How companies are allocating their digital marketing budget

Wondering how much budget to allocate for your digital marketing? Gartner, an US based technology research company conducted a research among over 200 marketers from US based companies with more than $500 million in annual revenue, across 6 industries to understand how they are allocating their marketing budget and which activities are attributing to their success. Here are the key points from the report:

1. 10.4% of the 2012 revenue was spent on marketing and the budget is slated to increase by 6% in 2013

2. Digital marketing spending average 2.5% of the company's revenue 

Note: Data was gathered from responses to the following question: What percentage of your organization's total marketing expense budget is allocated to digital marketing in 2012?

Source: Gartner (March 2013)

3. Digital advertising accounts for 12.5% of digital marketing budget and 11.6% on content creation and management  

Content creation and management account for the second largest share of the digital marketing budget. As customers use more digital channels for collaboration, research and acquisition of products and services, the enormous pressure to create, manage and distribute content will multiply with time, demanded greater allocation of budget. 

In 2013, top 4 priorities in digital marketing spends will be: e- commerce, social marketing, content and mobile marketing.

4. Surprisingly 41% of the marketers say that savings from digital marketing are reinvested 

Reinvesting savings into digital marketing activities is a smart move and a fairly recent phenomenon. The predominant trend is to use technology only to cut costs. 

5. 50% of digital marketing activities are outsourced 

Digital marketing is a specialized job and marketers are leaning on external teams for support for activities such as search marketing, online advertising, mobile marketing and in many cases even social media marketing. Marketers are realizing that keeping consumers engaged through social channels require constant feeding and nurturing with new content which is both time consuming and as specialized as area as monitoring and analyzing social activities.

6. 70% of the companies have a Chief Marketing Technologist. 80% of them report to marketing. 

Marketing's dependence on technology has created new roles within the organization. Chief Marketing Technologists are familiar with marketing and technology. They have 3 predominant functions:

• They wear their technology hats to design a uniform customer experience across channels such as social, mobile, commerce and website to attract, acquire and retain customers
• Integrate data generated externally as well as internally to get a better understanding of their customers
• Support marketing campaigns and programmes such as a mobile app, paid search marketing and social marketing.  

7. Over 40% say Corporate Website, Digital Advertising and Social Networking is key to their corporate success

Not surprisingly, corporate website and digital advertising both ranked as the top digital activity for marketing's success. Social media emerged as the next most important activity.