Enter a search term such as “mobile analytics” or browse our content using the filters above.
That’s not only a poor Scrabble score but we also couldn’t find any results matching
Check your spelling or try broadening your search.
Sorry about this, there is a problem with our search at the moment.
Please try again later.
Econsultancy's Marketing Budgets 2011 Report tells a familiar story of increasing digital marketing budgets, but a much more nuanced picture is emerging beyond the usual mantra that digital budgets are increasing at the expense of 'traditional' marketing.
The findings also challenge the orthodox view that digital is perceived as more measurable than offline.
Sponsored by SAS UK, our survey-based research about marketing budgets is an encouraging bellwether for the digital industry with almost three-quarters (72%) of companies saying that, overall, digital budgets are increasing this year.
The majority of around 200 mainly UK (client-side) company respondents said their organisations are planning to increase their spending across pretty much the full range of digital marketing channels during 2011.
As was the case last year, the most buoyant areas are social media investment, but there is also typically increased spending in more established areas such as email, search marketing and affiliate activity.
The simplified business case for digital, particular during the worst times of the recession, has been that online marketing is inherently more measurable than offline, and therefore companies ought to cut their budgets in areas such as television and print media where they may as well have been pouring money down a black hole.
Last year's equivalent data generally supported that argument, though a key theme was that social media was the fastest-growing "channel" even though it was the hardest to measure.
This year, social media marketing continues to attract more budget, but the research also shows that a greater proportion of companies than a year ago are increasing their budgets in offline channels such as television, direct mail, newspapers and radio.
Offline is by no means as buoyant as digital but there has certainly been an uplift which can't be ignored.
There are a number of reasons why there has been something of a resurgence for these traditional channels.
- Firstly, improved economic conditions means that companies are investing more money across the board in marketing and advertising. Even if their trajectory has generally been downwards, the fortunes of television, radio and newspapers have improved after the nadir of 2008 and 2009. Digital, even though budgets are growing, has actually decreased since last year as a proportion of total marketing spend.
- Secondly, companies are taking a more joined-up approach to marketing which has resulted in the boundaries between digital and offline channels becoming much less distinct. Digital is driving offline and vice versa. The efficiency of digital channels in attracting and converting brand interest and leads is giving advertisers the confidence to invest more money, for example, on television and radio advertising. Online has become a key barometer for measuring advertising success as consumers type in URLs into their browsers, search for brand slogans on Google or seek out brands to like on Facebook.
- The third reason for a renaissance of traditional channels is perhaps the most controversial on a digital marketing blog. For some companies, anecdotal evidence suggests that they are hitting saturation point in how much they can spend on purely digital marketing channels relative to more money-hungry offline media such as TV and radio (which we have bucketed as traditional media even though they themselves are increasingly digital). Ultimately, aggressive advertising across more expensive offline channels is needed to create the demand for increasingly efficient e-commerce engines.
To expand slightly on the third point, much of the excitement in the marketing world is now about offline again, as our own CEO Ashley Friedlein pointed out while writing about digital marketing trends at the start of this year. For many companies, digital is becoming more about execution and optimisation, rather than the exhilarating but daunting journey into the unknown it was a few years ago.
While many companies are now through that revolutionary phase of playing digital catch-up, it should also be pointed out that there is still a large swathe of companies who are relatively late to the digital game, and still increasing budgets substantially, as they seek to make up ground on more digitally-savvy competitors. These organisations still have a long way to go before they reach the point of worrying only about fine-tuning.
A second, related theme worth discussing here is the understanding of return on investment from digital and traditional channels.
How do you rate your understanding of ROI from digital marketing channels?
(2011 respondents: 189)
(2010 respondents: 215)
As can be seen above, responding companies are now less likely than last year to regard themselves either as 'very good' or 'good' at measuring return on investment (ROI) from digital. (To go more 'granular', companies are now less likely to say they are 'good' at measuring paid search, email and affiliate marketing ROI, but more likely to say they are good at measuring returns from online display, SEO, mobile and social media).
This contrasts with a slightly improved perception of how well they can measure ROI from traditional marketing (at an overall level). In fact, company respondents are now only marginally more likely to say their companies are 'very good' or 'good' at measuring digital marketing ROI (59% versus 56% for traditional marketing).
How do you rate your understanding of ROI from traditional marketing channels?
(2011 respondents: 189)
(2010 respondents: 215)
Why has the perception of the relative measurability of digital and traditional channels changed significantly? As with the renewed confidence in offline marketing, there are several reasons.
- Firstly, as mentioned above, digital channels now make it easier to measure the success of offline advertising. Put, simply, more companies are joining up their marketing channels which is resulting in a significant (and measurable) halo effect across the board.
- Secondly, the rise of social media has brought with it a whole lot of measurement headaches. Although the research shows improvement in ROI understanding for both off-site and on-site social media, there are still fewer than a quarter of companies who say they are good at measuring social media ROI. Not that this necessarily matters. As pointed out in the aforementioned digital trends blog post, many companies are just getting on with social media and digital without obsessing too much about measurement. (See Trend 4: 'Digital for branding - and measurement be damned').
- Thirdly, companies are taking a more sophisticated approach to multichannel measurement. Many marketers thought they understood how to accurately measure the value of stalwart digital disciplines (such as email and search), but they now realise they need more sophisticated attribution models to understand the true value and contribution of each channel. This has translated into a re-assessment of true understanding of ROI and a more modest self-appraisal of how sophisticated they are at measurement.
- For some companies, another factor has been that, because everything was working and numbers were going in the right direction, they lost a bit of focus on measuring return on investment.
In summary, investment in digital marketing channels and associated technology is still buoyant, and increased challenges around measurement are the natural corollary of a more integrated and multichannel picture. Digital is helping to feed a comeback for some offline channels.
Multichannel will continue to be a huge theme again this year, as companies try to break down the damaging silos which separate different channels.