Digital marketing spending averages 2.5 percent of company revenue, with budgets expected to increase 9 percent in 2013, according to a survey of U.S. marketing executives by IT research firm Gartner.
The report found that, on average, companies spent 10.4 percent of their annual 2012 revenue on overall marketing activities. These expenses include salaries, advertising research, agencies and software as a service (SaaS). The survey of more than 250 marketers from U.S.-based companies with more than $500 million in annual revenue examines how marketers are allocating their budgets, what activities are contributing to marketing success and other factors.
"While digital marketing has been a growing area of investment in many organizations for a decade, the scope is increasing and the techniques are maturing," said Yvonne Genovese, managing vice president of Gartner for marketing leaders, in a statement. "However, increased funding is a double-edged sword as it brings new opportunities, but it also puts more pressure on marketers to measure and attribute investments to revenue and profit growth."
The corporate Website and digital advertising were both ranked as the top digital marketing activities for marketing's success, while social marketing emerged as the next most important activity. The report said improving commerce experiences is the activity that will get the largest budget increase in 2013, while the focus on commerce experiences will be in improving the ability to find the commerce site and the shopping experience. It will also include strategies to embed commerce in digital marketing channels such as search, social and mobile.
"The survey results suggest that the corporate Website will not be displaced any time soon by a brand's social media presence," Bill Gassman, Gartner research director, said in a statement. "That's all the more reason for marketing leaders to continuously invest in measuring and optimizing their Websites through Web analytics and testing, paying attention to all aspects—from customized landing pages to compelling content that encourages visitors to be engaged with your brand."
When asked to identify how they are funding their digital marketing activities, two in five marketers said they realized savings from digital marketing compared with traditional techniques, and they are taking that money and reinvesting it into their programs. On average, 28 percent of marketers say they have reduced their traditional advertising budget to fund digital marketing activities.
"Digital advertising accounts for the largest share of digital marketing budgets at 12.5 percent, while content creation and management account for the second-largest share," Laura McLellan, Gartner research vice president, said in a statement. "Marketers today are emphasizing the use of content marketing as part of a shift to drive more inbound marketing. While outbound marketing emphasizes finding audiences and delivering messages to them (for example, digital advertising and email marketing), inbound marketing focuses on techniques to get found by potential customers and create an ongoing dialogue with them (for example, social marketing and communities)."