This is one of the most common questions we receive from our clients. Everyone has their perspective on this lively debate; but since numbers don’t have opinions, I thought I’d share some that were recently published in the Winterberry Group’s Outlook 2011: What to Expect in Digital and Direct Marketing.
- Marketers spent $114.6 billion on traditional media in 2010, compared to $154.4 billion for direct and digital advertising. Traditional ad spending is seen as dropped to $112.6 billion in 2011, but direct and digital expenditures will rise to $163.9 billion.
- Within the US, many traditional mediums (such as radio, magazines, outdoor advertising and newspapers) declined.
- Digital spending realized the biggest jump–8.5%–winding up at $27.7 billion.
- In 2010, marketers bumped up their direct mail spending, which increased by 3.1% to $45.2 billion.
- Direct and digital channels are making gains with overall spending on these channels is expected to rise by 6.2%, racking up to $163.9 billion in expenditures.
- In 2011, direct mail will grow by a healthy 5.8% to $47.8 billion in part due to financial services, retail and automotive marketers returning to the fray and the lack of emergency postage rate increase, according to Bruce Biegel, Managing Director at Winterberry Group.
- Among other channels, direct response broadcasting is anticipated to jump by 7.6% to $25.4 billion. Digital spending will show the largest growth–14% to $31.6 billion.
- When marketing budgets expanding, however, digital mediums are claiming most of the increases. Email, search and mobile marketing led the pack when Winterberry asked marketers which channels were capturing new spending.
- Email has staked a claim as the hub of integrated marketing efforts, Biegel says. During 2011, spending on this channel will jump 18.1% to $1.6 billion.
- Search offers the most predictable ROI; revenue generated from it is most closely related to expenditures. Local search options are drawing in small- and medium-sized business’ budgets. As such, search spending will increase by 13% to $17.6 billion.
- Spending on social media, still a nascent channel, will jump to 35.4% to $1.6 billion.
Clearly, direct mail is not in need of a defibrillator. In fact, when done well and part of a multi-channel campaign, direct mail can achieve impressive results. As Biegel points out, “[Direct mail] is not cool, but it works, which is why it came back.”
So next time you’re in a debate about the fate of direct mail, lead with the facts instead of jumping on the latest marketing bandwagon. And remember, your best bet is a combination of channels that are done well.