DMA National Client Marketing Report 2010 REPORT
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1 DMA National Client Marketing Report 2010 REPORT
2 1. Introduction Once again, the DMA Marketing Council s 2010 National Client report provides fascinating insight into the progress the marketing sector is making. As the findings of the report testify, the medium continues to evolve through refining techniques and inspired innovations. Most impressively, companies are continuing to up their investment in the channel. Nearly 90 per cent of the companies polled for the survey reported that they regard marketing as being important to their business. More than half stated that they expect to increase their marketing budget over the next 12 months, with 48 per cent saying they will be doing so by cutting back on expenditure on direct mail. The findings echo those of the EMC s Benchmarking Report for Q Approximately 90 million s per ESP were sent during December 2009, compared to just 40 million in December With budgets being slashed due to the economic downturn, marketers are increasing their focus on marketing because of its relative cost-effectiveness compared to other direct marketing channels. The medium is also highly flexible and very accountable, so its appeal increases when budgets are reduced. Thanks As I m the chair of the EMC s Benchmarking Hub, I would like to thank everyone who made this report possible. First and foremost, I would like to thank all of the client marketers who participated in the survey as well as those ESPs who, in support of research, encouraged their clients to participate. Secondly, this report, like the National Benchmarking reports, is made possible through generous time given by certain individuals who constitute the Benchmarking Hub, namely: Rob Manning (Jacob Bailey); Skip Fidura (DotAgency); Darren Moore (BT); Richard Gibson (Return Path); James Bunting (The Communicator Corporation); Matt Simons (Axciom); Steve Ledgerwood ( vision); and Lynn Hewitt of (Business Bound). Ross Caddy also deserves special acknowledgment for his tireless work in project managing the report; collecting and analysing the data; and helping to structure and write the document you are now reading. Further thanks are due to the report s author, Mark Brownlow, and to Dave Chaffey for his perspective. Final thanks should be saved for the report s sponsors: Alchemy Worx, Communicator Corp, dbg, Extravision, Profusion and Return Path. Dela Quist Chair of the EMC Benchmarking Hub 1
3 2. Executive summary Almost 90% of organisations describe marketing as important or very important to their business. Over half spend less than 10% of their marketing budget on , but a third spend 30% or more. Over half expect their marketing budget to increase. This is less than in previous surveys and attributed to broader financial constraints, previous investment and a reluctance to commit to more advanced tactics. budget increases come at the expense of a wider variety of channels than before, but particularly direct mail and print/press advertising. 52% of organisations control processes centrally, fewer than in Central control is important to ensure legal compliancy and effectively manage frequency, branding, marketing integration and tactical advances. Organisations use a less diverse range of marketing tactics than in 2009, which may be a consequence of many new users entering the field after the positive press received during the recession. Only 42% use welcome messages, which should be a must-have component of even the most basic marketing programme. Other tactics that saw notable falls in popularity include win-back campaigns, purchase confirmations, thank you messages and cart abandonment s. Organisations are thus missing out on numerous marketing opportunities. 52% of organisations still have no contact strategy for the maximum number of s a subscriber might receive each month, despite the crucial role of frequency in driving response, unsubscribes and spam complaints. B2C organisations in particular have ramped up frequency, with almost a third sending over six s a month, though they are also segmenting these campaigns more. Although deliverability is the top concern, organisations are growing increasingly worried by engagement rates particularly click and opt-out rates. This may be linked to the relative failure to employ more advanced and targeted types of . More organisations are taking the trouble to authenticate outgoing s. Almost half, for example, already support the SPF standard. However, there is a mistaken belief that authentication plays a major role in deliverability, resulting in less emphasis on the (more important) issue of sender reputation. Although list hygiene practices have become more widespread, 15% of marketers still do not remove hard bounces from their list. They risk hurting their sender reputation and delivery rates. Almost a third of organisations are not suppressing unsubscribes, risking conflict with the law and ISPs. 2
4 B2C organisations recognise the importance of trying reactivation campaigns before removing inactive addresses from a list. B2B organisations are more likely to just remove an address without attempting to recapture interest. Most organisations measure open and click rates to gauge operational success. There is, however, growing awareness of the need to measure more goal-oriented metrics, like revenue. A failure to do so is largely down to the absence of appropriate technology. Budget and internal resources are the two most commonly cited barriers to marketing success, confirming that marketers know what they would like to do, but can t get the funding to do so. The most popular traditional direct marketing partner for is direct mail, followed by database marketing and telemarketing. 73% of organisations are integrating marketing with social media and/or networks. However, responses indicate the value of such integration is in driving social success, rather than social driving sign-ups. 46% of organisations are not enjoying much success driving list growth through their websites, suggesting deficits in sign-up form placement and design. Offline address acquisition (such as through telemarketing or paper forms) are considered more successful acquisition tactics than online methods like list rental. 31% of organisations will use an ESP over the coming 12 months. The leading reasons for choosing an ESP are perceived level of deliverability, reputation, customer service, product functionality and product robustness. Price has dropped in relative importance. 3
