General economic conditions continue to torment marketers as the top barrier to improved performance of their direct/digital and related marketing campaigns in Q3 2011, according to a study released in November 2011 by the Direct Marketing Association (DMA) in partnership with Winterberry Group. Data from the “Quarterly Business Review Q3 2011” indicates that survey respondents rated economic conditions a 3.5 on a scale of 1 to 5 (with 5 being the highest level of performance inhibition), up from a weighted average of 3.2 in the previous quarter. Economic conditions were rated far worse than the next barrier, a lack of or insufficient customer analytics and targeting capabilities, which fell from a score of 3 in Q2 to 2.9 this quarter. In fact, most barriers to campaign performance appear to be losing relevance: reduced marketing budgets fell to a rating of 2.6 this quarter from 3 in Q2, while reduction of internal staffing levels was only given a rating a 2.3, after having a score of 2.5 last quarter. These results are somewhat different to findings from a November 2011 survey of merchants by the e-tailing group sponsored by Bronto, which found almost 1 in 5 marketers reporting the most important factor to elevating their current marketing strategy being resources such as staffing and funding, almost 40% more respondents than the second- and third-ranked factors, customer behavior insights/CRM/data, and reporting/analytics, both at 13%.
Staffing Up Y-O-Y
The loss in relevance of the internal staffing barrier cited by digital and direct marketers this quarter is likely related to a relative absence of that problem altogether: almost 2 in 5 marketers say they have ramped up staffing compared to Q3 2010, compared to 11.8% who say that staffing has decreased year-over-year. While a smaller proportion (19.3%) say that staffing has increased relative to the previous quarter, only 5.4% say that staffing has decreased in that time period.
Suppliers paint an even more encouraging hiring picture: 43.8% say that staffing has increased in the past year, while roughly 3 in 10 say that staffing has gone up in the past quarter alone. Just 17.7% say staffing has decreased in the past year, while an even smaller proportion (11.4%) say it has decreased in the past quarter.
Search, Social Perform Best
Meanwhile, direct and digital marketers report that search and social marketing channels demonstrated the most improved ROI compared to Q2 2011, both earning a weighted average of 3.6 on a scale of 1 to 5 (with 1 representing significantly worse ROI, and 5 representing significantly better). Mobile (3.5), email (3.4), and online display/banners (3.4) also demonstrated comparatively strong bottom-line performance, while direct mail (non-catalog) and insert media returns remained stagnant, and direct response print (magazines & newspapers) ROI marginally decreased.
Digital Channels Set for Growth
Marketers are clearly paying attention to the channels that have demonstrated better returns: when asked how spending on several channels is expected to change in the next year, marketers gave mobile a leading score of 3.8 on a scale of 1 to 5 (with 5 representing the best spending growth), with place-based media/digital out-of-home (3.7), email (3.7), social (3.7) and search (3.6) all following as the top channels set for spending growth. The channels with the worst ROI performance relative to the previous quarter, insert media and direct response print, found themselves at the bottom of the list of spending plans, with scores of 3 and 2.9 respectively.
About the Data: The Quarter Business Review’s conclusions are based on results from two online surveys of DMA members, deployed in October 2011 and focused respectively on marketers and the marketing service providers that work with them to develop, launch and optimize campaigns. Altogether, the DMA received 293 usable survey replies, which included 129 marketer respondents and 164 service providers.