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Digital marketing budgets to grow in 2014

26/06/2014

A new report from international analysis firm Gartner has suggested that digital marketing budgets are set to enjoy yet another boost over the coming 12 months, having recorded double-digit growth throughout 2013.

The company’s Digital Marketing Spending report is based on a survey of 285 individuals located in the US - however, only 21 per cent reported American-only data, with the majority of them speaking on behalf of a large, multinational institution.

With the British economy looking as if it is on the up, it seems reasonable to extrapolate that similar levels of growth could occur throughout the UK’s marketing sector, particularly given the industry’s stated desire to improve its digital capacity over the coming years.

Gartner questioned businesses within the financial services and insurance, high-tech, communications, manufacturing, media, retail, government and healthcare industries.

On average, companies spent 10.7 per cent of their annual 2013 revenue on general marketing activities, with digital accounting for 3.1 per cent of that figure. This is expected to grow by roughly ten per cent over the next 12 months, indicating just how rapidly the shift from traditional to high-tech advertising is occurring.

Yvonne Genovese, managing vice-president at Gartner, said bigger budgets are being secured by marketing leaders as they attempt to attract and retain customers through an innovative, engaging approach.

"Digital marketing is taking an increasing share of the marketing budget with annual digital marketing operating budgets totalling 3.1 per cent of a company's revenue in 2013, as compared with 2.6 per cent in 2012, representing a 20 per cent increase," she added.

Customer experience

Both in the US and abroad, customer experience - the way in which people interact with a particular brand or service, either online or offline - is becoming central to the marketing function.

This is clear in the fact that 77 per cent of companies now have a chief customer officer or an equivalent figure within their organisation, whose main role involves assessing how service users or buyers interact with them.

"Customer experiences with a brand or organisation span so many channels - both online and off - that [people] have come to expect consistent experiences, no matter where an interaction initially takes place," said Laura McLellan, also a research vice-president at Gartner.

She added: "Customer touchpoints include websites, mobile apps, social profiles, directory listings, on-site search, email interactions, communities, call centre 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."

While not every organisation will need to bring in someone with that specific job title or managerial function, most companies of a reasonable size will be hoping that they have the talent and expertise needed to provide a consistent and engaging experience to potential buyers.

In the UK, service providers such as banks and legal firms have recently come to realise the importance of customer engagement and experience, which is particularly important for the former in the wake of the various scandals that emerged over the last few years with regards to the mis-selling of complex insurance products and other services.

This means bringing in staff with the knowledge of helping develop a strong customer experience and building up brands that are considered consumer-friendly is likely to be a popular move over the course of 2014.

Technology will be crucial

As has been predicted in the past, the development of consumer-focused marketing will happen hand-in-hand with an increased use of high-tech analysis and prediction tools.

With this in mind, 81 per cent of businesses now have a chief marketing technologist, up from just 70 per cent in 2012.

Jake Sorofman, research director at Gartner, argued that digital marketers need to become as responsive as possible if they are to connect with consumers, particularly as they become more tech-savvy and capable of finding out information independently.

"This requires a marketing technology leader who understands the requirements and issues associated with joining together disparate data sources and technologies, and who has a vision for future marketing requirements," added Mr Sorofman.

Mobile is also likely to play a big role in digital budgets and hiring aspirations as some of the cautions previously seen in this area begin to melt away and firms become more willing to invest, the Gartner study concluded.

Marketers in the US and abroad need to make sure consumers can access their products or services while out and about, especially thanks to the increased proliferation of smartphones. This could also have an impact on hiring plans.

Tags: Digital

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