More marketing budget aimed at targeting, survey says

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By: Wise Marketer Staff |

Posted on August 24, 2005

More than 20% of companies now spend more than 45% of their marketing budget on 'targeted marketing' strategies, and another 40% devote 15% - 45% to the same, according to a survey conducted by CSO Insights Inc. for Harte-Hanks Inc.

According to the survey report, entitled '2005 Executive Report: Target Marketing Priorities Analysis', nearly 75% of companies plan higher investments in database management in 2005, and 60% of companies are planning to spend more on e-mail, web design and data quality initiatives. More than half plan to spend more on search-engine related marketing.

Data usage
Richard Hochhauser, president and CEO for Harte-Hanks, said: "Database and interactive marketing now lead all categories in new marketing investments. Web sites and e-mail in particular really show strength. But struggles with data quality and data management remain pervasive; there is more work to do."

The study found that 43% of respondents have a regular or constant programme to support personalisation and one-to-one marketing, and that 33% feel they are "good" or "very good" at calculating customer profitability.

Data quality
Yet more than one-third rated their database management as "poor" or "very poor", with only 12% rating their database management as "very good". When it comes to marketing database quality, 53% of respondents believe that their own customer data is at least 75% accurate, while a worrying 40% believe that less than 50% their prospect data is correct.

According to Hochhauser, disciplined planning eludes many marketing departments and companies. This conclusion is supported by the fact that more than half (58%) of the firms surveyed have at best an informal process, or no process at all, for direct marketing planning, compared to only 42% that have formal processes established.

Key concerns
Other key observations from the report included:

  • Mission critical web sites, search and e-mail:
    Among respondents, web sites and micro-sites (53%), search engine optimisation (43%) and e-mail marketing (41%) were all described as "mission critical". But wireless messaging (7%) and blogs (5%) have not yet broken through into the mainstream marketing toolbox.
  • Market research and analytics becoming priorities:
    Businesses say they want more customer insight in the form of understanding perceptions of products and services (49%), knowing reasons why customers buy and respond (49%), and knowing the impact of marketing on awareness, attitudes and intentions (49%).
  • Lists and segmentation challenge direct mail:
    The availability of the right mailing lists (66%) and the ability to mail the right segments (65%) were the most-cited challenges for postal marketing campaigns.
  • Telemarketing stays the course:
    More than half (56%) of respondents indicated that they have not shifted marketing away from outbound telemarketing, despite added government regulation.
  • Information concerns:
    Security (60%), privacy (59%), spam (56%), and data accuracy (56%) were found to be among top levels of concern for digital marketers.

CSO Insights/Harte-Hanks Target Marketing Priorities 2005
Source: 2005 Executive Report: Target Marketing Priorities Analysis; Harte-Hanks

Survey and report
A total of 281 companies participated in the survey, reflecting a cross-section of vertical markets (among the broad categories were retail, manufacturing, high-tech and services). The survey, conducted online in April and May 2005, was distributed to senior marketing executives from a combination of proprietary and commercially available sources. One in four responses represented firms with more than US$1 billion in annual revenue, with 70% being in the USA.

The report was co-authored by Jim Dickie and Barry Trailer, both partners in CSO Insights, with additional analysis being provided by market researchers from direct and targeted marketing provider Harte-Hanks. An executive summary and table of contents of the report is available for free by e-mailing your contact details to Harte-Hanks.

For additional information:
·  Visit CSO Insights at
·  Visit Harte-Hanks at