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Direct Marketers Optimistic for 2006, but Operational Challenges Remain

    Online News published in DMReview.com
January 10, 2006

Alterian, a global provider of database marketing and customer insight solutions, today announced the results of its annual transatlantic survey, revealing that optimism within the industry remains high for a second year running but there are still major operational challenges to be tackled. Almost 700 marketers and marketing service providers across the North American and UK direct marketing industries took part in the study, which was conducted at the end of 2005.

63 percent of respondents believe their or a client's DM expenditure is expected to increase in the next 12 months with only 5 percent saying it would decrease. This mirrors last year's survey forecast of 60 percent and 5 percent respectively. Confidence in the US was higher than the UK this year, with 70 percent expecting an increase compared with 53 percent.

Budget allocation for direct marketing was also examined with almost half (47 percent) of participants spending 500k or above. 27 percent indicated their expenditure fell into the highest budget category of 2.5 million and over, while opinions of the important 'mid-market' sector were well represented with 35 percent of respondents spending between 60,000 and 500,000.

While DM growth is expected, several significant challenges lay ahead for direct marketers. Current issues and frustrations were researched and when asked which areas presented a "DM related headache," "customer insight and analysis" was the most popular answer with 52 percent. The second most popular response was "data hygiene" with 46 percent overall, while the U.K. cited this as its biggest problem (55 percent).

Ownership of marketing technology is also a major issue with almost half (47 percent) stating that other internal departments were responsible for using technology on their behalf, while only 13 percent outsourced any process that may be assisted by technology to a service provider. But marketers realize technology's value, with 55 percent saying that "providing the opportunity to analyze, visualize and segment customer data" was the area where it lends most value to the direct marketing process. Interestingly, only 21 percent chose "campaign management and response analysis."

Respondents were also asked about legislative issues, with only a third (34 percent) saying they had "a full understanding of current and anticipated data legislation and best practices" coupled with only 6 percent outsourcing this area to a marketing service provider.

Technical awareness and maximizing return on IT investment were also high on the agenda. Almost half (47 percent) said that even though there is access to a variety of technologies within the marketing department they are not being used to best advantage. This could be due to a lack of appropriate tools for marketers or a shortage of skills in the marketing department - an indication that many organizations aren't calling on experts to assist them with technology-related processes, The worst offenders are the U.K. (57 percent versus 39 percent in the U.S.). However, well over a third (37 percent) believed their marketing department was extremely technically aware, suggesting that many marketers are becoming proficient in how technology can support their need to operate in a more scientific way. This reflects the sentiment that marketers are beginning to become more hands on with technology and software applications as they develop the need to operate in a more scientific way.

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For more information on related topics visit the following related portals...
CRM and Customer Acquisition/Retention.

This piece has been brought to you by the DM Review Editorial staff.

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