Gartner: Digital Marketing Comprised 2.5% of Company Revenue In 2012 To Rise 9% In 2013

Digital marketing budgets averaged 2.5 percent of company revenue for 2012 and are expected to increase nine percent in 2013, according to a Gartner survey of 250 marketing executives in U.S.-based companies with more than $500 million in annual revenue. That’s approximately $5.7 million in digital marketing (per $500 million-annual revenue company) for 2013.

“While digital marketing has been a growing area of investment in many organizations for a decade, the scope is increasing and the techniques are maturing,” said Yvonne Genovese, managing vice president of Gartner for Marketing Leaders. “However, increased funding is a double-edged sword as it brings new opportunities, but it also puts more pressure on marketers to measure and attribute investments to revenue and profit growth.”

Additional results of the survey include:

  •  10.4 percent of annual revenue is spent on overall marketing activities including salaries, advertising research, agencies and software as a service.
  •  The six industries covered in the $500 million revenue survey include financial services and insurance, high-tech, manufacturing, media, retail and healthcare.
  •  Respondents are spending between 10 percent and 50 percent of their marketing budget on digital marketing activities, with the average at 25 percent.
  •  Improving commerce experiences is the activity that will get the largest budget increase in 2013.
  •  On average, 28 percent of marketers say they have reduced their traditional advertising budget to fund digital marketing activities.
  •  When asked to identify how they are funding their digital marketing activities, two in five marketers said they realized savings from digital marketing compared with traditional techniques, and they are taking that money and reinvesting it into their programs.
  •  The corporate website and digital advertising were both ranked as the top digital marketing activities for marketing’s success, while social marketing emerged as the next most important activity.

“Digital advertising accounts for the largest share of digital marketing budgets at 12.5 percent, while content creation and management account for the second-largest share,” said Laura McLellan, research vice president at Gartner. “Marketers today are emphasizing the use of content marketing as part of a shift to drive more inbound marketing. While outbound marketing emphasizes finding audiences and delivering messages to them (for example, digital advertising and email marketing), inbound marketing focuses on techniques to get found by potential customers and create an ongoing dialogue with them (for example, social marketing and communities).”

G2Market’s Inside Scoop: Digital marketing growth that reaches 9% of revenue is a huge deal and reflects the growing value of the channel. But when companies start throwing cash at any project – the stakes rise dramatically, as does accountability. Simply put, in the digital marketing gold rush it’s all about delivering bottom-line benefit. Content is still king, and marketers will need to ensure a steady stream of high-quality, fresh, compelling content to drive digital marketing objectives. Social media is an essential tool for brand building and customer contact, but don’t forget the power of corporate websites.

(For additional information contact: Gartner, 203-964-0096, www.gartner.com.)

- Carl Cooper
G2Market