Study Says Marketers Shifting
Toward Internet, Direct Mail

By Erin White

LONDON -- Marketers plan a long-term shift away from traditional media
advertising and toward other so-called marketing services, particularly
Internet marketing and direct mail, suggests a new study of more than
700 companies released Wednesday.

Not all marketing-services areas will benefit equally. The percentage of
overall marketing spending that marketers dedicate to sales promotion
should decline, and that devoted to public relations will remain the
same, suggests the study, produced by the University of London's London
Business School and French ad firm Havas SA.

By contrast, direct mail and interactive marketing, which includes
e-mail marketing and Web sites, look more promising. "They're more
measurable and seen as good value for money as people get better at
targeting," said Patrick Barwise, a London Business School management
and marketing professor, one of the study's authors.

The study is notable for its emphasis on total marketing spending rather
than only ad expenditures. The survey looks at spending in the world's
five biggest ad markets -- the U.S., Japan, Germany, the United Kingdom
and France -- and is based on interviews with more than 700 companies
during the summer and fall. The report also provides a detailed look at
spending plans by advertiser category group, from automobiles to

The study says media advertising, which includes television, radio,
press, posters and cinema, will account for 44.4% of marketing spending
in the five countries by 2003, down from 45.4% in 2001. Direct mail will
grow to 13.3% in 2003 from 12.8% in 2001. Interactive marketing, which
includes such tactics as e-mail marketing, Web-site design, Internet
advertising and cellphone ads, will command a 7% share in 2003, up from
6.1% in 2001, the study predicts. The role of sales promotion is set to
decline to 19.4% of the mix in 2003 from 19.8% in 2001. Public relations
and sponsorship activities will remain steady with about a 12.8% share,
according to the study.

"The shifts indicate a significant change in the way expenditure is
being used," said Alan Styler, strategy and marketing director at Havas
direct-marketing agency EHS Brann. "It's important to see them as
pointers to the mindset of the people we've researched."

The predicted strong growth in interactive marketing is somewhat
surprising, because Internet advertising has been widely criticized for
being ineffective and annoying. But the study's authors explain that
marketers now are using the Web for more than Internet ads, and they
like what they see. E-mail marketing and Web sites, for instance, have
proved to be useful tactics not only to drive sales but also to gather
information about customers, said Mr. Styler. "It's a very productive
channel in terms of learning."

Write to Erin White at [email protected]


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