Marketers Cautiously Optimistic for 2002

DoubleClick Inc. today released the results of its Marketing Spending Index, which shows marketers to be cautiously optimistic about the growth of their media budgets for the remainder of 2002.

The study also reveals that websites have already become a critical sales channel, and a larger proportion of respondents expect web sales to increase over the next 12 months than any other sales channel.

Marketers Are Cautiously Optimistic About 2002 Budgets

While 23% of respondents expect 2002 marketing budgets to decline from 2001 levels, 27% expect them to stay the same and 50% expect them to increase. Email budgets, in particular, are expected to increase, with 61% of respondents expecting their email marketing budgets to grow over the next twelve months.

Relative to other forms of marketing, email (+17%) and online marketing (+9%), along with direct response TV (+18%) and channel marketing (+15%) are expected to see increases in budget in 2002. Traditional media including TV (-1%) print (-1.4%) and radio (-2.3%) are expected to see a small decrease in relative spending, while telemarketing (-7%), direct mail (-7%) and catalog marketing (-13%) are expected to see the largest relative decline. Online advertising was cited as the third most commonly used form of advertising (54%) behind print (86%) and direct mail (58%), and slightly ahead of TV (53%), radio (47%) and email (44%).

 Relative Growth/Decline of Marketing Budgets 
Direct response TV + 18%
Email + 17%
Channel marketing + 15%
Online marketing + 9%
TV - 1%
Print - 1.4%
Radio - 2.3%
Telemarketing - 7%
Direct mail - 7%
Catalog marketing - 13%

DoubleClick says that the relative growth in online and email marketing within the marketing mix suggests an increased confidence among marketers in these marketing channels. The growth in the share of the marketing mix also reflects the increased sophistication in online and email creative, optimization and targeting, the growing number of studies that demonstrate the effectiveness of online and email marketing, and the growing audience that is reached by marketing online and by email.

Websites Recognized as a Critical Revenue Channel

According to the survey, websites account for 12% of respondents' sales, the third largest revenue source behind retail (30%) and a direct sales force (28%). Additional sales channels include resellers (11%), telephone (9%) and catalogs (7%). In addition, three quarters of respondents (74%) expect revenue generated online to further increase during the next 12 months.

Websites were also described as the second most pervasive sales channel with more than 55% of respondents selling their products or services online. Almost 60% use a direct sales force and 48% use retail stores. Other channels include resellers (37%), telephone (37%) and catalogs (31%).

"Point-of-sale has always been a highly effective form of advertising, and as companies' revenue from their websites increases, online and email marketing are inevitably becoming larger components of the marketing mix," said Susan Sachatello, DoubleClick's Chief Marketing Officer. "Leading marketers are embracing these channels and leveraging them alongside traditional means of reaching their customers. The expected increase in share of budget for online and email marketing augers well for the online community once overall marketing spending levels increase again."

The Right Tool for the Right Objective

Email marketing ranked consistently high by respondents for achieving all marketing objectives, including lead generation (65%), information dissemination (55%), retention (55%), building awareness (55%), generating immediate sales (53%) and upselling (51%). Respondents use online advertising primarily for building brand awareness (75%) and acquiring new leads (59%). It is used to a lesser degree for driving immediate sales (43%), retention (40%), providing company information (38%) and upselling to existing customers (28%).

Only 56% of companies have tools in place for measuring the effectiveness of online advertising, while 60% have tools for measuring email. Sixty-five percent of marketers have tools to measure their TV and promotions. Nevertheless, email measurement tools are perceived to be as effective as those of television (4.46 as compared to 4.45 out of a scale of 5). Although online advertising tools rank slightly lower in effectiveness, it ranked above those used for trade shows and print (4.33 as compared to 4.25 and 4.24 out of 5).

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