At last month's iMedia Brand Summit in Deer Valley, Mary Ann Packo, chief client and marketing officer of research firm Millward Brown, unveiled results of a first-of-its-kind Marketing & Media Snapshot 2004 study, which was sponsored by Advertising.com in conjunction with iMedia Communications. This study analyzed decision-making trends in marketing and media, perceptions about how different marketing media perform, and spending patterns, as well as how online media are being -- or not being -- integrated into the marketing mix. Here's the transcript. You can print or download the Powerpoint presentation to follow along.
Packo: As the data person after the great Creative Awards, I think I’ll just jump right in. I’m really glad to be here with a lot of people who I’ve known over the years in the interactive field, who have emerged again.
So what we’ll be presenting is the highlights -- there’s a lot of information here and I’ll try to present it in headline fashion, so I’ll be moving pretty quickly, but you’ll be able to get access to this right after the conference as well, and these are highlights – there’s a lot more behind this.
So jumping right in, the “Marketing Media Snapshot” study -- we hope this will be the first of many -- is an industry study that was sponsored by Advertising.com, so many thanks to the folks at Advertising.com for stepping up and making this study happen in conjunction with iMedia Communications.
The goals of the research were really to understand in a snapshot way at this point in time how marketing media decisions are being made, understand perceptions about the different media, spending patterns and the integration of online into the media mix.
So the way we developed the research, there were really three phases and there’s a fourth that’s still coming down. The first -- Neil Perry did a great review of all the industry information out there, because what we didn’t want to do was go out and duplicate all the great studies that were already being undertaken. Then we conducted in-depth, one-on-one, personal interviews with the eight brands that are up on the middle screen there, many of whom are in this room; and you provided great insight in helping really shape the study and providing information about how you’re making your marketing decisions.
And the third phase of the study was a data survey online with nearly 300 marketers -- these are qualified marketers who are in charge of their marketing media budgets, either for their company, for their division or for their brand, on the client side. They’re a cross industry and they’re not interactive marketers per se, they’re marketers in general, with titles ranging from CMO to Brand Manager. So that’s the background.
Neil already filled you in on many of the results: U.S. advertising media spending [is up], online marketing’s growing, and that's all online channels -- in this study we went beyond online advertising and looked at things like online promotion, search, email, etc. They’re all growing at a bigger rate than the other major media are for many different reasons that we’ll talk about, and then marketers are all open to integrated media, although it’s easier said than done, as we’ve covered a lot through the conference.
First -- budgets. The total marketing and media budget of the marketer -- 56 percent said that their total marketing and media budgets are up this year. And the way we asked the question was, “up, down or any significant change.” So 56 percent said up in the year 2004.
When we looked a year ahead, they felt similarly, even a little bit better. Sixty percent of the marketers told us that their budgets would be up in 2005, and these are marketing and media budgets. So, good news. Even better news, the marketers with the largest budgets, the ones with $400 million-plus, felt the most optimistic for 2005. As you see on the bar there on the right hand side, 81 percent of marketers with a big budget said they expect them to increase next year, so if they’re bigger, the more they think they’ll go up.
We also looked at budget increases by major media, and what we saw was that more marketers expect to increase spending on online media than other mediums in 2004 and 2005 and the numbers you see up there are really the percent of the marketers of the 300 we interviewed; they expect to increase their spending for each medium.
What you’ll see with online, which is the greatest by far this year, 57 percent said that they’d increased their spending over 2003 in the online category. Next year, 54 percent say they will. Following online is cable television, 36 percent, then we have direct mail at 34 percent, network TV at 31 percent and then trailing behind are magazines, newspapers, radio and outdoor. So that’s how you all as marketers are saying you expect your budgets to increase.
We also then asked -- if more than one budget was going up, which one budget would grow the most as a share, or would any one budget grow the most as a share of the total? In other words, would you get a bigger share of the pie?
Thirty-three percent of the marketers said no one budget would get a bigger share of the pie. They would allocate in a similar way. But 26 percent said the one medium that would get a bigger share of the pie, that would increase the most, is online. After that, network TV, then cable TV, and if you combine those together, network TV with 13 percent and cable TV with 19 percent, that has TV at about a 20 percent share of the sample that said that’s the one medium to increase the most, to get a bigger share of the total. So really, it’s both online and TV that’s still going to be going up this year. The others are lagging a bit behind in terms of gaining mileage relative to the total pie.
We also then looked beneath online and asked questions about online in total, and what you’ll see here -- you may not be able to read it, so I’ll spell it out -- we asked, if the usage of all methods of online marketing are on the upswing, what advertising tops the list of online marketing budget items that increased the most in 2004 and will increase the most in 2005? Some thought this might be search, [but] 51 percent said that Web advertising will go up, email marketing was mentioned by 46 percent -- not that much lower -- and then online promotions, 42 percent.
But each of these individual online areas, the marketers have said would increase at a greater rate than any other medium. And interestingly, in the middle, which you probably cannot quite see, we also asked if people were using specialist online agencies, and what we found is, if the marketer was using a specialist agency, there was a greater chance that they were going to increase their budgets -- 61 percent this year, 57 percent next year. So, it’s a significantly larger increase. Because they have an online specialist agency, is that why they’re planning to spend more, or is it reverse about why they got one?
And then the last area in the budget is a five-year outlook. And this is in the online area. And we asked the marketers of the different areas, different online marketing areas; which one did they expect to grow the most over the next five years, and again, it was Web advertising at 28 percent, followed by email, search and online promotion affiliate marketing. So, that’s what you told us about the numbers.
One highlight, one insight that we observed as we were out there talking about budgets, and that we should think about as we see different forecasts and numbers out there – different people, different marketers define their budgets in different ways, and what’s included does vary. Obviously most media spending is there, but when you get into the online categories, some various areas were just not included in the total CMO’s marketing and media budgets. Sometimes the Web site, the company Web site, is included in that budget but the ecommerce site may not be there; areas like public relations, sponsorship, branded content, direct mail, they’ll support, in some companies, either clearly in the marketing and media budget and in the CMO’s purview and other times, not.
Tomorrow: Media effectiveness and marketing objectives.
