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Direct marketers embrace change, but worry

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As the year comes to a close and 2013 approaches, marketers find themselves facing a radically different direct marketing scenario than in the past—along with several other concerns about the future. Powerful analytics promise to parse Big Data sets, but marketers are unsure how to tackle it. Website behavior combined with automation can serve up personalized content and offers, but the rapidly evolving technology makes choices difficult. One element that's not debatable: Social media has become solidly mainstream in providing keener insight into what is important within market segments and to individual prospects. “I often think of social media as the oldest form of advertising, which is word-of-mouth; social is just a new way of delivering it,” said Tom Haas, CMO at Siemens Corp. “With social and mobile apps, you can go directly to the customer, pinpointing where they are, what they're looking for and how you can serve up something relevant and beneficial,” Haas said. Social advertising is solidly maturing. According to media research company BIA/Kelsey, social ad revenue in the U.S. is expected to reach $9.2 billion by 2016, up from $4.6 billion this year, for a compound annual growth rate (CAGR) of 19.2%. Social ads are being driven by display, such as Facebook's Marketplace Ads and YouTube's multiple display units. Locally oriented social media advertising and social ads on mobile devices are growing fastest of all, each expected to experience a 28% CAGR through 2016. On a macro level, direct marketers remain relatively confident in the near future. According to the Direct Marketing Association's “Quarterly Business Review”—released this month and based on an online survey in October of 322 marketers—75% of respondents said they are bullish about the growth prospects of digital and direct marketing. When asked to rate their confidence in the growth of digital and direct marketing on a scale of 1 to 5 (with 1 representing low confidence and 5, high confidence), respondents gave an average score of 3.91, up slightly from 3.85 in the second quarter. Nevertheless, uncertainty lurks in the shadows. While marketers agree that good data can increase revenue driven through marketing, they've been slow to embrace new sources and types of data. According to Eric Wittlake, head of media at agency Babcock & Jenkins, Portland, Ore., marketers are uncertain about data accuracy and completeness, the cost of acquiring data and their own abilities to manage and understand it. Another concern: The looming “fiscal cliff” and its potential impact on the U.S. economy. According to a report by BtoB sibling publication Advertising Age, marketers may sharply curtail expenditures as they wait to see if President Obama and House Republicans can agree on changes to the current law mandating spending cuts and tax increases in the new year. Marketing staffing decisions also appear to be in a wait-and-see mode, according to an online survey conducted in September by direct marketing executive search company Bernhart Associates. The company's latest “Quarterly Digital and Direct Marketing Employment Report” projects fourth-quarter hiring trends and reported that 46% of the 450 companies surveyed said they plan to add staff in the final three months of the year, down from 50% in the last quarterly report issued in April. “Yes, the fiscal cliff can make people nervous,” said Jerry Bernhart, the company's principal. “But I've never had a company say they're delaying or canceling a job search because of it. If they have a need, they have a need. Bigger companies may be more concerned about this kind of thing than smaller organizations.” Bernhart said that while hiring in direct marketing has reached an uncertain phase, certain job types have risen in prominence and demand. “Marketing analytics jobs are at the top, but the demand is for analytics skills combined with business acumen,” Bernhart said. “Companies are avid to hire people who can mine the data and then make recommendations to marketers based on what the data are telling them. Marketing departments don't need propeller-heads.” For the first time, social media manager positions have appeared within the top five marketing positions sought by companies, Bernhart said. Other positions companies are seeking to fill including Web designers, email marketing managers, account managers and sales.
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