Marketing budgets are up this year, according to Winterberry Group, but the email channel may not see the benefit.  It will depend on the tenacity and integration of email marketing into both customer acquisition and retention innovations.

Bruce Biegel, managing director of Winterberry Group, presented to the Email Insider Summit conference this week, and I am pretty sure it was good news.

We all lived through a 2009 when our inexpensive and high ROI email channel was expected to carry a larger share of retention and customer upselling, even with no new budget.   Biegel seems to hint that 2010 will be another year when email marketers will have to fight hard for a budget.  That worries me a bit.  If Biegel is correct and this is the year that companies invest in digital channels to build top line revenue, focusing on acquisition and media optimization, will companies resist new investment in retention and email marketing?

The answer seems to be, "Yes, just steal from other channels to get what you need."  Winterberry finds that the recession is still holding back consumer spending, but in Q1, companies are starting to invest in marketing again, particularly focused on growing the top line. That means most of the marketing spending will shift back toward acquisition and demand generation, but a lot of consumer caution will remain at least for another couple of quarters.

Even though email marketing is not typically included in acquisition budgets, Biegel remains optimistic for the email channel.  He says that when asked, marketers do say that they will increase spending in email marketing, but that since this is an internally managed function, it doesn't always show up in the spending forecasts.  Winterberry does forecast a modest increase of email spending to $1.4B up from $1.2B last year. Biegel says he thinks that may be too low, and suggests the spending may actually reach $1.6B.  He also says that retention spending will move from postal marketing to email marketing, and that the email will benefit from the general shift of dollars into the digital toolbox.

I think what that means is that email marketers who want new budgets must convince executives that email is a "hub" for customer communications and needs support for integration, content management and data management.  Email works really well with all the acquisition and lead generation channels: search, online outreach, commerce, and social and apps marketing.  Certainly, most house files include prospects as well as customers.  An email platform that works really well with social and eCRM is essential.  Investment in data management, campaign automation, and content optimization will result in increased response and customer satisfaction. The argument for more automation and data integration should be straight. Many marketers have already proven the connection between targeting and response.