The unaccounted millions of ad spend: Michael Pryor on the growth of data-driven marketing

Any industry responsible for driving $2.39 billion in revenue has to be regarded in aggregate terms as healthy. Advertising turnover data for the full year of 2014 certainly paints a picture of health. You could also contend that an even more robust picture would emerge if we took account of data-driven marketing and advertising. It’s that large chunk of expenditure that’s sits alongside traditional advertising mediums, but goes largely unreported – yet we know it accounts for many tens of millions being invested in smart technology and automation tools, driving targeted relationship marketing.

In the recently released ASA Advertising Turnover report, overall expenditure was up 4.2 percent, and seven of the nine advertising expenditure categories contributing to this result grew during 2014 (compared to 2013) or remained static. While two (Television and Newspapers) declined. The big driver of change of course, is that elusive category called ‘interactive’.

While attention to the rampant growth of the ‘interactive category’ grabs headlines, there’s an extra piece of the expenditure puzzle which largely goes unaccounted for. And that’s the value and confidence New Zealand marketers are showing by increasing their investment in data-driven marketing and advertising (DDMA).

When asked in a late 2014 survey to assess the value of data-driven marketing and advertising and its prospects for future growth, 49.1 percent of New Zealand’s marketers were extremely confident. And 20 percent of marketers stated that expenditure on data-driven marketing was also tipped to grow significantly in the coming year.

We’re already seeing the evidence of this confidence in many of the recent NZDM award winning campaigns – where targeted customer advertising and marketing activity, supported by sizeable investments in marketing automation tools are creating deep customer engagement and delivering business results.

What’s clearly masked by the rise of this type of marketing and advertising expenditure, is the impact it could have in eroding the value of traditional ‘broadcast’ advertising mediums. While we are likely some years away from a pendulum swing in favour of data-driven marketing over some of the traditional broadcast categories or over that elusive ‘interactive’ category of expenditure, the reality is how many years away are we? Conservatively you could readily estimate that some several hundred million of marketing expenditure is already being invested in DDMA today – making the healthy picture of advertising turnover, look even rosier.

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