Direct marketing spend in the UK and North America looks set to rise over the next 12 months, with results from a new survey from Alterian, showing 63% of respondents believe that direct marketing spend will increase over the next 12 months.
Looking at the UK, Alterian found that confidence was higher among marketers, with 70% expecting an increase in direct marketing budgets, compared to 53% the same time last year.
The survey also found that in terms of budget allocation for direct marketing, 47% of participants admitted to spending £500k or more, while 27% indicated their expenditure fell into the highest budget category of £2.5 million and over. Turning to the ‘mid-market’ sector, 35% of respondents reported spending between £60k and £500k on the medium.
Despite the projected growth of direct marketing in 2006, Alterian identified several significant challenges for direct marketers. When researching current issues and frustrations within the industry, 52% of respondents revealed that ‘consumer insight and analysis’ was the most popular answer when asked which areas presented a ‘direct marketing related headache’.
Commenting on the report’s findings, David Eldridge, chief executive officer of Alterian, said: “Marketing departments are looking to technology to improve effectiveness of campaigns. Many marketers are also struggling with data quality issues and extracting value from their data they can actually use to drive strategy.”
Survey participants were also asked about legislative issues, with only a third saying they had a ‘full understanding of current and anticipated data legislation and best practices’ coupled with just 6% outsourcing this area to a marketing service provider.
This finding concerned Alterian, with Eldridge saying: “This presents rather a worrying picture with legislation set to become more complex this year and challenges such as identity theft looming large. Marketers need to make sure they remain informed and protected and strongly consider partnering with an expert in this area.
Looking to the rest of this year, Eldridge added: “It’s encouraging to see the industry is so buoyant with the majority of respondents expecting an increase in direct marketing spend, but as highlighted in the survey, technology and legislative issues remain unsolved for many.”
The latest IPA Bellwether report is due to be released tomorrow. Marketers are hopeful that it is more optimistic than the last one, which revealed that marketing budgets for Q3 of 2005 were cut for the second quarter running, dropping at the fastest rate since the Iraq war in 2003 (see Q3 2005 Bellwether: Marketing Budgets Continue To Drop).
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