Online DM Spending Up, Offline Down: Survey

Marketers intent on following the money need look no further than their computer screens. According to a new survey from marketing service and software provider Alterian, 45% of DMers spent at least $500,000 in 2007 for online efforts, compared with just over one-third in 2006.

That spending increase has to come from somewhere, and that somewhere is likely from offline efforts. Among DMers, 30% spent less than $100,000 on offline campaigns, up from 23% in 2006 and 18% in 2005.

The move to digital marketing should continue: 84% of those surveyed anticipate their online spend will increase during the next 12 months, with only 1% foreseeing a decline.

Part of this may reflect the relative youth of the online space, but part may also reflect marketers going where the customers are. Only 44% of all marketers said their offline spending would increase, compared with 52% in 2006 who expected it to rise. The number expecting decreases was 11%, identical with 2006.

Aside from boosting their online spending, two-thirds of all marketers said they were allocating additional resources (such as headcount, man-hours or research) to database and analytical functions. Forty-two percent are putting more resources toward digital efforts, and 39% are investing more in process and operational functions.

Survey respondents are also embracing specialists for certain marketing functions. Forty-five percent outsource creative design to agencies, while another 41% rely on vendors for e-mail campaign execution. Nearly four in 10 (37%) turn to list companies to manage their files, and 35% use outside database and analytics firms. Seventeen percent have outsourced their campaign management functions.

But as marketing departments embrace a wider variety of channels, their ability to coordinate all their functions through a single management system has dwindled. Seventy percent of all marketers use at least three marketing applications to accomplish their responsibilities, and 20% rely on seven or more.

Alterian’s survey was conducted during October and November 2007 through online questionnaires and in-person interviews at direct marketing trade shows. The study incorporates responses from 852 marketing professionals.