Data-driven marketing is becoming a powerful economic force, according to a report released Monday by the Direct Marketing Association during DMA 2013 in Chicago. The data-driven marketing economy (DDME) added $156 billion in revenue to the U.S. economy and fueled more than 675,000 jobs last year.
Every single industry in the U.S. relies on data-driven marketing," said DMA president-CEO Linda A. Woolley, during her keynote address. "And this means that the results of this study will benefit every marketer—large or small—who has an interest in a vital, efficient and growth-producing marketplace—and that's every one."
The DMA said the value of the DDME is equivalent to nearly half of the total U.S. expenditures on marketing and advertising services, which the DMA estimates at about $292 billion annually. It also represents more than half the size of the entire Internet ecosystem, which IAB estimates at $300 billion, and more than two-thirds the size of the entire ecommerce market in the U.S., valued at $222 billion by IAB, the DMA said.
"The research from the DMA's DDMI study highlights the role that data-driven marketing has within the economy in the U.S.—it is a major export as our country leads the world in this area of innovation and cutting edge business practices," said Rick Erwin, president of targeting at Experian Marketing Services. "As we've said before data-driven marketing is not only good for the industry through job growth and economic sustainability but good for consumers through relevant advertising and offers."
The DMA's report, "The Value of Data: Consequences for Insight, Innovation, and Efficiency in the U.S. Economy," found that the real value of data is in its application and exchange across the DDME; 70 percent of the value of the DDME, $110 billion in revenue and 478,000 jobs, depends on the ability of firms to exchange data across the DDME.
"If markets had to operate without the ability to exchange data across the DDME, the U.S. economy would be significantly less efficient. U.S. companies would have to spend considerably more than $110 billion to maintain current output levels," the report said.
The study also found that the most significant beneficiaries of the DDME are small businesses and startups because the exchange of data across the DDME enables small businesses to compete effectively with big players.
"Thanks to data, startups and small businesses today face lower barriers to market entry than they have since the 1870s," the report said. "The data-driven marketing revolution has eased access to advertising, and advertising-dependent capital. Products and publications that deliver value to users can be launched and grow at a pace unchecked by the need to find a large pool of customers willing to make immediate payment for the value they receive, because entrepreneurs and investors have confidence that customers or audience can be built incrementally, and when they build over time, they eventually have value to advertisers."
Customers are also benefiting from the DDME as the proliferation of data has forced more traditional marketers to become increasingly customer-centric.
"Data-driven marketing is now about discerning what customers want and need and engineering the company to provide it. The more firms can use data to develop a 360 degree, multi-channel view of what customers think and want, the more the customer will truly be king," the report said.