Digital Marketing Budgets to Increase by 8 Percent in 2015

The 50 percent of companies planning a marketing increase report their average 2015 increase will be 10.4 percent, according to the Gartner report.

digital marketing and gartner

Marketers are investing in the customer experience to drive business advantage and profitable revenue growth, according to a survey of marketing executives by IT research firm Gartner.

The survey found that marketing budgets remained healthy in 2014, with, on average, companies spending 10.2 percent of their annual 2014 revenue on overall marketing activities, with 50 percent of companies planning an increase in 2015.

Not only are marketing budgets remaining healthy, they are forecast to grow in 2015, with half of the companies surveyed planning an increase in 2015.

"We’re often asked if digital marketing mostly benefits B2C companies, and our answer is always no," Laura McLellan, research vice president at Gartner, told eWEEK. "In fact, we’re seeing B2B companies benefit greatly from digital marketing because at the end of the day, companies sell to people, so it’s all B2H--business to human."

In addition, the larger the company, the higher the marketing expense budget as a percentage of revenue — those with revenue of $5 billion or more reported 11 percent, compared with 9.2 percent for those with revenue between $500 million and $1 billion.

Digital marketing spending averaged one-quarter of the marketing budget in 2014, and the survey found that of the 51 percent of companies who plan to increase their digital marketing budget in 2015, the average increase will be 17 percent.

As in prior years, the survey revealed that when it comes to allocation of the digital marketing budget by activity, digital advertising takes the top spot.

Expenditures for digital advertising are projected to grow in 2015, as brands, ad agencies and publishers invest in ways to deliver more-relevant advertising to people, the report found.

The survey also suggested that in 2015, digital advertising would share its top ranking with mobile marketing.

"An example of a business practice which is being transformed is the sales channels a company uses," McLellan said. "In the next five years, traditional marketing and selling will shift to digital channels to capitalize on the "power to the people" phenomenon that is displacing brand-centric strategies in favor of buyer-driven everything. This means digital marketing and digital commerce."

Marketing budgets as a percentage of revenue varied widely, with 46 percent spending less than 9 percent of revenue, 24 percent spending between 9 percent and 13 percent of revenue, and 30 percent spending more than 13 percent of revenue.

The 50 percent of companies planning an increase report their average 2015 increase will be 10.4 percent. Of those, the ones that report outperforming competitors said their planned 2015 increase would be 13.6 percent, according to the report.

"Eventually the term digital marketing will go away–marketing in a digital age means all marketing will be digital to some extent. A connected economy is set to change a brand's fundamental relationship with its target markets, customers—even the way revenue is derived," McLellan said. "The new economy creates opportunity to be far more relevant to customer demands because it's informed by actual consumption behaviors."