More Marketing, More Channels: 2010 Moves To More Digital Waves

By Morgan Stewart, Director of Research & Strategy, ExactTarget
If 2009 marked the year when marketers began dipping their toes to test social media and mobile waters, 2010 will be known as the year when marketers began doing cannonballs into these emerging channels.

In fact, a collaborative research study conducted by ExactTarget and Econsultancy found that 66% of companies plan to increase their investments in digital marketing channels, which includes social, mobile, search, email, online display and affiliate marketing, in 2010. But what accounts for the meteoric growth of digital marketing efforts and what challenges will marketers contend with as they engage with these new mediums? Here are four trends that help explain how companies are investing their marketing dollars and why those companies are choosing to allocate their budgets across digital channels.

Going by the numbers
28% of marketers are shifting at least some of their overall marketing bud­gets from traditional to digital channels. At least part of the reason for the shift to digital marketing is that marketers find it easier to track the impact these channels have on hard financial metrics. In other words, marketers tend to take a more “scientific” approach to their allocation of digital marketing budgets than they do when allocating traditional marketing budgets. For example, 34% of marketers said digital marketing budgets are allocated based on “more science than art” compared to only 20% who allocate traditional marketing budgets based on “more science than art.”

This brand is our brand
Marketers who focus on “brand reputa­tion” as a measure of marketing ef­fectiveness are the most likely to be shifting budgets from traditional to digital channels. Not surprisingly, marketers who focus on this metric are more likely to be increasing their investments in social media such as Facebook and Twitter. They’re also more likely to be increasing investments in online display and mobile marketing, and less likely to be increasing investments in search engine optimization (SEO), affiliate marketing, and acquisition-based email (i.e., email to rented lists). The increased investments in retention-based email marketing (i.e., email to registered customers) is on par with other marketers.


Worth the risk
Even though marketers admit to having the most difficulty measuring ROI in social media and mobile marketing, these channels are most likely to get the nod for budget increases in 2010. In fact, Two-thirds of marketers are planning to increase investments in social media even though less than one-fifth can effectively measure ROI. For today’s marketers, it’s safe to say that the only thing that is more risky than engaging in social and mobile media is not joining the conversation in these popular mediums. So what’s the easiest channel through which ROI can be measured? Paid search. But while 51% of marketers plan to increase paid search budgets in 2010, 11% will decrease spending in this area.

Tried and true
Not surprisingly, the majority of marketers are able to effectively measure more established digital marketing channels like SEO and retention-based email. 64% of marketers plan to increase SEO budgets while 54% will increase retention email marketing budgets. When it comes to digital marketing budgets, marketers feel confident increasing their investments when efforts can be linked directly to their bottom line.

While marketers are increasingly optimistic about the opportunities digital channels provide, there are still a host of challenges and uncertainties that may limit their ability to take full advantage of these opportunities. Restrictive budgets, limited understanding or training in regard to digital marketing, and lack of staff are all impediments to an organizations ability to effectively utilize digital channels. But with marketing budgets set all that’s left to do is wait and see – no doubt, some valuable lessons will be learned.  To read more highlights from the 2010 marketing budgets study, download ExactTarget’s free two-page research brief here.

Morgan Stewart is Director of Research and Strategy for ExactTarget, a leading provider of on-demand email and one-to-one marketing solutions.  Morgan is responsible for conducting primary research on email marketing trends and best practices drawing from observations across the thousands of organizations that use ExactTarget to manage permission email marketing.