Direct and digital outlook for 2012 cautiously optimistic

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Direct and digital outlook for 2012 cautiously optimistic

2012 January 12th Luncheon coverage by Christopher Hosford at B2B Magazine:
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Christopher Hosford | The new year isn't quite a month old and the prognostics for direct and digital marketing health are looking up. Search and display expenditures are rising, direct mail continues its modest rebound and hiring plans are cautiously strengthening.

"Last year, things actually were pretty good for five or six months and then it got quiet during the summer because of a bad macro environment," said Bruce Biegel, managing director at marketing consultancy Winterberry Group. He added that the economic crisis in the European Union, fear of a double-dip recession and debt-ceiling wranglings in Washington contributed to marketing uncertainties.

"Then, in the fourth quarter, things came back and the year wound up growing overall," Biegel said.

At a presentation before the Direct Marketing Club of New York this month, Biegel presented Winterberry Group analysis showing that digital channels continue to increase their share of marketing spend; that direct mail experienced 2% growth in 2011 and will grow by the same amount this year; and that marketing spend on social, search and mobile will increase significantly this year as well.

Meanwhile, companies are ushering in the new year with a surge in direct and digital marketing hiring plans. According to the latest survey of hiring decision-makers by direct marketing executive search company Bernhart Associates, 52% of companies said they plan to add to staff this quarter, up from the 40% reported in the fourth quarter of 2011. Also, the percentage of companies planning layoffs dropped to 6%, compared with 8% in the final three months of 2011.

Bernhart's "Quarterly Digital and Direct Marketing Employment Report," conducted in January, had 446 respondents.

"Many marketers didn't have a bad year in 2011, and I'm starting to see direct and digital marketing candidates getting multiple offers," said Jerry Bernhart, principal at Bernhart Associates. "People kind of know things are getting better, and this corroborates it." Bernhart said the bulk of hiring is taking place at agencies, with requests for analytics expertise in particular.

"They want people who can crunch numbers, analyze campaign results and make recommendations," he said. Bernhart said social and content marketing expertise also is in high demand.

Even as fourth quarter pay-per-click expenditures increased 22% overall from the same period a year earlier, mobile search expenditures exploded by 269% in the same period year over year, according to a report this month from ad management technology company IgnitionOne.

In addition, online ad management company Marin Software reported that mobile and tablet users accounted for 10% of all U.S. search ad clicks during the fourth quarter, with ads served to tablet devices providing higher engagement than on desktop computers, with a 37% higher click-through rate.

"Marketers know they have to be in mobile," Biegel said. But he cautioned that to date, mobile is still ruled by e-commerce, not marketing, and that marketing challenges remain in finding the right message to the right people on the right device.

"Marketers need new sets of tools and data to understand better how to use search and email across mobile devices to get relevant results," he said. "The big theme is attribution."

While things look promising for the balance of the year, caution still remains.

In the Bernhart study, 19% still anticipate a hiring freeze in the first quarter, down only slightly from 20% in the fall 2011 quarter. And Biegel noted that the traditional media world of direct mail, print and list brokerage, among other sectors, face numerous challenges.

"Marketing data is still in silos," he said. "Marketers need to connect data, partners and suppliers, and do it cross-channel. This requires a cultural change. Buying new technology is easy, but the supply chain is dying for everyone to integrate."

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