Eighty-five Percent of Marketers and Service Providers Plan to Increase Online Spending in 2007, According to Alterian Survey

Email to get most attention, yet supporting data analytics often ignored

What’s the direct marketing spending priority for 2007? It’s online activities, according to Alterian’s fourth transatlantic annual survey of more than 500 direct marketers, marketing services providers and agencies. Eighty-five percent of respondents expect their online direct marketing expenditures to increase in 2007. The spending projection is the largest expected increase since the Alterian Annual Survey began in 2003. Alterian (LSE: ALN) is the leading global provider of Analytics Led Integrated Marketing software.

While online direct marketing will receive the largest investment increase, 51 percent of survey respondents also plan to boost their offline direct marketing spend in 2007. When asked about specific channel investments, 81 percent plan to increase spending on email marketing, 50 percent say they will spend more on direct mail, and 45 percent will increase their budgets for personalized landing pages. Despite the strong spending indicators for both online and offline channels, 94 percent of respondents who said they will decrease offline spending said they will increase online spending.

Email being integrated, but analysis often skipped

The 2006 survey confirms the growing emphasis on the integration of email marketing. Thirty-five percent of respondents reported that their email activity was integrated with all other channels, and 26 percent of respondents said their email is at least integrated with other online channels. Only 18 percent reported that email is still used as a standalone channel.

Despite progress on multichannel integration, an overwhelming 70 percent or respondents said they apply basic or no analysis to any of their email campaigns. Only 29 percent claim they carry out full analysis. At the service provider level, marketing services providers reported the highest percentage, at 32 percent, of those carrying out full data analysis on email campaigns. Agencies have the lowest percentage of those carrying out full analysis, at 23 percent, but reported the highest percentage, at 57 percent, of those carrying out basic analysis.

The survey revealed a correlation between the level of channel integration and analytical activity. Those with the most advanced level of online and offline integration also indicated that they are performing the most advanced levels of analysis, with 45 percent of respondents topping both these segments. Conversely, those not integrating email fully with other online or offline channels are doing the least analysis, with only 12 percent of respondents using email as a standalone channel completing full analysis of email campaigns.

Respondents cited the challenges to improving integration. According to 36 percent, the top obstacle is that online and offline activities are managed by separate departments. Thirty-two percent reported difficulty integrating email marketing activity with the customer database.

Who manages email campaigns depends on volume

While email campaigns are growing in sophistication and frequency, still about half, or 44 percent, of marketers manage their email activities in-house. Twenty-nine percent outsource email marketing to email service providers, and 15 percent send the work to agencies. Only 11 percent tap marketing services providers.

Regarding email volume, 71 percent send less than one million emails in an average month. The survey revealed that marketers are managing the largest percentage of small (less than one million emails monthly) and large (more than 10 million emails monthly) campaigns in-house, but tend to outsource mid-size campaigns (one to 10 million emails monthly), primarily to email service providers, followed by agencies and marketing services providers.

“The 2006 survey shows positive trends for the marketing industry in general, and a well defined shift in spending and activity as marketers are moving towards true integration backed by analysis and successful supplier relationships,” commented David Eldridge, Alterian’s chief executive officer. “Challenges remain, but these results certainly indicate tremendous opportunities for marketers to use email and online marketing techniques linked with traditional direct marketing tactics to establish competitive advantages and serve customers better than ever.”

The Alterian 2006 Survey polled a total of 540 marketing professionals. The annual survey, now in its fourth year, was conducted in North America and the United Kingdom in October 2006 through a dedicated Web site landing page, a hardcopy form and in-person interviews at the 2006 Direct Marketing Association Conference and Exhibition in San Francisco, Calif.

About Alterian

Alterian (LSE: ALN) is the leading global provider of software for Analytically Led Integrated Marketing – making it practical and cost effective for marketers to gain insight into their data and use this to drive an integrated marketing strategy, across multiple online and offline channels, from a single set of applications and infrastructure.

A global community of over 70 business partners, including many of the leading providers of services to marketers such as Accenture, Acxiom, Allant Group, Carlson Marketing Group, Experian, Epsilon, Donnelley Marketing, Harte-Hanks, Merkle, Ogilvy One and Euro RSCG Worldwide, deliver the Alterian software platform alongside their own value-added services. These solutions empower market leaders like Princess Cruises, General Motors, Zurich, HSBC, Starz Entertainment, Limited Too, Dell, Amnesty International and Vodafone, to drive competitive advantage through improved marketing performance and customer satisfaction.

Alterian was founded in 1997 and listed on the techMARK Index of the London Stock Exchange in 2000. With offices throughout North America and Europe, Alterian software is used in over 20 countries worldwide.