I’ve just read the following headlines with interest: ‘The latest IPA/BDO Bellwether report announced growing optimism and confidence alongside increased marketing budgets for 2010 in comparison to last year. Effective marketing & advertising spend will be essential in 2010.’

This is certainly borne out by our experiences at Alchemis during the latter part of 2009 and into 2010. We started seeing an increase in the number of marketing budgets being released around August last year and we experienced a 70% increase in the number of wins for our clients in the second half of the year compared to the first half.

The key phrase for me is ‘effective marketing & advertising’ and those of our clients (typically small-medium sized agencies) who recognise this and who are prepared to develop their proposition to reflect this need are more likely to get in front of key decision makers with budgets.

The signs are that this upward trend will continue, although we remain cautious and work closely with our clients to develop propositions that are most effective in this climate and to focus our activity on those markets where we see the most opportunities.

I’ve read numerous articles in both the marketing and national press this week about how social media marketing is powering its way up the slippery ladder of “brand medium of choice” at the cost of direct marketing. Some of the stats mentioned in the articles may give great cause for concern to people working in “traditional” direct marketing – like 66% of marketers will be investing in social media marketing activity over the next year and as many as 40% said they would be using their DM budget to do so, cutting spending on DM by a fifth.

Now, if anybody read my previous blog about CRM, you may have surmised that I can be a bit picky when it comes to data integrity. So, a few things I should point out about these stats, before any traditional DM agencies start to beat their chests in self-pity whilst wailing “we’re all doomed”.

Firstly, all these articles appear to have stemmed from the same source (the Alterian 7th annual survey).

Secondly, this survey questioned 1,068 professionals worldwide, but of these only 42% were actually marketers (the rest were agencies, service providers, systems integrators and “others”).

Thirdly, only 36% of respondents were from Europe as opposed to 62% from North America and 2% from Asia.

So, I would imagine from this that the real sample size of British marketing decision makers who are actually in a budget holding position is unlikely to be more than a few hundred.

That said, there’s no denying that social media is a very attractive option for marketers. It’s relatively cheap, leaves less of a carbon footprint in these environmentally-conscious times and campaigns can be created and turned around so quickly that marketers have the ability to act almost “up to the minute” with current trends and events.

However, it’s not necessarily going to reach all demographics across the board. The weighting is far heavier at the younger end of the scale so for the foreseeable future the “older” generations (and I’m not just talking about pensioners here) will still be a very safe bet for traditional direct marketers.

On top of this, an ever-growing number of DM agencies have integrated digital and social media marketing offers as well now which, when considering the vast amounts of personal data gleaned from online campaigns, raises opportunities to tailor highly personalised specific direct marketing campaigns to potential customers with a higher degree of accuracy than ever before. Don’t forget, traditional direct marketing doesn’t just have to be in the form of a letter – I’ve heard of all manner of objects being sent in order to elicit a response (including a crowbar on one B2B campaign).

This blog is obviously focused on the reports that DM could lose revenue, but most meetings we attend across all disciplines talk about social media. Is it also the death knell for traditional PR agencies or advertising agencies? Social media is no longer the jewel in the crown of just the digital agency fraternity. It has and will become a part of all marketing be it PR, DM or even research and as such agencies need to develop their offers in that area.

It’s true that some traditional direct marketers may have to raise their game and “work smarter” to keep it an effective medium. But those who do will reap the rewards.

What are your predictions for the future of direct or social media marketing?

“Pitches plummet across all media” (Campaign 8th January)

The AAR publishes its annual summary of pitch opportunities in 2009 and predictions for 2010. Key statements include:

• Number of new business pitches down by 21%
• Advertising reviews down by 20%
• Digital pitches suffered a 33% decline
• 24% less DM reviews
• Full service media pitches down by 24%

It could be argued that this is tantamount to scaremongering. I’m sure this is not the case, but on face value these are concerning figures and offer little optimism for recovery in 2010. However, if a step back is taken, previous figures are considered and everything is overlaid with common sense, there are certainly reasons to be optimistic for the right kind of agencies with the right kind of business development outlook and strategy.

To a degree, the figures should be taken with a pinch of salt. In January 2008, the AAR reflected on the figures from 2007, stating that direct marketing pitches were down by 47% from 2006. However, the likelihood is that, at the time of the digital boom, pitches were labelled as “digital” despite containing a heavy element of traditional direct mail. It transpired that direct marketing pitches increased by 10.4% in 2008. What does an “integrated” pitch get labelled as in the AAR statistics, as the make up of that pitch would differ each time? What is clear is that the pitch discipline waters are too muddied to develop any real insight or identify any true trends.

That said, the figures are interesting, but more in part, due to the fact that the pressures of 2009 forced marketing decision makers to review their actual pitch process rather than the agencies they used.

The pitch process is a long and laborious one and with increased pressure on time and resource, one that marketing departments could well do without. On top of that, in times of economic downturn, the client is king. Incumbent agencies will bend over backwards to retain an account and inevitably clients are able to drive down fees and demand more for their dollar.

However, if that were true across the board, there would be no new business opportunities and we know from our work and from our clients that this is not the case. There is no doubt that there has been a rise in the stock of small to medium sized agencies able to offer that “big agency” experience, but with the flexibility, cost-effectiveness and high service levels only a smaller agency can provide. Pitches involving this profile of agency may well fall outside of the AAR’s remit.

The AAR summary also rightly identifies that clients are moving agencies without pitching. For new business agencies and their clients, this signifies the Holy Grail. A core aim of any new business program is not predominantly to get agencies onto pitch lists (indeed, in some campaigns it is a key objective to avoid them). It is to get you and your agency in front of the right kind of prospective clients with the right kind of work and the right kind of budgets. If we can get you in early enough and we can work together to build that relationship, possibly undertaking smaller “test” projects on the way, the need for pitching is often negated. That is the beauty of a well handled, proactive cold calling approach. Often smaller agencies are involved in a pitch to “make up the numbers”, so why not push to develop that relationship and prove yourself before that review/pitch takes place.

A “back door” approach will ensure you are front of mind when reviews are happening and a good new business program will help you achieve this.