Digital marketing spending averages 2.5 percent of company revenue, and these budgets are expected to increase 9 percent in 2013, according to a survey of U.S. marketing executives by Gartner, Inc. The survey found that, on average, companies spent 10.4 percent of their annual 2012 revenue on overall marketing activities; these expenses include salaries, advertising research, agencies and software as a service.
These findings are included in Gartner's U.S. Digital Marketing Spending report that is based on a survey of more than 250 marketers from U.S.-based companies with more than $500 million in annual revenue, across six industries (financial services and insurance, high-tech, manufacturing, media, retail and healthcare). The survey was conducted in November and December of 2012. The report examines how marketers are allocating their budgets, what activities are contributing to marketing success and other factors.
"While digital marketing has been a growing area of investment in many organizations for a decade, the scope is increasing and the techniques are maturing," said Yvonne Genovese, managing vice president of Gartner for Marketing Leaders. "However, increased funding is a double-edged sword as it brings new opportunities, but it also puts more pressure on marketers to measure and attribute investments to revenue and profit growth."
The majority of survey respondents are spending between 10 percent and 50 percent of their marketing budget on digital marketing activities, with the average at 25 percent.
"Digital advertising accounts for the largest share of digital marketing budgets at 12.5 percent, while content creation and management account for the second-largest share," said Laura McLellan, research vice president at Gartner. "Marketers today are emphasizing the use of content marketing as part of a shift to drive more inbound marketing. While outbound marketing emphasizes finding audiences and delivering messages to them (for example, digital advertising and email marketing), inbound marketing focuses on techniques to get found by potential customers and create an ongoing dialogue with them (for example, social marketing and communities)."
Improving commerce experiences is the activity that will get the largest budget increase in 2013. The focus on commerce experiences will be in improving the ability to find the commerce site and the shopping experience. It will also include strategies to embed commerce in digital marketing channels such as search, social and mobile.
When asked to identify how they are funding their digital marketing activities, two in five marketers said they realized savings from digital marketing compared with traditional techniques, and they are taking that money and reinvesting it into their programs. On average, 28 percent of marketers say they have reduced their traditional advertising budget to fund digital marketing activities.
The corporate website and digital advertising were both ranked as the top digital marketing activities for marketing's success, while social marketing emerged as the next most important activity.
"The survey results suggest that the corporate website will not be displaced anytime soon by a brand's social media presence," said Bill Gassman, research director at Gartner. "That's all the more reason for marketing leaders to continuously invest in measuring and optimizing their websites through Web analytics and testing, paying attention to all aspects — from customized landing pages to compelling content that encourages visitors to be engaged with your brand."
Additional information is available in the report "Key Findings from U.S. Digital Marketing Spending Survey, 2013." The report is available on Gartner's website at http://www.gartner.com/digitalmarketing.
Gartner analysts will provide additional details from the survey in the complimentary webinar, "Why Digital Marketing Budgets Are Underfunded," on March 26, at 10 a.m. EDT and 1 p.m. EST. The analysts will examine how marketers are disrupting traditional budgets as they shift the marketing mix toward social, mobile and digital commerce experiences. To register for the webinar, please visit http://my.gartner.com/webinardetail/resId=2332815?srcId=1-2994690285.
This research is part of the Gartner for Marketing Leaders program. This program provides real-time, personalized digital marketing guidance, from vision through execution. Gartner for Marketing Leaders is focused on helping digital marketers succeed in eight key areas: emerging digital marketing trends and techniques, social marketing, mobile marketing, monetizing digital marketing through commerce, multichannel marketing, data-driven marketing, digital marketing essentials and digital marketing programs. Additional information is available at http://www.gartner.com/digitalmarketing. For additional details, email GML@gartner.com.
Gartner, Inc. (NYSE: IT) is the world's leading information technology research and advisory company. Gartner delivers the technology-related insight necessary for its clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, Gartner is a valuable partner in 12,400 distinct organizations. Through the resources of Gartner Research, Gartner Executive Programs, Gartner Consulting and Gartner Events, Gartner works with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, USA, and has 5,300 associates, including 1,390 research analysts and consultants, and clients in 85 countries. For more information, visit www.gartner.com.