To make money you've got to spend money, they say-and dollars carefully invested in marketing can pay particularly high dividends, provided they're positioned behind the right strategies. This can be especially true of digital marketing, as the cost of entry is often much lower than for other channels like broadcast and print.
Yet, a surprising 54% of businesses spent less than $1 million on digital marketing in 2013, per the results of a recent study by SEMPO and Econsultancy; additionally, the study revealed that almost half of digital marketing budgets were spent on search-with 31% on paid search and 18% on SEO. Other top areas where digital marketing dollars were allocated included email (18%), digital display (13%t), and social media (11%).
Perhaps the survey's most eye-opening finding was that only 3% of digital marketing budgets is devoted to mobile, despite the facts that 80% of those polled identify mobile as significant and adults across the globe report using the mobile internet 1.98 hours daily, up significantly from 1.31 hours back in 2012, according to recent data from market research firm GlobalWebIndex.
Many industry professionals, like Michael Baliber, senior vice president and director of media strategy for ID Media, are surprised by the SEMPO survey results.
"Companies with more significant marketing budgets should have no problem spending over $1 million on digital media," Baliber says. "And for companies with smaller marketing budgets, the majority of spend should be allocated to digital, as digital costs represent a drop in the bucket compared to TV."
James Briggs, CEO of Briabe Mobile, Inc., is amazed that email commands 18% of digital marketing spending, "especially compared to more personal channels such as mobile and social. I've read forecasts that mobile will represent nearly 50% of all digital media spends within the next three years, but this study's findings tell a different story."
In talking to different digital media experts, the consensus is clear: marketers should count on divvying out more digital marketing dollars in 2015 than they have been. Here's why:
- Consumers are increasingly spending more time online. "Digital marketing is becoming the industry standard, and companies cannot afford to get left behind," says Rochelle Sanchirico, head of marketing and analytics for Webs. "More people are going online today to purchase goods or services and use their mobile devices to search for and find businesses. With this shift, businesses have to ensure they are at the top of search results on search engines and local directories."
- Digital marketing is measurable. "Marketers can quantify returns on their marketing investments better in digital than non-digital channels, collect data about customer interactions, and tie that interaction data to a revenue-producing outcome," says Michael Lummus, director of digital marketing solutions for Teradata Marketing Applications.
- Digital marketing provides increased insights into consumer behaviors, allowing for better consumer engagement. Smart marketers can understand how their customers are interacting online and gain contextual knowledge that indicates preferences and motivations, Lummus says.
- Today's consumers demand a consistent and relevant experience. "Greater digital marketing budgets are necessary to ensure consistency across channels and to provide an online experience that is tailored to the individual," Steve Earl, senior director of product marketing for Webtrends, says.
- A little goes a long way. Companies with small budgets can outperform large companies with large advertising budgets by creating quality content online, says Carah Counts, digital marketing strategist with CareATC, Inc.
When asked where digital marketing spends should be specifically targeted, Baliber says search should remain a top priority. "It's the closest to the bottom of the funnel, the lowest hanging fruit that can convert customers who are raising their hands immediately to purchase. Display, mobile and video should then be added to fill the top of the funnel and drive brand awareness," says Baliber.
Lauren Witte, associate director of marketing for Jackson White, believes money should also be increasingly directed to organic links and social media advertisements in the coming year. Whichever categories you designate for digital marketing spends, be sure to set concrete, measurable goals. "‘We want more leads' is not a measurable goal. Something like, ‘Over the next 12 months we want to increase visitor-to-lead conversion by 50 percent' is measurable," Counts says.
(image courtesy of Shutterstock.)