Thursday, April 11, 2013

Digital Marketing Budgets Up, Understanding Down

It’s no secret that digital marketing is a confusing topic. Companies know social media and mobile marketing are increasingly important, and invest heavily in both fields. At the same time, however, if a recent report is any indication, understanding of digital marketing ROI is dwindling.

The report, Marketing Budgets 2013, is a joint effort by industry analysts Econsultancy and Responsys. The annual report surveyed over 800 marketers. The results were a strange mixture of understanding and mystification.

Spending Up….

Digital marketing budgets are on the rise, with 75 percent of respondents planning to increase spending in 2013. In an encouraging move, 56 percent reported plans to increase budgets by over 20 percent. This is great news if you’re in the business of providing content marketing or SEO. Baltimore MD, Los Angeles, CA, New York, NY – wherever you’re located, you should see increased spending on digital marketing.

Content marketing’s growing importance was obvious, with 70 percent of respondents planning to increase spending on content, while 65 percent indicated they’ll increase their natural SEO result budgets. Email marketing spending came in third at 65 percent, with social media and mobile marketing coming in at 62 and 61 percent, respectively.

While in the top five, mobile marketing spending seems low, considering the field’s rapid rise in importance. Actually, it’s possible that the very speed with which mobile marketing is developing explains relatively low budgetary commitments; spending has yet to catch up with marketing potential.

…. Understanding Down

Despite ever-increasing spending on digital marketing, only 50 percent of survey respondents claimed a “good” or “very good” understanding of digital marketing ROI, while 18 percent reported “poor” or “very poor” understanding.

These numbers reflect a continuing decline in understanding over the last three years. The 2010 survey reported 67 percent of marketers had a firm understanding of digital marketing ROI, with only 10 percent claiming a poor grasp of the issue.

The industry, it seems, is at odds with itself. Almost everyone’s willing to accept the importance of digital marketing, but an increasing percentage of marketers lack the knowledge or skills to accurately measure social media’s value. Half the survey respondents are throwing large budgets at digital marketing and essentially trusting the return on investment will be positive.

That’s a dangerous game, because like any form of advertising, digital marketing comes with no guarantees.

Part of the problem may stem from the ever-growing, ever more complex nature of digital marketing venues. Not so long ago, mobile marketing was unheard of, and social media continues to defy traditional ROI measurement tools. Even so, any marketer reporting less than a good understanding of digital media strategies should be worried.

On the plus side, attitudes in the industry are changing. Marketers increasingly devote budget funds to training and education, so hopefully the disconnect between spending and ROI understanding will come to an end. At least, until the Next Big Thing takes the industry by surprise.

Adrienne Erin is an internet marketer who loves staying on top of the latest trends in SEO and marketing. If you want to see more of her recent work, follow her on Twitter: @adrienneerin.