How Will Marketers’ Media Spending Change in 2017?

If marketers are all about the data, then Winterberry Group’s Annual Marketing Outlook is must-have information.

 Bruce Biegel, the research and advisory firm’s senior managing director, shared that outlook—providing an in-depth review of marketers' media spending in 2016 and a preview of expected spending for 2017—at the Direct Marketing Club of New York’s annual kickoff luncheon. Winterberry Group’s outlook is based on an amalgamation of extensive research, including the firm’s own findings along with studies from sources such as Ad Age, BIA Kelsey, eMarketer, Forrester Research, IAB, IDC, JP Morgan, and PwC.

~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 2016 and 2017 in (P)Review ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~

Despite concerns of hacking and fake news, 2016 was a fruitful year for marketing and ad spending. Total U.S. advertising and marketing spending in 2016 was $347.5 billion, according to Winterberry Group—an increase of nearly 6% over 2015. Winterberry predicts that spending will increase 4.8% to $364.1B in 2017.

A breakdown of the 2016 spending total shows that

   > digital advertising/marketing grew 19.9% to $72.9B,

   > offline U.S. media/marketing increased 4.5% to $147.8B, and

   > traditional measured media/advertising inched up .8% to $125.7B.

“As new money has come in, it's come in to digital,” Biegel said, adding that “digital media spend is something we watch, but it's not as important anymore because digital is just a part of life in marketing today.”

And a big part, indeed. Digital marketing spend surpassed TV for the first time, and by about $2B—even though there was an increase in spending on TV due to the elections, Biegel noted. Conversely, the decline in newspaper spending was greater than Biegel expected. “The spending didn't go away,” he said. “It went to digital because media consumption on digital is increasing.”

Winterberry predicts total U.S. digital media spending to increase 15% in 2017, to $85B. This will include increases across all of its subcategories (see infographic at https://bit.ly/2kupsvO).

There were a few surprises among all the digital-heavy spending in 2016. Spending on teleservices continued to grow; Biegel predicted that its not going away despite the increasing use of digital. “Direct mail had a good year; it’s growing again,” he said, adding that catalog volume increases were a big part of direct mail volume growth in 2016. Biegel expects to see an increase in programmatic direct mail in 2017 and beyond, he said.

Trends in U.S measured media spending will continue in 2017 very much as they have for the past few years: magazines, newspapers, and radio will continue to see decreases, while cinema, outdoor, and television will experience modest growth (see infographic at https://bit.ly/2kupsvO). Winterberry expects overall growth of U.S measured media spending to increase .4% in 2017, to $126.2B.

U.S. one-to-one media/marketing spending is expected to grow in 2017, as well. Winterberry predicts a 3.4% increase this year, to $152.9B, representing growth in all major subcategories (see infographic at https://bit.ly/2kupsvO).

At the core of what's driving change and growth in much of today’s marketing spending is data and databases, Biegel asserted. The cost of building and maintaining databases, especially in email and DMPs, is significant. Plus, there are new types of data, so the data market itself grew about 4% last year. Data spending in the U.S. in support of direct mail, display, and email reach $11.87B in 2016, and increase of 4.1% over 2015.

Winterberry expects this growth to nearly double in 2017, predicting 8.1% overall growth in U.S. data spending in support of direct mail, display, and email—which should equate to $12.8B. This overall growth represents increases in all of the subcategories in this area (see infographic at https://bit.ly/2kupsvO).

For 2016 channel highlights, 2017 trends to watch, and an infographic comparing 2016 to 2017 projections, view the full article on MKTGinsight at https://bit.ly/2kupsvO