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A majority of companies (53%) spend less than 5% of their total marketing budgets on optimization activities, despite the fact that a small uplift in conversion rates can translate into millions of dollars of extra revenue.

The findings come from a new survey by Adobe which also found that companies spending more on optimization are reaping the benefits.

The Adobe 2013 Digital Marketing Optimization Survey, with analysis carried out by Econsultancy, received global responses from more than 1,800 digital marketers across North America, Europe and Asia.

It explores the key areas in which digital marketers need to excel to ensure success, including mobile, social, personalisation and customer experience.

In a recent blog post we asked whether 2013 would be the year of conversion optimization due to the potential benefits from just a small uplift in conversion rates, however based on the level of investment revealed in the report it would seem that we are yet to reach that tipping point.

As mentioned, just over half of respondents spend less than 5% of their total marketing budgets on optimization activities, including agency fees, professional services and technology.

In total, 86% of companies surveyed allocate 15% or less of their marketing budget to optimization activities, while at the other end of the scale only 3% of respondents allocate more than half of their marketing budget to optimization efforts.

What percentage of your total marketing budget is allocated to optimization activities (including agency fees, professional services, technology)?

With so little money being invested in optimization efforts it’s no wonder that more than a third (35%) of respondents reported a conversion rate of less than 1%.

But the data also shows that companies spending more on optimization are reaping the benefits, with those investing more than 25% of marketing budgets in this area being twice as likely to enjoy higher conversion rates.

Only 16% of those who allocate up to 25% of their marketing budget for optimisation enjoy average website conversion rates of 5% and above, compared to 39% of those who allocate more than a quarter of marketing budget to this area.

Average website conversion rates and proportion of marketing budgets allocated to optimization:

David Moth

Published 29 April, 2013 by David Moth @ Econsultancy

David Moth is Editor and Head of Social at Econsultancy. You can follow him on Twitter or connect via Google+ and LinkedIn

1690 more posts from this author

Comments (5)

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Will Young

This confirms a hunch I've had for a while: the disproportionate amount of budget spent on driving traffic to a site vs. making the experience conducive to a conversion.

Would be interesting to know how the stats break out by industry and company size.

over 3 years ago

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Vijay Bhagani

Agree with Will. Interesting article and I have seen in my previous company investment in site optimisation and improving consumer experience one on the site really help. We grew by about 1.5 - 2% pts on CVR. Indeed if we can get a breakdown by industry would really help. Any chance ?

over 3 years ago

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Joe

I think the 53% number is very high. I am finding that many companies don't even know what conversion rate optimization is. It is sad considering how much money can be made with it.

When I talk to companies about conversion rate optimization, they think it is search engine optimization. It is so frustrating that the word "optimization" is almost exclusively associated with SEO. I always need to explain that it is not SEO and we improve website designs to convert more visitors into customers. They say, "oh, we have a website designer that we work with and we are happy with them".

I even show them our case studies which detail how we increased revenue for companies by 300% with CRO and they STILL don't get it.

This survey was carried out by Econsultancy which has a much more educated audience. If this survey was completed by a more broad range of companies, I think the vast majority would be clueless what CRO is.

Joe

over 3 years ago

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Mark

I completely agree with Joe.Most companies are totally ignorant about CRO, and they do think it's SEO.

When you look at other research that shows what companies are spending their money on and what their priorities are,CRO doesn't even get a mention.

over 3 years ago

Jennifer Smith

Jennifer Smith, Product Leader, Consumer Engagement at MasterCard

Linked to developing accountability using data driven decisions for marketing budget/spend....is this perhaps done on a certain level but not consistently for all marketing related initiatives? Or is it still a new practice so it requires reallocation of an existing program in an already increasingly tight marketing budget?

over 3 years ago

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