It was a little early for my mind to keep up with Bruce Biegel’s, senior managing director of consultancy Winterberry Group, presentation this morning at the 2009 Direct Marketing Association (DMA) conference. Luckily, the slides will be posted in the next day or so on the firm’s Web site here, but for those of you who can’t wait until then, here are some highlights, which I will attempt to recapture between bites of Lucy’s Jack Quesadilla with carne asada.

Depending on how you looked at it, Biegel’s closing remark during his morning’s thought leadership session “Outlook 2010 and Beyond,” could be either depressing or uplifting: “Be really glad 2009 is over,” he said. “It was a year of a lot of hard work and not a whole lot of return.”

Maybe the worst is over and marketers do have something to look forward to in the next year, especially in the digital space, where Biegel says direct marketers can really shine if they take full advantage of Web analytics.

Traditional marketing in 2009 faced challenges in all directions:

• budget cuts;
• industry pull backs;
• consumer preference for digital channels of communication; and
• continuing shifts toward email (costs an average of $5 per thousand) as a substitution for costly traditional mail (around $27 per thousand).

Digital marketing is estimated to grow 5 percent to $25.2 billion in 2009, motivated primarily by the simple fact that, “where the consumer goes, that’s where we’re going to go,” Biegel said. Other driving factors include:

• shift away from costly traditional channels;
• increased measurability in search;
• bigger, more targetable impact from display;
• increased penetration and utilization of social media; and
• rise of small and midsize businesses (SMBs) entering the digital space.

Biegel examined each digital channel, and shared both its current state as well as Winterberry Group’s prediction for how the channels will grow in the following year:

Search:

• Spending is growing at 4.3 percent and is expected to reach $13.9 billion for 2009, and continuing to grow another 6.4 percent next year to reach $14.8 billion.
• More SMBs are amping up their local search capabilities.
• More companies are exploring video search as rich media becomes a viable marketing tool.
• Marketers are shifting their thought process to connect with “humans” and “people,” rather than “clicks” or “uniques.”

Email:

• Spending growing at 32.1 percent to reach $1.2 billion in 2009, and continuing to grow another 8.6 percent to hit $1.4 billion in 2010.
• Email is low cost and has proven effectiveness.
• It is increasingly integrated with multiple channels, and for those who think email’s going away, Biegel challenges them to try signing up for a social media account without an email address.
• More companies are investing in their email databases and services providers are delivering more robust, easy-to-use solutions allowing marketers to essentially do more.

Display:

• Spending growing at 1.2 percent to hit $9 billion in 2009, and will make a seemingly dramatic leap 10 percent to hit $9.9 billion next year.
• Challenged by factors such as low click through rates (CTR) and low transparency, display has to shift the way it’s perceived. Biegel anticipates that the “right” metrics, driven by analytics and optimization, will be more clear next year. Display, he said, cannot be viewed as a standalone as its impact is often manifested in its ability to influence action in other channels.

Social Media:

• Spending declined 3 percent this year to $1.1 billion, but is expected to pick up by 13.2 percent to $1.3 billion next year.
• The challenge for marketers now is to merge the “listening” component with actual “marketing,” which will require, more than anything else, experience and expertise.

Mobile:

• Spending growing 27.7 percent to $1.0 billion in 2009, and growth will continue strong at 29 percent to hit $1.33 billion in 2010.
• Beigel admitted that for the past few years, every year was supposed to be “the year of mobile,: and unfortunately, 2009, being that it’s almost over, has yet to live up to the declaration.
• There has been success in smaller areas: mobile couponing, popularity of applications, increase number of suppliers offering mobile email and messaging capabilities, and location-based targeting solutions.

Biegel asked marketers to keep five final points in mind as they forge into next year:

• Audience fragmentation will continue, forcing marketers to continue chasing the consumer. Therefore, messaging has to be flexible and budgets dynamic and adaptable. (According to a recent survey by the University of California, Berkeley and University of Pennsylvania, 66 percent of consumers say they don’t want “tailored” advertisements. The question, as reported by MediaPost, was presented as follows: “Please tell me whether or not you want the Web sites you visit to give you discounts that are tailored to your interests,” to: Would it be OK or not OK if these ads [discounts/news] were tailored for you based on following what you do OFFLINE — for example, in stores?”. Biegel argued that the wording of the question may be to blame for the large response against tailored advertising.)
• Suppliers have to think outside of the box to deliver innovative solutions to help marketers achieve their goals.
• Regulations will be barriers to success, but the DMA is confident in its ability to keep consumers’ best interests in mind and foster a healthy self-regulating body.
• Digital efforts will serve as an effective substitution to costly traditional methods, especially during slow periods.
• Optimization and trigger marketing will be critical, especially with the exorbitant amount of data entering organizations today.