Tuesday, June 20, 2006

Execs Unhappy with Marketing, Moving Spend Online

Execs Unhappy with Marketing, Moving Spend Online

Chart: http://www.marketingvox.com/uploads/blackfriars2.jpg

Marketing research consultants Blackfriars Communications today released its Marketing Category Indices for 12 types of marketing spending, indicating that spending is moving to online advertising, which grew to 15 percent of overall marketing spend. Spending on traditional advertising accounted for 19 percent of budgets. Blackfriars also set its Blackfriars Marketing Index at 146 for the second quarter of 2006, indicating that U.S. companies expect to have spent 46 percent more on marketing in the quarter than they spent in an average quarter in 2005.

All online categories of marketing spend, including online advertising (15 percent), direct email (6 percent) and website and internet media (5 precent), together accounted for 26 percent of budgets, according to Blackfriars (see graph).

"Businesses are rethinking their marketing spending," said Carl Howe, a principal of Blackfriars. "Online spending of all types grew to more than a quarter of marketing budgets. We could see even more growth online if executives start spending the larger budgets they have planned for the second quarter."

A key finding of Blackfriar's survey of senior business executives was that discontent with marketing is growing. Almost a quarter of respondents said they are not very satisfied or not at all satisfied with their marketing efforts. Worse, the proportion of executives who are extremely satisfied or very satisfied with their marketing has fallen to 38 percent from Q1's 53 percent.

"With both spending and marketing satisfaction down from last year, we could see a pullback in marketing activity for 2006," said Howe. "Marketing accounts for about one trillion dollars of spending in the U.S. annually. If marketers slow their spending, that could hurt traditional media channels and the economy overall."

Blackfriars also set its first-quarter index of actual spending at 54, 52 points below the budgeted value from February - the lowest in two years.

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