5 3. Report Extract Much has changed in the online and economic landscape since the 2009 national client marketing survey. Two trends in particular have altered perceptions of and both involve conflicting influences on the channel as a whole and on s role within an organisation. The first is the new need for accountability. The recession drove many marketers to pay closer attention to tangible metrics of campaign success. This saw s stock rise among executives and in the media thanks to its inherent ROI and consistent ability to drive a response. By the end of 2009, UK organisations were sending record volumes of marketing 1. At the same time, this robust ability to drive response at relatively low expense also means many see no need to invest more in the channel, leading to an underappreciation of s long-term value. The second trend is the growth of the social web. The last year saw a media-led debate on whether the continued growth of social networks would impact . The is dead? argument did not itself die and remains at large, even though studies and marketers own experiences consistently show that marketing is thriving. Indeed, there is plenty of evidence to suggest that social network use 2 and the growth of smartphones 3 is actually leading to more use. So what was the net impact of these conflicting images of and marketing on the perception and management of marketing within organisations? Chart 1: How important is marketing within your business? 48% 52.8% 40.7% 34.1% Strategically Operationally 8.1% 8.9% 1.6% 2.4% 1.6% 1.6% Very important Important Neither important or unimportant Unimportant Very unimportant Almost 90% of respondents described as important or very important to their business in a strategic sense. That s slightly more than in The equivalent figure for 1 DMA (2010) The 2009 Q4 National Benchmarking Report 2 Jon Gibs (2009) Is Social Media Impacting How Much We ? NielsenWire 3 Nielsen (2010) What Americans Do Online: Social Media And Games Dominate Activity. NielsenWire 4
6 operational importance was some 87%, again up slightly on These figures put paid to any suggestion that marketing s importance is in decline. Quite the contrary. While B2C companies have always placed great value on (95% describe it as important or very important strategically), the increase in recognition comes particularly from the B2B world, where that same figure rose from 78% in 2009 to 83% in Chart 2: How important is marketing within your business, strategically? (B2B vs B2C) 57% 44% 39% 38% B2B B2C 11% 5% 3% 0% 3% 0% Very important Important Neither important or unimportant Unimportant Very unimportant 5
7 4. Report Contents 1. Introduction 3 2. Executive Summary 4 3. Organisations and budgets 6 4. Tactics Frequency and segmentation What keeps marketers awake at night? Deliverability and list hygiene Metrics Integration List building Outsourcing Conclusion Dr Dave Chaffey About the DMA About the sponsors About Mark Brownlow 46 6
8 5. Further Information This Client Survey was conducted during March, April and May 2010 via a survey that was hosted online. This was promoted on the DMA home page and via various ESPs who supported the companion report. A link to the survey was also added to some, relevant DMA members weekly newsletters and websites. Therefore, both DMA members and non-members were surveyed, and a good cross section of company types and sizes covering a range of geographic locations were reached. The survey consisted of both qualitative and quantitative question types in order to get valuable information that would be useful to both client companies using marketing and providers of marketing related products and services. Ordering copies of the full report: DMA members Members can view the full report for free Log on to the DMA Research Centre at Enter your log in details Search for Client Marketing in the keyword search box on the left hand side menu Non DMA members The National Client Marketing Report costs 500 Log on to the DMA Research Centre at Click the Purchase research link from the left hand side menu to order the report Enquiries If you have any enquiries relating to the National Client Benchmarking Report, please contact the DMA on or research@dma.org.uk 7
9 Copyright and Disclaimer The National Client Marketing 2010 Report is published by The Direct Marketing Association (UK) Ltd Copyright Direct Marketing Association. All rights reserved. No part of this publication may be reproduced, copied or transmitted in any form or by any means, or stored in a retrieval system of any nature, without the prior permission of the DMA (UK) Ltd except as permitted by the provisions of the Copyright, Designs and Patents Act 1988 and related legislation. Application for permission to reproduce all or part of the Copyright material shall be made to the DMA (UK) Ltd, DMA House, 70 Margaret Street, London, W1W 8SS. Although the greatest care has been taken in the preparation and compilation of The National Client Marketing 2010 Report, no liability or responsibility of any kind (to extent permitted by law), including responsibility for negligence is accepted by the DMA, its servants or agents. All information gathered is believed correct at September All corrections should be sent to the DMA for future editions. 8
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