BTL Spending to Handily Beat ATL: Study

Below-the-line spending is expected to grow 7.8% annually from 2003 to 2007, outpacing above-the-line advertising, projected to grow by an average 5.5% each year.

The findings support a growing shift in marketing expenditures from brand building to direct-response oriented promotion channels, according to a report released last week by the Winterberry Group, a New York consulting firm.

The study also found the ATL spending was expected to grow 5.6% last year, a 1.7% lift behind overall marketing spending. By 2007, that difference will be more pronounced, with ATL spending growing 4.6% compared with 7.3% overall.

In contrast, nearly all BTL channels are projected to grow in excess of 6.9% annual growth forecast for the whole industry between 2003 and 2007. Interactive marketing—including search, e-mail and online ads—will be leading the pack.

According to PROMO's 2005 Industry Trends Report, promotional marketing spending was on the rise for the third consecutive year, coming in a 8.9% in 2004. (PROMO's 2006 Industry Trends Report will appear in the upcoming April issue of PROMO Magazine).

Winterberry Group identified the follow seven trends directly affecting the shift in marketing budgets:

1. Changing consumer demographics decrease the influence of traditional mass-media (i.e. "one-size-fits-all") marketing messages.
2. Growing consumer sophistication heightens the demand for channel-agnostic communications.
3. Widespread marketing "clutter" diminishes the impact of commercial messages that don't address specific and individually relevant consumer needs.
4. Enhanced information availability empowers both marketers and consumers with insight that allows for precise customer targeting and intelligent purchase decisions.
5. Heightened client pressure to deliver quantifiable value forces marketing service providers—especially agencies—to re-evaluate services platforms.
6. Growing effectiveness of "multichannel" campaigns (those that cross multiple media) reinforce demand for tactics that establish one-to-one relationships between marketers and consumers. The Internet Advertising Bureau found that well-executed multi-channel campaigns generate a 7% to 34% sales lift.
7. Rapid technological advances allow for consumer/marketer interactions that are frequent, easier and more relevant than previously possible.

In the report, above-the-line marketing channels were defined to include TV, radio, print, outdoor and yellow pages. Below-the-line was defined as database marketing, direct mail, interactive marketing, insert media and promotion marketing.

The report was commissioned by V12 Group, a provider of below-the-line marketing services.

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