A new study finds the move of ad dollars to targeted, direct response marketing, including interactive, is occuring faster than expected.
The shift in marketing spend from mass media branding efforts to targeted, direct response marketing, including interactive marketing, is happening faster than some might expect, according to a new study by Winterberry Group.
"Simply stated, above-the-line marketing that utilizes generic messages to build awareness is no longer the best way to influence customer behavior," said Bruce Biegel, managing director of Winterberry Group. "Below-the-line initiatives are more successful because they stress targeted and customer-centric communications. Below-the-line also creates measurable results and ROI metrics, which are important to marketers under growing pressure to prove the value of their campaigns. We expect that this demand for quantitative results will continue to intensify for at least the next five years."
Winterberry Group found since 2003, above-the-line (ATL) spending has grown an average 5.5 percent per year, while below-the-line (BTL) spending, led by search, email and online advertising, grew 7.8 percent annually. These growth rates are expected to continue through 2007, the study predicts. The annual growth forecast for the entire industry between 2003 and 2007 was 6.9 percent.
"The biggest surprise to us was the rate of the shift," Biegel told ClickZ News. "When we started looking at the numbers, we knew that ATL was slowing, even though overall marketing spending was growing. We found ATL was falling a lot faster than expected, even though it was being propped up by cable TV spending
According to the findings, the shift from ATL to BTL spending is in part the result of changing consumer attitudes; more sophisticated consumers demand relevant messaging that engages them in a dialog, and which allows them to interact with the marketer through their preferred communication channels. At the same time, technology allows marketers to better target consumers, and to better track results and measure ROI of BTL campaigns, so agency clients and marketers' bosses are demanding such accountability.
It's also a function of media fragmentation. More channels and more diverse consumers making it harder for marketers to reach a truly mass audience, Biegel said. "There's no such thing as a consumer. Every consumer has a different attitude, a different way to reach them. Marketing messages need to be more focused, because the consumer is in control."
One way marketers are trying to reach consumers is with multi-channel marketing. Many marketers find multi-channel campaigns are more effective, and improve the performance of all channels. This has been borne out in data from the Internet Advertising Bureau that found overall sales can improve by anywhere from 7 to 34 percent, depending on channel, when multiple BTL marketing programs are used in concert.
By coordinating a direct mail drop date with in-statement ads and email, a marketer can expose consumers to the same message in multiple media. More marketers seem to be picking up on this. A recent study by the Direct Marketing Association found 42 percent of marketers sell primarily via two channels; another 40 percent use three.
A recent change in interactive marketing reflecting the maturing of the medium is that it's no longer viewed as a separate component with its own rules, said Paul Chachko, founder and CEO of BTL-focused marketing services firm V12 Group. "A couple of years ago, people used it as its own channel. We're using interactive as a component in our overall strategy."
Another sign interactive is maturing is the change from a single budget line for interactive to separate lines for search, lead-generation, email, and retention activities, Biegel said.
The report, based on Winterberry Group data and secondary research, defines ATL marketing channels as those striving to reach mass audiences with messages that reinforce brands, communicate general product information or inspire emotional response. This includes print and broadcast advertising, as well as outdoor advertising and yellow pages. BTL marketing is made up of targeted, direct marketing efforts with convenient response mechanisms and that are easy to measure. Examples include database marketing, direct mail, interactive marketing, insert media and promotional marketing.
The study was commissioned by V12 Group, a provider of below-the-line marketing services formed last year through the merger of marketing services firms Datagence, Media Solution Services and Spectra Products.
On the heels of a fantastic event in New York City, ClickZ Live is taking the fun and learning to Toronto, June 23-25. With over 15 years' experience delivering industry-leading events, ClickZ Live offers an action-packed, educationally-focused agenda covering all aspects of digital marketing. Register today!
Want to learn more? Join us at ClickZ Live San Francisco, Aug 10-12!
Educating marketers for over 15 years, ClickZ Live brings together industry thought leaders from the largest brands and agencies to deliver the most advanced, educational digital marketing agenda. Register today and save $500!
Kevin Newcomb joined ClickZ in August 2004, covering search marketing and other online marketing topics. He has been reporting on web-based businesses since 2000.
Before the bubble burst, Kevin was a marketing manager for an online computer reseller, handling copywriting, e-mail marketing, search marketing and running the affiliate program.
With a combination of real-world marketing experience and years of business journalism, Kevin brings to ClickZ a unique ability to deliver news and training materials that help online marketers do their jobs better.
Gartner Magic Quadrant for Digital Commerce
This Magic Quadrant examines leading digital commerce platforms that enable organizations to build digital commerce sites. These commerce platforms facilitate purchasing transactions over the Web, and support the creation and continuing development of an online relationship with a consumer.
Paid Search in the Mobile Era
Google reports that paid search ads are currently driving 40+ million calls per month. Cost per click is increasing, paid search budgets are growing, and mobile continues to dominate. It's time to revamp old search strategies, reimagine stale best practices, and add new layers data to your analytics.
June 10, 2015
12:00pm ET/9:00am PT