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Digital marketing budgets to grow

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A survey of marketing and advertising executives shows that the overwhelming majority (63%) of marketers now see digital marketing as having a high or very high level of strategic importance within the organization. Moreover, more than three-quarters (78%) of respondents said they planned to increase their budget for digital marketing next year.

The Digital Marketing Dialog Survey—sponsored by BtoB, the CMO Council and USA Today—was commissioned by Responsys, an e-mail marketing solutions provider. The e-mail survey was conducted between Nov. 13 and Dec. 3 and garnered 300 responses.

The survey found that new-customer lead generation is the top purpose of companies engaged in digital marketing. This motive, cited by 83% of respondents, outpaced both brand awareness and recognition (68%) and improved customer relationships (67%).

Respondents stated that digital marketing programs are gaining traction because they are less costly, quicker and easier to implement, quantify and analyze than traditional marketing campaigns. Perhaps as a result, the top components of digital marketing are shifting towards e-mail marketing campaigns (80%), Web site interactions and content delivery (73%). E-newsletters and online advertising tied at 69% in the digital marketing mix.

One of the newest digital marketing techniques, Webcasts and Web conferences, was cited by 27% of respondents as part of the marketing mix.

Other key findings reveal growing momentum and additional challenges for the digital and e-mail marketing channels.

• Spending on online marketing is expected to increase. Some 78% of those surveyed plan to spend more next year on digital marketing. In fact, the spend of the biggest proportion of marketers is expected to double—from 1% to 5% of the overall marketing budget this year—to 11% to 20% in 2004. And 37% of companies will spend more than 20% of their marketing budgets on digital marketing in 2004 vs. only 32% this year.

• Spam legislation, e-mail deliverability and privacy issues are affecting decisions. In the wake of recent anti-spam legislation and privacy issues, marketers are in a big rush to improve list quality, with half of all respondents saying that creating more qualified e-mailing list is a priority. Of the marketers surveyed, 42% are adopting opt-in policies, and 35% plan to adhere to new legislative developments. The top three e-marketing challenges to overcome are spam and filtering, e-mail inbox clutter and developing more qualified lists.

• Many marketers give themselves barely passing grades. More than a third gave their online marketing efforts a C grade or lower, admitting there is plenty of room for improvement to use online marketing more effectively.

• Improvements will come from integration and analytics. Top improvements marketers expect to boost their campaigns next year include integrating online and offline marketing, integrating e-mail campaigns with their Web sites, highly personalized interaction, and better customer profiling and analytics to determine campaign effectiveness.

To measure campaign effectiveness, these marketing professionals are relying on bottom-line metrics, such as Web site visits (54%), customer response rates (54%) and customer leads (53%), as well as click-throughs (52%). Somewhat surprisingly, nearly 10% said they were not measuring their digital marketing programs.

The survey tallied responses from nearly 300 global marketers and ad agencies across all major sectors. Most respondents were b-to-b companies (58%), followed by businesses that were a mix of b-to-b and b-to-c (29%). Some 60% of the respondents held the title of director of marketing, vp of marketing, CMO or CEO, at companies ranging from less than $100 million to more than $25 billion in annual revenue.

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