Marketers increased their media budgets in Q4 2005 with further growth in spending projected for 2006-07 according to the ICA Survey of Marketing Budgets conducted during the last quarter of 2005. Most of the increases went into the Internet, although sales promotion and direct marketing also experienced growth. ZenithOptimedia head Sunni Boot says promotions drive immediate sales, quite possibly to bolster fourth-quarter holiday shopping, while the Internet and direct marketing also provide fast feedback. The allocation of the spending supports the trend towards accountability as well a desire for short-term gains.
Boot expects that online direct marketing is where the biggest growth in Internet marketing will be because it’s personal, direct, inexpensive, environmentally-friendly, and provides immediate feedback because it’s consumer-activated. It’s also easy to control reach, frequency, messaging, and is highly targetable.
‘Online has been naturally growing as part of mass media branding budgets – and rightly so. It has been [growing, and] for at least two years, it has been a main medium, a major medium. It does offer the accountabilities of direct marketing in the sense that you know immediately who you are reaching, and what their receptivity is to the message. We’ve been saying for quite some time that interactive media will grow exponentially, which is only natural in a world where we expect to have that (high) level of consumer control.’
More than one-third of marketers increased Internet-related spending in the last quarter of 2005 with 20-25% of marketing allocating 5% or more of their budgets to online. Direct marketing budgets were increased by 36.5% of marketers in 2005 and 36% of those surveyed says they are putting more money into direct marketing in 2006. Q4 2005 marked the fifth consecutive quarter that sales promotions spending increased. The ICA report projects that the trend will continue for 2006-07 and will see the strongest growth of all marketing categories. The ICA data indicated that of the two-thirds of the marketers surveyed who had already set their 2006-07 budgets, 52% planned overall spending increases while just 10% decreased their budgets.
