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Harte-Hanks: Marketers to increase investment in e-marketing, database management

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Three out of five companies are planning to spend more on e-mail, Web design and data quality initiatives, and more than one in two plans to increase spending on search marketing in 2005 compared with last year, according to a Web survey by CSO Insights on behalf of direct marketing company Harte-Hanks. The report, “2005 Executive Report: Target Marketing Priorities Analysis,” also points to an increase in database marketing investment.

While increased spending on Web, data quality initiatives and search marketing is not surprising, an increased investment in e-mail goes against its image as a media “problem child” because of all the issues surrounding spam.

“E-mail is the most effective and lowest-cost channel for customer retention and loyalty, and I think marketers see the opportunity to further optimize their marketing budgets through this channel,” said Richard Merrick, managing director of Harte-Hanks’ Postfuture e-mail marketing subsidiary.

E-mail marketing was cited by 72% of respondents as an important piece of the overall marketing mix, according to the report. “This channel is not viewed as an experimental channel but a serious part of the marketing mix,” Merrick said.

Spam is still perceived as a challenge, but it is becoming less of an issue for many marketers. Just over half (56%) said they are very concerned or extremely concerned about controlling spam.

“The spam problem is abating,” Merrick said. “In most cases, filters are in place now that didn’t exist two years ago.”

The increased interest in e-mail can also be tied to the growing popularity in using online statements and communications. A California software company that participated in the survey, for example, said it regularly offers clients the option to receive marketing collateral immediately through e-fulfillment. Harte-Hanks said that more than 92% of all prospects choose that option, and the software company has decreased its fulfillment costs by 38%.

“The biggest problem with e-mail in general is providing a value proposition significant enough to get someone to agree to opt-in,” Merrick said. “The value has to do with what [marketers] have to say, and how relevant it is to people and how timely it is.”

Data security and privacy were the two biggest areas of concern cited by marketers. Sixty percent of marketers are very concerned or extremely concerned about data security, and 59% were very or extremely concerned about ensuring privacy to end users.

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