free. Let's keep it that way. 18% 28% 32% Source: MarketingSherpa Marketing Benchmark Survey Methodology: Fielded Sep 2010, N=1,115 4

12 RESEARCH HIGHLIGHT 3. FACING SIGNIFICANT OBSTACLES TO MARKETING SUCCESS marketers continue to struggle with the challenge of delivering highly relevant content to their target audiences. Whether you are marketing to consumers, businesses or both, the more targeted your campaigns, the more content is required. Developing a sufficient amount of content is a time-intensive process that many marketers do not have the resources to produce. While relevancy will be the most significant challenge to marketing effectiveness in 2011, there is a range of second tier issues - from quantifying marketing ROI to growing lists - that are equally challenging to marketers in all channels and have been addressed in this study. Chart: Most significant challenges to marketing effectiveness, by primary channel Targeting recipients with highly relevant content 56% 68% 66% Quantifying marketing ROI 37% 44% 44% Improving deliverability 31% 41% 39% Business channel (B2B) Consumer channel (B2C) Both channels (B2B2C) Getting people to opt-in to lists 40% 46% 42% Legitimate being perceived as spam 38% 35% 36% Lack of an effective marketing strategy 33% 33% 40% Source: MarketingSherpa Marketing Benchmark Survey Methodology: Fielded Sep 2010, N=1,115 5

13 RESEARCH HIGHLIGHT 4. TOP TACTICS FOR DELIVERING RELEVANT CONTENT The popular use of an marketing tactic does not always reflect its effectiveness. We've taken a deeper dive into the analysis of tactics throughout this study to gain a better understanding. This chart incorporates three sets of data on relevancy tactics. The level of effectiveness is shown on the vertical axis while the degree of difficulty to implement the tactic is shown on the horizontal axis. The size of each sphere represents its level of usage. This chart shows, for example, that the tactic of segmenting campaigns based on behavior is used more often than automatically sending based on triggers, which is more effective and less difficult to implement. Chart: Three dimensions of relevancy tactics - effectiveness, difficulty and use 70% 60% Usage indicated by sphere size Automatically send based on triggers Segmented campaigns based on behavior 50% Level of Effectiveness 40% 30% 20% Allowed subscribers to specify preferences Dynamically personalized content Segmented campaigns based on sales cycle 10% 0% 0% 20% 40% 60% 80% 100% Degree of Difficulty Source: MarketingSherpa Marketing Benchmark Survey Methodology: Fielded Sep 2010, N=1,115 6

14 RESEARCH HIGHLIGHT 5. TRENDS IN DELIVERABILITY Making it into the inbox involves a complex set of issues and is a perennial challenge for marketers. While many organizations are experiencing measurable improvements, nearly as many are experiencing worsening conditions. The net result overall is a slight change for the better. The effectiveness of tactics used to improve deliverability varies significantly and many marketers have shared their insights in this study on what works best for them. For example, as one marketer told us, Removal of non participating subscribers has had the most influence on improving deliverability and performance rates in all aspects of marketing. In other words, get rid of the deadbeat addresses and everything improves, and the spam companies leave our alone. Chart: Deliverability improvements offset by continued challenges Measureably worsening Measureably improving Bounce-backs and undeliverable 15% 27% Missing rate (not delivered anywhere) 12% 22% Inbox placement rate 11% 21% Junk folder placement rate 18% 19% s not opened in more than 6 months 18% 18% s not clicked in more than 6 months 15% 16% -20% -10% 0% 10% 20% 30% Source: MarketingSherpa Marketing Benchmark Survey Methodology: Fielded Sep 2010, N=1,115 7

15 RESEARCH HIGHLIGHT 6. METRICS THAT MATTER MOST Measuring the performance of campaigns enables marketers to benchmark and optimize results. But which metrics are worth tracking? The vast majority of organizations track the fundamental delivery, open and click-through rates. But, as well established as these traditional metrics are, we found there is still no clear consensus on the formula used to calculate each of these metrics. The more comprehensive an program becomes, the more reliant a marketer becomes on incremental downstream metrics like post-click conversions and revenue per . These downstream metrics are essential to tracking ROI back to campaigns, and gaining the budgets necessary for continuous marketing improvements. Chart: marketing metrics tracked by percentage of organizations tracking them Click-through rate 92% Open rate 90% Delivery rate 81% Clicks per link in 51% Clicks per 51% Post-click conversion rate 44% Response by list segment 36% Revenue per 33% Social sharing rate 18% Source: MarketingSherpa Marketing Benchmark Survey Methodology: Fielded Sep 2010, N=1,115 8

16 Fax form to: (401) Order Today! Special Launch Sponsor: 2011 edition includes: 152 charts and tables 1100 surveyed marketers used Top marketing challenges for 2011 Special sections on tactics, list growth, relevancy, deliverablity, and metrics Testing and optimization methods for 2011 and much more Yes! I want to benefit from the most recent research and analysis available on marketing. I want to take advantage of the $100 savings and I know my order is risk-free because it s covered by MarketingSherap s 100% satisfaction guarantee. PDF + Print Copy ($447+ Postage & Handling) Pages: 198 Published: December 2010 ISBN: PDF Only ($397) Order Today: Sherpastore.com/2011 MarketingBMR1.html 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. 237,000 marketers read our exclusive Case Study newsletters every week, and thousands attend our Summits and Workshops on , social media, optimization and B2B 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 LLC 499 Main Street, Warren, RI, Phone: (if outside the US call ) Fax: (401) Name Title Organization Address City State/Prov Country Zip/Postal Charge my: MasterCard Visa AMEX Card# Exp. Date Print Cardholder Name Signature OR Bill Me* Check Enclosed to MarketingSherpa LLC * Billing: I understand I will not receive the Guides until payment is received Fax form to: (401)

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