Digital Marketing Budgets on the Rise, With a Focus on Mobile

A Gartner report reveals that 81 percent of organizations were found to have a chief marketing technologist in 2013, up from 70 percent in 2012.

Businesses on average spent 10.7 percent of their annual 2013 revenue on overall marketing activities, with digital marketing spending averaging 3.1 percent of revenue, according to a report from IT research firm Gartner.

The findings, included in Gartner's Digital Marketing Spending report based on a survey of 285 individuals located in the United States, but answering mainly for their entire organization (only 21 percent reported U.S.-only data), projected digital marketing budgets would rise by 10 percent in 2014, following a double-digit percentage increase in 2013

The report also revealed 81 percent of organizations were found to have a chief marketing technologist in 2013, up from 70 percent in 2012. A further survey finding was that 77 percent of companies have a chief customer officer (CCO) or the equivalent.

"Until now, many marketers have taken a cautious approach to mobile because it involves so many variables such as different operating systems, devices and carriers," Michael McGuire, research vice president at Gartner, said in a statement. "Now that more than 50 percent of American adults are smartphone owners, marketers are compelled to develop mobile strategies that ensure their products and services can be found, and purchased, by consumers on-the-go."

Eleven percent of respondents said they spent more than half of their marketing budgets on digital activities in 2013 compared with only 3 percent in 2012. Digital marketing represented an average of 28.5 percent of the total marketing budget in 2013, as compared with 25.5 percent in 2012.

"Marketing leaders are securing bigger budgets to define markets, develop offerings and attract, acquire and retain customers," Yvonne Genovese, managing vice president at Gartner, said in a statement. "Digital marketing is taking an increasing share of the marketing budget with annual digital marketing operating budgets totaling 3.1 percent of a company's revenue in 2013, as compared with 2.6 percent in 2012, representing a 20 percent increase."

The survey found that 12.2 percent — the biggest share of their digital marketing budget — was allocated to digital advertising in 2013, just as in 2012, suggesting when it comes to budget allocation, marketing leaders support a diverse, and increasingly complex, marketing mix.

Design, development and maintenance of the corporate Website account for the second-largest share of digital marketing budgets as the increase of inbound marketing channels such as social networks, customer forums and the blogosphere creates more traffic on the corporate Website.

Digital commerce, social marketing and mobile marketing — three activities that increasingly overlap — are closely tied for the third-largest share of digital marketing budgets, according to the report.

"Customer experiences with a brand or organization span so many channels — both online and off — that customers have come to expect consistent experiences, no matter where an interaction initially takes place," Laura McLellan, research vice president at Gartner, said in a statement. "Customer touch points include Websites, mobile apps, social profiles, directory listings, on-site search, email interactions, communities, call center and more; hence, the increasing popularity of the role of the chief customer officer to help guide the customer right through the buying cycle and beyond."