Survey: Marketing Technology Spending to Rise

More advertisers are turning to technology to save money and to track their campaigns, according to a new report by Forrester Research and the Association of National Advertisers.

A recent survey by Forrester of the New York-based ANA’s membership — who represent the major U.S. advertisers — indicated that 47 percent plan to spend more than $750,000 this year on developing, licensing or subscribing to marketing applications, including e-mail, CRM, campaign management and online ad serving.

The biggest expected spenders include companies in the technology, healthcare, and travel industries, Cambridge, Mass.-based Forrester said.

The reasons for the advertising industry’s increased interest in technology that automates and tracks marketing stem from the growing demands placed on marketers to quantify results eked out with shrinking budgets. The survey revealed that 83 percent of ANA members found it difficult to measure the effectiveness of campaigns across different media — but 81 percent also agreed that technology could be useful in solving the problem.

“In this competitive environment, marketers want to improve the efficiency of their advertising,” said ANA Senior Vice President Barbara Bacci Mirque. “Our survey revealed that more companies will increase spending on marketing technology than plan to increase their advertising budgets next year.”

Indeed, about 52 percent of ANA members surveyed said they plan to spend more on marketing technology during 2002 than they did a year ago, while only 45 percent say the same for general advertising expenditures.

Approximately 19 percent of the participants, however, said they planned to reduce marketing technology investments, while 35 percent said the same for advertising expenditures.

Forrester also said that most of the ANA members surveyed favored licensing software to handle many of their marketing technology needs, as opposed to outsourcing to their ad agencies or to ASPs. That was especially true for e-mail, in which 43 percent of respondents said they favored using software over ASPs (20 percent) or agencies (14 percent). An additional 15 percent said they developed software themselves instead of licensing or outsourcing.

The survey underscores the reasons that many online and cross-channel marketing technology vendors have been deploying new tools to calculate return on investment. Ad serving plays including DoubleClick and Avenue A’s Atlas DMT have signed partnerships and begun offering tools to track campaign ROI, while site analytics players like WebSideStory, Coremetrics, NetIQ and Keylime have all rolled out enhancements to their products designed to similarly capitalize on the growing demand.

“More data, processing power, and analytical tools have emerged that allow marketers to monitor actual consumer behavior, not just attitudes,” said Forrester Senior Analyst Jim Nail, the chief author of the study. “These tools also enable marketers to track effectiveness of media, promotion, and advertising programs, and stick only to initiatives with proven results.”