Marketing spending increases or decreases as trends change—and as the GDP fluctuates, notes Bruce Biegel, senior managing director of Winterberry Group. And in some cases those changes can be surprising.
“The big surprise [in 2014] was direct mail,” Biegel said. “It had a much better year than we expected.”
Indeed, last year direct mail spending grew 2.7%—due in large part to increases in mailing and production costs. This figure wildly surpassed Winterberry Group’s prediction for 1.1% growth. As for this year’s forecast, Biegel expects costs to stay steady and projects 1% growth in 2015 to come from volume increases “for the first time in a long time.”
The big surprise in 2015 will be email, he says. Expect to see email marketing spend jump 9.7% this year—a significant surge over 2014’s 3% growth. The reason? Better personalization, Biegel asserts.
Not so surprising will be growth in spending in 2015 on display, mobile, and social; Winterberry predicts growth of 21.1%, 37.3%, and
31.5%, respectively.
Marketing-tech powers forward
The massive M&A activity of 2014 has led to an increase in campaign management platforms that support omnichannel marketing, Biegel says. There were more than 2,900 deals last year—a 30% year-over-year increase—that amounted to about $126 billion in deal value.
That doesn’t mean the marketing-tech landscape is shrinking; in fact, it’s just the opposite. “For every company getting picked off, venture capitalists are funding 10—of which two will survive. So, we’re getting continued growth,” Biegel said. “It’s not a static environment; marketing breeds innovation.” He expects to see more deals in 2015—ones with high price tags, but backed by deep due diligence.
Indeed, marketers are spoiled for choice. There are 1,876 companies and open source projects representing 43 marketing technology categories, according to Scott Brinker, who tracks the industry in his annual Marketing Technology Landscape supergraphic. But this abundance can be overwhelming.
“It’s a two-edged sword,” says Brinker, president, cofounder, and CTO of ion interactive. “On the upside: Marketers have bountiful choice, and all this competition helps drive up innovation and drive down price, while providing many opportunities for differentiating your marketing. On the downside: It’s a lot of choice.”
The playing field has, in fact, doubled since Brinker’s 2014 landscape supergraphic, he points out. Why? Innovation and demand. Brinker cites IDC’s prediction that the worldwide spend for marketing software will be $22.6 billion this year and will grow to $32.3 billion by 2018.
Another observation Brinker makes in comparing his 2014 and 2015 landscape graphics is what he calls a “dual narrative” in marketing technology. There’s consolidation, as major players including Adobe, Oracle, and Salesforce.com continue their acquisitive ways, in many cases pursuing platform strategies, he says. But there’s also diversification through a continuous launch of start-ups that is outpacing the rate of acquisition and failure combined. Additionally, what Brinker calls “marketing middleware” is emerging, aiming to improve the manageability of the ever-growing marketing stacks.
Where does all this change leave marketers? Feeling positive. According to research from Winterberry Group, 77% of marketers surveyed are confident in the growth of data-driven marketing over the coming year.
