Digital marketing budgets set to rise 10% this year

By May 14, 2014
digital marketing

The share of digital in companies’ Marketing budgets is expected to show double-digit growth once again in 2014, with priority given to online advertising.

Companies polled by Information Technology research and advisory specialist Gartner for its latest report* spent on average 10.7% of their annual 2013 revenue on overall marketing activities, with digital marketing spending on average equivalent to 3.1% of revenue. This expenditure represents a 20% increase on 2012. The survey also indicates that digital marketing accounted for an average of 28.5% of the total Marketing budget last year, compared with 25.5% in 2012. Some 11% of the Marketing executives surveyed late last year for the Gartner report stated that their firm spent more than half of the Marketing budget on digital activities in 2013 compared with just 3% of respondents who said this in 2012. These latest figures signal the growing importance which companies across a wide range of industries now accord to digital in their Marketing strategy. The survey found that 12.2% — the biggest share of companies’ digital marketing budgets — was allocated to digital advertising in 2013, a figure roughly equivalent to 2012.

Stepping up mobile strategies

The Marketing executives polled by Gartner are now planning bigger budgets to help define markets, develop offerings and attract customers, says the report. They are making it the number one priority for 2014 to improve their web strategies, especially by targeting their messages more closely to their customers’ interests. Second priority this year will be to devote more time to the design, development and maintenance of their corporate websites. In third place comes marketing via social networks and on mobile devices. “Until now, many marketers have taken a cautious approach to mobile because it involves so many variables such as different operating systems, devices and carriers,” points out Michael McGuire, a vice president for Research at Gartner, explaining: “Now that more than 50% of American adults are smartphone owners, marketers are compelled to develop mobile strategies that ensure their products and services can be found, and purchased, by consumers on the go.”

Growing need for better technical skills

Given the wide range of different channels now available for reaching out to the consumer – websites, call centres, social network communities and so on – Marketing teams need to add new skillsets and may need to brush up on existing skills as well. Over eight out of ten people (81%) polled stated that their firms had a Chief Marketing Technologist in place in 2013, up from 70% in 2012. “Customer experiences with a brand or organisation nowadays span so many channels — both online and offline — that customers have come to expect a consistent experience, no matter where the initial interaction takes place,” underlines Laura McLellan, another Research vice president at Gartner. These demands explain why 77% of all companies have a Chief Customer Officer (CCO) or equivalent, whose job it is to help guide the customer right through the purchasing cycle and beyond, with the ultimate aim of establishing a special, personal relationship with the consumer.

*Gartner's Digital Marketing Spending report is based on a survey of 285 individuals located in the United States, but answering mainly for their entire organisation (only 21% reported US-only data). Respondents represent organisations with average annual revenue of $4.4 billion across eight industries: financial services and insurance, high-tech, communications, media, retail, government, healthcare, and manufacturing.


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