If, as Bill Hewlett said, "You can't manage what you can't measure," then it is no surprise to see that clients are opting to spend their marketing budgets in the interactive media of direct marketing -- the most measurable medium to date -- and look set to continue with the new digital dialogue.
The Quarter Four 2003 IPA Bellwether Report -- the quarterly survey of marketing budgets -- showed the most optimistic outlook for advertising expenditure since the survey began in 2000.
Bellwether's author, Chris Williamson of NTC Research, tells us: "Marketing and advertising executives are entering 2004 in the most optimistic mood since the height of the dotcom boom. It is particularly encouraging that budget increases are being driven primarily by the reality of rising profits, growth of which recently hit a four-year high, rather than just by improved business confidence."
The sharpest rises in actual spend in 2003 were recorded for direct marketing and sales promotion, with direct marketing accounting for 23 per cent of all marketing spend - a figure that looks set to rise in 2004 if forecasts prove to be correct. Internet-related spend had its best quarter since Q2 2000 and has now outperformed all other categories of marketing spend monitored by the Bellwether survey for seven consecutive quarters.
This year looks set to be the fifth consecutive year of growth for direct marketing and internet spend.
Commenting on the report's findings, Sir Martin Sorrell, the group chief executive of WPP, observed that: "Where the UK seems to be different is that most, if not all, of the current growth is coming from non-media areas such as direct, internet and interactive - the functions that are more easily measurable and quantifiable."
Measurement and accountability have been watchwords of direct marketing since Lester Wunderman invented the term more than 30 years ago. We have now arrived at a multichannel direct response environment which offers better measurement than ever before, and it is interesting to find that web media response results are infinitely easier to track than traditional direct mail.
The convergence of digital and direct has been referred to as multichannel digital dialogue. Considering the simultaneous convergence of brand and response, we now have the capability for a full one-to-one brand digital dialogue.
Providing we allow it to flourish, all is healthy and blossoming in the direct and digital landscape. Well, partly.
Increased interactivity is empowering marketers but it is also empowering customers and I think we must always be sensitive to that fact. Eighty per cent of households have a mobile phone. According to N-Vision, the mobile telephone market is close to saturation. Look at the extraordinary explosion in text messaging - a medium that some people say was invented by accident. Some accident. Sixteen billion text messages were sent in 2003. We are witnessing parallel growth rates and, though not quite so fast, broadband growth is also expected to be exponential year on year. Clearly an incredibly exciting prospect for clients' businesses.
However, the "because it's there" argument may compel people to climb mountains. But should it apply to marketers to send out their messages using these new, much broader but also more measurable platforms?
The dangers of abuse of interactive media by marketers are obvious, given their intrusive nature. The Privacy Act came into force in December 2003 and Europe has further directives in the pipeline. We are approaching the age of permission for data and consent for communication. The digital marketers have built this into their code of practice with the support of the internet service providers. Direct mail has yet to make this step in self-regulation.
Companies are going to have to behave whether they like it or not. We are in the era of the triple bottom line. Yes, we have economic targets to achieve as companies but we operate in environmental and societal paradigms.
These three factors are increasingly going to be the measures against which companies are assessed and benchmarked and the consumer -- the customer -- is driving these as well as everybody else. This interactivity is not only empowering marketers but also their customers.
Customers know more about companies and are voting with their feet if they don't like them. I would suggest to you that the dm industry is far from immune to this increased consumer activism and I think we all have to be aware of our own triple bottom line. We have to be aware of the increasing customer emphasis on social responsibility and I think we have to look at what we do in that context.
We are in the era of permission and trust: brand and response together, push, pull and an experiential way of dealing with people in the context of our brands. Interactivity is the given. We do need some holistic brand values, and we need to align the internal and external to take a 360-degree view of the brand and, clearly, brands need a complete set of manners or behaviours to deliver their brand promises. People who look at the problem in this way are probably the people who can deliver the new marketing model. I think that agencies who think along these lines -- and clients who do the same -- will win out in the end.
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