Marketing Spend Makes the Move to Digital

For many marketers, an increased focus on digital methods reduces costs, allowing brands to reinvest the savings for continued development and departmental growth.

Though today's economy remains unsteady, most companies must spend money to make money. For marketing leaders across industries, the expansion of digital communications not only presents new ways to connect with customers, but also increases investment in technology and the growing mobile and social channels. But, as marketers continue to secure bigger budgets, their efforts to attract, acquire, and attain customers also generates more pressure to validate overall return on investment.

Gartner's "U.S. Digital Marketing Spending Report, 2013" explores how marketers across six industries are investing their time, money, and effort as the technological space continues to evolve. The study, which surveyed more than 200 U.S.-based marketers at companies with more than $500 million in annual revenue, examines how leaders and their teams are allocating their budgets and which activities lead to success, demonstrating how marketers behaved in 2012 and how they expect their focus to change throughout 2013.

The following statistics observe significant trends in the marketing space and how the digital revolution continues to impact marketing goals and activities:

  • Companies spent an average of 10.4 percent of their annual revenue on overall marketing activities, including salaries, traditional, and digital marketing costs, throughout 2012.
  • Forty-three percent of respondents expect their marketing budgets to increase in 2013, with the average budget projected to grow by 5.7 percent. Conversely, 47 percent of marketers predict their budgets will remain the same, while 10 percent may face budget cuts.
  • Digital channels continue to gain momentum, leading marketers to focus more attention on content creation and social and mobile marketing. Digital marketing budgets total 2.5 percent of revenue, and are expected to increase by 9percent in 2013. Yet, while 3 percent of respondents spend more than 50 percent of their total budgets on digital marketing, the average company spends 25 percent on digital marketing each year.
  • Marketers allocate 12.5 percent of their total digital marketing budget on digital advertising and 11.6 percent on content creation and management.
  • Forty-one percent of marketers say digital marketing reduces costs, as opposed to traditional marketing methods, which allows the company to filter those savings back into the overall marketing budget to fund continued investments.
  • On average, marketers outsource about 50 percent of their search marketing, 46 percent of their digital or online advertising, and 45 percent of their mobile marketing efforts.
  • Seventy percent of companies retain a chief marketing technologist to guide digital marketing strategies and align technological advances with the goals of the marketing department.

Key takeaway: According to 31 percent of marketers, digital advertising remains one of their top two priorities, while 30 percent say design, development, and maintenance of their company's corporate website tops their list. With social media marketing (27 percent) rounding out the top three, we can clearly see that the current marketing mix focuses on boosting the brand's digital presence. But, while these emerging strategies hold great potential, marketers must be sure not to alienate the tactics that have established their brand's reputation. Digital marketing strategies offer the opportunity to connect with those that have embraced Web, social, and mobile, but companies must be sure to invest continued effort in traditional methods in order to reach and retain customers of all types.