Commentary

Behind the Numbers: Below-the-Line Media Hits Big

Targeted channels show the strongest growth

Spending on below-the-line (BTL) media — targeted channels such as online, search, direct mail, direct response TV (DRTV), direct response print, inserts, and promotions — is growing at a faster pace than spending on more mature above-the-line (ATL) counterparts, which include television, radio, newspapers, magazines, and yellow pages.

According to “Tracking the Trends: A Comparison of Above-the-Line & Below-the-Line Expenditure Trends,” by v12 and Winterberry Group, BTL spending is projected to grow an average of 7.8 percent annually from 2003 to 2007, compared with 5.5 percent average annual growth for ATL channels, and 6.9 percent for the entire marketing and services industry. By 2007, the gap will grow wider, as ATL marketing growth slows down to 4.6 percent and overall industry growth increases to 7.3 percent, the report says.

Online spending, projected by eMarketer to reach $12.9 billion in 2005, outpaced spending in 2004 by 34 percent. By 2009, eMarketer predicts that annual online spending will reach $22.3 billion, reflecting an average annual growth rate of nearly 21 percent since 2002.

In the report, David Hallerman, eMarketer senior analyst, calls the growth a “sea change” that reflects how the Internet has become an essential element of daily life for many people. Winterberry feels the sea change applies to all direct media, including mail, which Winterberry estimates grew 7.5 percent in 2005; promotions, which grew 3.7 percent, according to Promo magazine; and e-mail marketing, which grew 31 percent, according to JupiterResearch.

The larger, more well-known Internet brands continue to capture the lion’s share of online media dollars, says Bruce Biegel, senior managing director of Winterberry Group. But as online’s share reaches between 10 to 15 percent of media budgets, that will change, and he says we’ll see more small brands with larger shares of the pie.

This shift is also fueling changes in command. BTL media agencies are beginning to gain as much control and respect as their ATL counterparts. That was shown recently when Michael Roth, chairman and CEO of Interpublic Group, appointed Howard Draft, his top direct marketing executive, to run IPG’s newly integrated Draft FCB Group. Draft earned the position over Steve Blamer, who headed traditional agency Foote Cone & Belding.

Advergaming and mobile marketing, two of the most popular emerging media platforms, will remain small for the short term, according to Biegel, who thinks that the cell phone “will be-come more important as an order vehicle than a marketing vehicle.”

In the next five years, Biegel says, Internet spending will grow to at least 15 percent of overall media spending, 5 percent higher than predictions of a few years ago, and all media will be integrated. “Broadcast will be tied into what’s online and in your mail and e-mail boxes, and marketers are going to get much better at timing all of those,” he says.

Biegel’s most profound future prediction: “Trackability and the ability to send short-distance messages with RFID [tags] are going to significantly increase. Printers are talking about liquid inks, so you won’t have to have physical tags. I think five years out, we will see much more of this. The shelf talker in the store may actually talk to you.”

 

Next story loading loading..