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Direct Response Marketing

DR to Outpace Brand Marketing Investments Through '07

25 Jan, 2006 Response This Week

NEW YORK- Madison Ave. may want to sit down for this, but according to a Winterbury Group study released today, direct response or “below-the-line” investments are expected to grow an at annual rate of at least 7.8 percent, as opposed to purely branded or “above-the-line” messages, which should only expect a 5.5-percent annual growth rate.

With the 2006 Super Bowl just around the corner, marketers vying for a spot during commercial break are looking at a monetary commitment of at least $2.4 million for only 30 seconds of airtime in between plays. That type of investment, without the reassurance of a positive return on investment (ROI), is becoming much too risky for corporations that would much rather have the analytics and some way of measuring their marketing efficiency.

The Winterbury Group, a leading strategic consulting firm serving the direct marketing, marketing services and marketing technology industries, highlights in its study that for the first time, there has been a significant shift in spending from purely branded messages to direct marketing messages. Interactive marketing is leading the charge in direct response marketing, especially with E-mail and online advertising, but according to the study, all DR channels are expected to grow at least 6.9 percent annually through 2007.

Winterberry Group identified seven trends specifically affecting the shift in marketing budgets: due to increased audience fragmentation, the “one size fits all” mass marketing messages are becoming increasingly scarce; growing consumer sophistication; too much “clutter” makes it much easier to ignore or simply tune out the irrelevant messages; information access allows marketers to specifically target their key demographics and information allows consumers to seek out the products they desire; the demand for quantifiable results and ROI; the proven effectiveness of mutichannel campaigns; the booming technological advances such as video-on- demand (VOD) making it easier to block out irrelevant messages and to accept the desired ones. Plus, DR allows for increased interaction between consumers and marketers.

  The study was commissioned by V12 Group, a complete provider of direct marketing services, which uses its proprietary databases and multichannel delivery model to provide measurable customer acquisition results for more than 400 clients. Other resources used in the study included secondary research from sources including the Direct Marketing Association (DMA), JupiterResearch, Universal McCann, Forrester Research, eMarketer and executive leadership in the marketing community.

“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, in a statement. “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.”

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