Digital Marketing Is Underfunded
By Laura McLellan | March 20, 2013 | 1 Comment
Digital marketing budgets averaged 2.5% of company revenue in 2012, growing 9% in 2013 — and that’s still too low. At a time when 2012 marketing operating budgets were over 10% of revenue, spending only 25% on digital marketing implies some companies aren’t taking the shift seriously enough.
Let’s look at just 3 areas of digital marketing spending. Understand that marketing’s purpose is the same as it has always been – attract, acquire and retain customers in order to grow revenue and profitability. And do that in a way that will bring the highest returns, regardless of marketing (or sales) channels used.
Digital/on-line advertising makes up the largest part of the digital marketing budget, but is a small percent of total advertising, especially for consumer-focused companies. This is not a battle between digital and traditional advertising or inbound vs. outbound marketing (no matter what your agency says) – this is a struggle to get the right content in front of the right buyers at the right time to influence their decision to purchase. Take the time to understand how buyers are changing their behaviors and where they are spending more time on-line – that should inspire more integrated marketing channels, including digital/online advertising.
Corporate website also makes up a large part of the digital marketing budget. As your face to the outside world, helping prospective buyers understand who you are, what you stand for, as well as what you offer becomes increasingly critical. It is also linked to the social and mobile customer experience and digital commerce. It used to be enough to update websites a few times a year, but now has become a continuous process and one you simply can’t underfund. The days of static “website as on-line corporate collateral” are gone forever.
Digital commerce experience is the top priority for increased digital marketing spending in 2013. Multidimensional stories told with the intent of leading a prospect down the buying path and driving a transaction, commerce experiences provide consumers with a sequence of information, experiences (think entertainment and gamification) and channels that draw them into the buying process. Not fully mature yet, but all organizations should be exploring and piloting.
See this free research “Key Findings from U.S. Digital Marketing Spending Survey, 2013” to learn more about these 3 digital marketing activities, as well as others such as analytics, social, mobile, content and search marketing. Based on a survey of 203 marketers from U.S. companies with more than $500 million in annual revenue (average revenue 5B$), it examines how marketers have allocated their budgets, what activities contribute to marketing success and where the largest 2013 investments will be made.
Or attend our free webinar on March 26th Why Digital Marketing Budgets Are Underfunded