Seventy-three percent of companies are planning to increase their spending specifically on digital marketing this year, more than three times the proportion of organisations increasing their traditional marketing budgets (21%). This is a key finding from the seventh annual Marketing Budgets Report published by Econsultancy in partnership with Oracle Marketing Cloud.
Spending overall, however, appears to be less bullish than previous years. After increasing steadily since an all-time low in 2012, just over half (52%) of responding companies stated they would be increasing their overall marketing budgets, 11 percentage points down from last year’s high of 63%.
At first glance, this might suggest that the appetite for marketing investment has started to dip over the last 12 months. However, a greater emphasis on ROI has proven to be a dominant factor in this year’s analysis of marketing budgets, making it even more important for marketers to develop clear measurements and reporting around their marketing effectiveness a core requirement.
While it has been historically common for digital marketing budgets to feel ‘restricted,’ this has been less of an issue this year, despite organisations being less likely to increase their budgets to fulfill their growing marketing needs. Almost a third (29%) of respondents pointed to an inability to measure ROI (up from 25% in 2015).
An area of focus for marketers in the coming year is around customer experience. The research found that nearly three-quarters (73%) of company respondents are working towards delivering cohesive customer experiences, rather than standalone campaigns or interactions.
Because marketers need to increase digital marketing activities, and deliver a more cohesive customer experience while maintaining overall marketing spend, marketing analytics and attribution are likely to see an increase in marketing investment. Additionally, our research found that three of the top five digital marketing technologies that marketers will be investing in this year, A/B or multivariate testing (46%), conversion and optimisation (40%) and marketing analytics (36%), are related to creating and improving the customer experience.
The report is based on a survey of almost 500 digital marketers and ecommerce professionals, mainly in the UK and across a range of business sectors, and carried out by Econsultancy in January and February 2016.
Andrea Ward, Vice President of Marketing, Oracle Marketing Cloud, commented: “Marketers are finding themselves under more pressure to demonstrate return on investments and so are favouring digital solutions, that can help drive a better customer experience while empowering marketers to measure drive a higher ROI through better targeting, AB testing and attribution measurement across the buyers lifecycle.”
“For marketers to be successful, they must take ownership of accountability of the customer experience across digital touchpoints, with one eye on innovation and customer experience, and the other on the bottom line.”
Other findings from the report include:
-) While close to three-quarters (71%) of marketing professionals stated it was getting easier to secure boardroom buy-in for increasing digital marketing budgets in 2015, this has dropped 14 percentage points to 57% this year.
-) Organisations are less likely to increase their ‘earned media’ budgets (down by two percentage points) and ‘paid media’ (down by seven percentage points). Across all forms of media, respondents are also more likely to decrease their budgets compared to last year.
-) The propensity for companies to be more heavily focused towards marketing for existing customers (rather than acquiring new ones) will continue to increase in 2016, with engagement/retention up from 19% in 2015 to 22% this year (as a stronger focus of investment).
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The full report is available on the Econsultancy website here: http://econsultancy.com/
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