(This article originally ran on WhatTheyThink.)

The way businesses connect with their audiences is changing fast. Direct marketing in 2024 isn’t just about sending messages—it’s about meeting customers where they are and making sure the message resonates. As consumer expectations shift and technology advances, companies must rethink how they engage.

A survey of 501 executives in charge of direct marketing and transactional communication shows that budgets are expected to grow by an average of 5% over the next two years. But as Anne Valaitis, Principal Analyst in Keypoint Intelligence’s Workplace Group, puts it, “Companies aren’t just throwing money at marketing. They’re being smart about where they invest, focusing on automation and digital strategies to get the most out of every dollar.” Despite bigger budgets, efficiency is still a top priority, with businesses leaning into workflow automation, data-driven targeting, and multi-channel approaches to keep customers engaged.

AI is making its mark in a big way. Half of the surveyed companies are already using AI or plan to start within two years. From crafting content to predicting customer behavior, AI is giving marketers the tools to fine-tune their messaging and deliver it at just the right moment in the right way. But not every industry is using AI the same way—banks and utilities are focusing on personalized experiences and streamlining operations, while retail and health insurance are leaning into blockchain for stronger data security.

As businesses shift more toward digital communication, outsourcing is becoming more common. Right now, 68% of businesses outsource at least 25% of their print marketing, and that number is expected to rise. The push toward digital means companies are rethinking their approach—banks prioritize compliance and scalability, retailers focus on cost savings and customer acquisition, and healthcare providers double down on automation and predictive modeling.

AI isn’t just about efficiency—it’s about working smarter. Companies that embrace AI are seeing real benefits, from cutting costs to making better use of customer data. Financial services firms are focused on compliance and optimizing when messages go out, while healthcare and retail brands are using AI to better understand their audiences and personalize interactions.

That’s not to say there aren’t challenges. Many businesses struggle with inconsistent data, regulatory hurdles, and cost concerns. Nearly half of respondents said poor data quality is a major barrier, while industries like banking and health insurance face tough privacy laws that add complexity to their marketing efforts. To stay ahead, businesses need to tackle these issues while embracing technology and creating personalized, multi-channel experiences that truly connect with their audiences.

Learning about effective marketing tactics is crucial for the success of your business and the success of your customers. Find out more about Keypoint Intelligence research here. Keypoint Intelligence provides timely and informative insights on current and future market trends and developments through Multi-Client Studies and the Customer Communications Experience Advisory Service.