US marketing spend to rise

16 February 2011

NEW YORK: Marketing expenditure levels through both traditional and digital channels are set to improve this year in the US, a poll of executives has found.

Duke University's Fuqua School of Business and trade body the American Marketing Association polled 421 senior marketers.

Using a 100-point scale, participants awarded the contemporary economic situation 63.3 points, measured against 55.6 points in similar research published in August 2010.

Concerning the revenue prospects for their own company, respondents supplied an average 73.2 points, up on 66.7 points in the last round of analysis.

More specifically, 74% of contributors believed shopper purchase volumes would increase in the next 12 months, while 59% thought established customers may acquire greater numbers of related goods.

Another 53% reported they now had a stronger capacity to retain loyal buyers, and 49% expected new category entrants to provide profitable possibilities.

The proportion of industry specialists anticipating their target audience might continue to focus on low prices fell from 56.9% in August 2010 to 48.3% in February 2011.

Such figures stood at 64% and 71.2% regarding service and reached 64.6% and 62.4% covering quality.

In contrast, innovation saw an uptick of over six percentage points, lodging 34%, trust leapt by nearly three points to 60.7%, and brand attributes gained more than six points, hitting 25.5%.

In identifying the factors supporting current strategies, 56.8% of the panel cited company leadership, 53.1% mentioned an "opportunity to leverage brands" and 43.9% referenced price-sensitive consumers.

However, developing existing relationships was by far the leading motivator in this area, yielding 81.3%.

When discussing marketing budgets for the year, interviewees pegged the normal projected lift at 6.7%.

Traditional media expenditure is set to expand 2.4%, while the resources behind introducing new products grow 8.2% and spending on brand-building jumps 9.1%, the same total as customer relationship management.

The funding dedicated to web-based initiatives is in line to deliver the largest growth, rising 12.1% in the coming year.

Approximately 8% of budgets will go to marketing research and intelligence, with 4.7% allocated to marketing consulting, 8.8% to enhancing knowledge, 8.1% to consolidating information and 5.6% to training.

The typical executive revealed sales increased by 4% in the year prior to the survey, when market share levels grew 2.5%, and marketing payback rose 2.7%.

Customer acquisition scores surged 3.4%, retention rates improved 2.7% and brand value climbed 5.3%, and the short term goals surrounding these metrics are around two percentage points higher in almost all cases.

At present, social media takes 5.6% of communications outlay, an amount forecast to attain 9.8% in the next 12 months, and 18.1% in five years time.

Less favourably, 42% of the sample agreed the integration of schemes utilising sites like Twitter and Facebook with overall marketing strategies was "below average", and only 11% said such efforts had been "very effective".

Teams working on Web 2.0 platforms generally consist of roughly five employees, and a majority of staff taking responsibility for this field are drawn from marketing departments.

Consumer-facing organisations most frequently outsource some duties here, as more than four people from external partners offer assistance.

Apple, Bank of America, FedEx, IBM and General Electric were among the firms argued to be demonstrating best practice in terms of their overarching marketing activity, the report added.

Data sourced from Duke University; additional content by Warc staff