Enjoy the read, TCB360 Smart Business Network listeners – LaTanya Junior, Your Brand Friend!
Despite increasing pressures to prove their worth, American CMOs continue to have difficulty quantitatively demonstrating the impact of their activities, according to a recent study. Now, a newly-released survey [download page] from Econsultancy and Oracle Marketing Cloud that analyzes global marketers’ ability to measure ROI from a variety of digital channels finds that there is only a single discipline that most marketers rate themselves “good” at measuring.
The survey – fielded predominantly among European marketers, who made up three-quarters of the sample – found that 52% of company respondents consider themselves “good” at measuring ROI from paid search (PPC). Similarly, 53% of agency respondents rated their clients’ ability to measure the ROI from paid search as “good.”
No other discipline was able to crack 50% of respondents rating themselves “good” at ROI measurement. In fact, email marketing (for acquisition) was the only other channel for which respondents (both marketers and agencies) were more likely to rate themselves as being “good” than “okay.”
On the other end of the spectrum, just 13% of company respondents rate themselves as “good” at being able to measure the ROI of video advertising, and just 12% of agency respondents agreed with respect to their clients. By one measure, though, content marketing fared even worse: a plurality 43% of company respondents rated themselves “poor” at measuring content marketing’s ROI. That was the only channel of the 19 identified in which more respondents considered themselves “poor” than “okay” (41%) or “good” (16%).
Social media investment also appears to be a pain point, according to marketers and agencies, echoing the sentiments of US CMOs as noted in the study referenced above.
Despite those difficulties, inability to measure ROI is not the primary hindrance to increased digital marketing investments, per the Econsultancy study. Instead, marketers were most likely to say that a restricted budget for all types of marketing prevents more investments in digital, while a lack of staff to make the most of digital investments was the second-most cited barrier. Interestingly, agency respondents see a lack of understanding about digital and company culture as the biggest impediments to clients investing more money in digital.
That’s not to say that there’s not money flowing to digital marketing, though. Instead, this latest annual study finds digital marketing budget expectations to be at their highest point since the survey’s inception in 2010, as 77% of respondents plan spending hikes this year, up from 71% in last year’s survey. Of note, 71% of company respondents agree that it has become easier to secure boardroom buy-in for increased digital marketing budgets, an increase from 64% last year.
Moreover, despite the challenges in measuring ROI, budget enthusiasm for content marketing leads all others, with 73% of company respondents planning to increase spending on content marketing this year. Many are similarly planning budget hikes for lead generation (68%, up from 60% last year), SEO (60%, down from 63% last year), and email marketing for engagement and retention (60%, down from 62% last year). Fewer than 4 in 10 anticipate spending increases for sales enablement (39%) and affiliate marketing (38%), though.
Meanwhile, paid search occupies the single largest share of company marketers’ digital marketing budgets, at 13%, followed by content marketing (10%).
Not surprisingly, it’s a different story for offline channels, slated for spending increases by just 28% of company respondents. Among offline channels, live events (38%) comprise the area cited by most respondent companies for budget increases, though a plurality (46%) will keep their event budgets steady. This is most likely tied to the B2B sample; in North America, in-person events capture the largest share of B2B budgets and are said to be the most effective content marketing channel.
Still, despite all the increases forecast for digital marketing over the past few years, respondent companies estimated spending 38% share of their total marketing budgets on digital, a figure which is unchanged from last year. Additionally, digital is this year estimated by company marketers to account for 34% of total revenues, down slightly from last year’s 35% average.
Overall, company respondents estimated that 39% share of their digital marketing budgets go to paid media, with 35% to owned media and 26% to earned media. As far as budget increases go, earned media gets the nod (71% of company respondents) over owned media (67%) and paid media (61%).
Finally, acquisition marketing continues to be favored over engagement/retention as an investment focus, echoing results from a separate Econsultancy survey released last year. In fact, the investment focus on acquisition appears to have increased over the past couple of years at the expense of engagement and retention.
About the Data: The Econsultancy / Oracle Marketing Cloud Marketing Budgets 2015 report is based on a survey of almost 600 client-side marketers and agency respondents. Information about the online survey was emailed to Econsultancy’s user base of digital professionals and marketers, and promoted online via Twitter and other channels during December 2014 and January 2015.
A total of 588 respondents took part in the survey, including 58% who are client-side marketing professionals and 42% from the supply-side (including agency marketers, consultants and those working for technology vendors or other service providers).