Email Lives; 'Big Data' will Die: DMCNY Speaker
By Ken Magill
Email still apparently hasn’t received the memo it’s supposed to be dead and there is a heck of a lot more marketing noise about mobile and social than there is actual spending on the channels, according to Bruce Biegel, managing director of the Winterberry Group.
“The conversation about social and mobile versus how you make money is still a lot more conversation and a lot less spend,” he said in a wide-ranging 2013 forecast speech to the Direct Marketing Club of New York in Manhattan’s Yale club last week.
“Mobile’s $4 billion and social’s another $5 billion,” he said. “That’s $9 billion in an advertising economy that’s almost $300 billion. It’s not that much money.”
Not surprisingly, spending on all digital channels rose in 2012 and is expected to continue to rise.
Email spending rose 12.5 percent to $1.8 billion in 2012 compared to 2011, according to the Winterberry Group.
At the same time, Mobile spending—including spending on mobile search and display—rose 180 percent in 2012 over 2011 to $4.1 billion, according to the Winterberry Group.
Spending on social technology and services—excluding social display and social search—rose 33.3 percent in 2012 to $2.1 billion, according to the Winterberry Group.
Search spending rose 5.1 percent in 2012 to $17.8 billion, according to the Winterberry Group.
And spending on online display advertising rose 14.7 percent in 2012 to $13.7 billion, according to the Winterberry Group.
The company forecasts email marketing spending will increase 11.1 percent this year to $2 billion and mobile spending will rise 77.1 percent to $7.2 billion.
Spending on social technology and services will go up 32.1 percent to $2.8 billion, according to the Winterberry Group.
Spending on online display advertising will rise 18.4 percent to $16.2 billion this year, according to the Winterberry Group.
And spending on search will rise 5.7 percent to $18.8 billion, according to the Winterberry Group.
Among the other topics Biegel covered is a trend he’s seen in which larger ad agencies have been acquiring smaller shops to get digital talent.
“We’ve seen a lot of consolidation to get digital talent because there’s not a lot of digital talent lying around in the marketplace these days,” he said. “If you have analytics anywhere in your career, you can get a job tomorrow.”
Biegel also touched on the topic of so-called big data, predicting the term will have run its course by 2014.
“Everybody likes the term big data … ‘we have this many zetabytes and we’re going to have that many zetabytes.’ They’re talking about every piece of business information when they throw stats like those out,” he said. “I think big data’s going to be done by the end of this year. It doesn’t mean as much to us. What we really care about is big marketing data.”
However, he said, integrating all the various data available, such as social data and set-top-box data “is a very big deal coming up. It’s multi-channel campaign integration. It’s channel optimization. It’s CRM program optimization. These are the things that we believe in ’13 and ’14 start to get a lot of traction.
“What’s holding it back?” he added. “People have no clue how to make this stuff work. It’s not that the technology is hard. It’s who owns it? Is it the database person? Is it IT? … [Data management platforms] require that you have a steering committee that crosses direct, digital database, IT etcetera in order for people to tie use cases back to business objectives to get funding. And that’s where we’re seeing a breakdown in the market. It’s those silos within the enterprise and the disconnect.”
Biegel added, though, that he knows of 20 or so companies that have overcome these challenges and are seeing results.
“We know it works. We know the ROI is there, but it’s going to take a while,” he said. “We think this ramps over ’13 and certainly into ’14,” he said.
Biegel also said he believes the daily-deal business model will have to evolve.
“What those companies have really done is aggregate massive email databases that they can use to reach customers,” he said. “But their primary monetization, which is ‘let’s go to the SMB [small and medium business] market, let’s get them to sell something to bring somebody in who will not come back unless they get a deal,’ is not necessarily good for those businesses. They’re realizing there is a lot of power in having those databases. They just have to think through what is the next way to monetize that. They’re not there yet and their stocks are showing it.”
Biegel also predicted that once Congress works though some of its current issues, privacy will be front and center again in Washington.
“We think that once they clear through their nonsense, we think they’re going to say: ‘Ah, privacy. It’s time,’” he said. “And they’re going to keep bringing new legislation to the floor. And it’s going to be a much more challenging year. We think it will be more of the back half of the year than the front half. It doesn’t mean they’ll agree on anything but we need to make a lot of noise between now and then to keep them off balance.”