Direct Response-oriented Marketing Spend To Outpace Brand Marketing Spend Through 2007

By Irene Cherkassky, senior editor, Target Marketing

New York-based strategic consulting firm Winterberry Group has released a report measuring the shift of marketing dollars from above-the-line (ATL) marketing channels such as TV, radio and print ads to below-the-line marketing (BTL). BTL includes targeted, direct marketing efforts such as direct mail, interactive marketing, insert media, database and promotional marketing. Commissioned by BTL marketing service provider V12 Group, the report shows that from 2003 through 2007, BTL is expected to grow at 7.8 percent annually, while ATL advertising's growth is expected be approximately 5.5 percent. Led by interactive marketing--including search, e-mail and online advertising--nearly all BTL channels are projected to grow in excess of the 6.9 percent annual growth forecast for the whole industry between 2003 and 2007.

According to the report, a number of key trends account for the increased spend and focus on BTL, including:

• Changing consumer demographics decrease the influence of traditional mass-media marketing messages;
  
• Growing consumer sophistication heightens the demand for channel-agnostic communications;
  
• Widespread marketing "clutter" diminishes the impact of commercial messages that don't address specific and individually relevant consumer needs;
  
• Enhanced information availability empowers both marketers and consumers with insight that allows for precise customer targeting and intelligent purchase decisions; and
  
• Heightened client pressure to deliver quantifiable value forces marketing service providers to re-evaluate services platforms.
  

The report notes that among traditional advertising agencies, average client tenure now stands at less than 18 months per account. In a timeframe shorter than many ad campaigns themselves, marketers increasingly are deciding that these trusted strategic advisers easily can be replaced by others whose strategic creative and financial objectives better align with their own.

For bottom-line focused executives, BTL media becomes even more attractive since it offers the benefits of personalization and measurable return-on-investment, in light of the vast investment required to sustain solo ATL campaigns.

The report notes that Merrill Lynch recently announced that the industry as a whole finally has reached "neutral" status in its reliance on ATL advertising for marketing purposes--indicating that the two core marketing approaches now stand on equal footing, complementing each other--and depending on each other--to fuel successful, integrated marketing campaigns. According to Lauren Rich Fine, a Merrill Lynch analyst, agencies now "participate equally in both sectors and [are] relatively indifferent to how a client chooses to spend."

According to the study, marketers' challenge going forward is to identify the appropriate media mix for their business, one that encompasses both methods, above-the-line (for branding and identity) and below-the-line (for customer acquisition, retention and loyalty development).

The study is based on Winterberry Group data and secondary research from sources including the Direct Marketing Association, JupiterResearch, Universal McCann, Forrester Research eMarketer and executive leadership in the marketing community.

For more information, visit http://www.winterberrygroup.com.