A Critical Eye on the Data

I have been peppered with data this week, especially data relating to the world of online marketing. One e-mail stood out to me because it encapsulated so many of the issues the industry is facing. In light of other data I’ve seen lately, as well as my own perspective, I have some observations I’d like to make.

As reported by MediaPost: According to Forrester Research, reported by Richard H. Levey at Directmag.com, 60 percent of marketers surveyed will increase their interactive (which generally means online interactive) budgets by shifting funds from traditional media. Direct mail was cited by 40 percent of marketers as the one being cut, outranking newspapers (35 percent), magazines (28 percent) and television (12 percent).

There is a mountain of data showing that print drives Internet traffic, and in many cases, Internet traffic would (and does) suffer without print.

Among the interactive channels, the study finds [spending on social media and mobile marketing] expanding between 2009 and 2014, with social media jumping by 34 percent on a compounded annual basis and mobile marketing increasing by 27 percent.

E-mail marketing is reported to be having a “banner year,” as well, as marketers use e-mail to “green” their marketing, embrace it as the cost-effective alternative to “low ROI” direct mail, and improve its effectiveness by linking it to other channels like search or user-generated ratings and reviews.

The Whole Picture

Now three observations from the cheap seats.

1. Don’t forget that print drives interactive budgets. There is a lot of data showing drain away from print, but this is short-sighted. There is a mountain of data showing that print drives Internet traffic, and in many cases, Internet traffic would (and does) suffer without print.

For example, in a survey of 2,251 senior executives, the “BE:USA 2008/2009: The Media Survey of the United States’ Business Elite” found that senior executives (defined as those making more than $400,000 and having a net worth—excluding real state holdings—exceeding $1.7 million) were heavily influenced to increase their Web traffic as a result of print. Nearly one in four (23 percent) was motivated to visit a marketer’s Web site as a result of a local newspaper ad. Even more—38 percent—were motivated by a magazine ad.

Then there is the classic USPS/comScore survey that found that people who receive a catalog account for a disproportionate amount of the money spent at retailers’ Web sites. In fact, shoppers who received a catalog were twice as likely to make an online purchase at the retailer’s online store. There are not isolated numbers. In fact, they are pretty typical.

In today’s economy, it’s easy to give up print for online marketing, thinking you’re getting a deal. In reality, this may not, in fact, be the case.

2. Online advertising and e-mail are claiming huge numbers, but all may not be as rosy as it sounds. Much of the online spending depends on how you figure the numbers. For example, many forecasts are based on estimates from media buyers, but Interpublic has announced a new method that calculates forecasts based on actual advertising revenues from media suppliers instead.

According to these estimates, online search will be the only major medium to expand its advertising market during 2009. In fact, Interpublic reports that, in aggregate, online ad spending will decline 2.2 percent this year, although it will grow at a CAGR of 8.4 percent over the next five years.

At the other end of the spectrum, we have reports coming out saying that e-mail is even more powerful than first thought. According to Email Insider, when you take into consideration sales that are driven by e-mail but result in visits to offline channels, e-mail’s projected ROI triples from the DMA’s estimate of $43.52 for 2009: