Mobile Spending Leads Direct Marketing Growth

Spending on digital marketing will be led by mobile, according to the latest edition of the Direct Marketing Association's biennial report. The trade group predicts mobile direct marketing spending to grow 51 percent this year and 39 percent in 2012.

Together the DMA projects spending on digital direct marketing will hit $31.3 billion this year and $35.4 billion in 2012. The total encompasses online search and display, social networking, mobile, commercial email, and other forms of digital channels such as rich media and advergaming.

The group said digital channel expenditures will account for 21 percent of direct marketing budgets in 2012, up from 19 percent this year. The DMA's "Power of Direct Marketing" report, released yesterday, measures U.S. direct marketing activity.

Spending on social networking by direct marketers will also grow substantially this year and next, according to the report. It will reach $2.5 billion this year, growing 27.4 percent; in 2012 it will hit $3 billion, growing 19.6 percent year-over-year.

Search and display spending account for the largest portions of digital media spending by direct marketers. The channels will maintain growth, but will slow in 2012, according to the DMA. Both channels are set to rise 18.3 percent this year, with search reaching $14 billion and display $8.5 billion. Search growth will taper to around 12 percent next year, hitting $15.6 billion; display is expected to increase by 11 percent in 2012 and reach $9.5 billion.

By comparison, the Interactive Advertising Bureau reported that display ad revenues came in at $5.5 billion in the first half of this year, an increase of 27 percent over the same period of 2010. Typically, online ad spending increases in the second half of the year, suggesting the IAB and DMA may be in sync considering the IAB tracks brand advertising spend in addition to direct marketing spend.

Mobile still only makes up a sliver of the digital pie. The DMA predicts mobile spending will reach $900 million this year and hit $1.2 billion in 2012.

Meanwhile, as digital channels experience double-digit growth through 2012, traditional channels such as direct response TV and direct mail will grow at single-digit rates.