About 71 percent of marketing firms have reported that they plan to increase their digital marketing budgets this year, according to a new report by Econsultancy and Responsys.
The Marketing Budgets 2013 report says that marketing teams surveyed expect to increase their digital budgets by 28 percent on average. And around 56 percent of firms saying they will increase their digital budgets by over 20 percent within the year.
"The mass marketing era is dead. We've entered the relationship era. To succeed, companies will need to flip their approach to marketing on its head and design cross-channel strategies to deliver long-term relationships, not short-term transactions," says Responsys EMEA Senior Marketing and Alliances Director Simon Robinson in the report.
"The good news is that marketing budgets are shifting accordingly. Successful marketers in the relationship era will be those who dedicate more resources toward forging real, individual relationships with their prospects and customers."
The Econsultancy and Responsys report found that only 20 percent of marketing firms surveyed will be expanding their offline marketing budgets. Those firms reporting expansion will increase their offline budgets by 26 percent.
The most common digital channel to see an increase in funding is reported to be content marketing. Over 70 percent of those who responded to the survey said they will increase their digital content marketing budgets within the next 12 months.
Other channels expected to see more funding include digital analytics and content relationship management (CRM) budgets. About 46 percent of those surveyed said they will increase their analytics channel. While 45 percent said they expect to boost their CRM budgets by year's end.
Of agencies surveyed, 71 percent said they plan to recruit new staff to their digital marketing team as part of the increase in funding. Lack of proper staff in the digital marketing realm was reported to be a major barrier to bringing more investment into digital marketing channels.
"The ability to hire staff to fully capitalize on investments made in the relationship era is not easy. The research shows that this is having a negative effect on digital investment with firms reluctant to purchase technology because they feel they lack the human capital to maximize the value of that investment," comments Robinson.
"The rapid pace of change means that developments in mobile, social and analytics are emerging faster than organizations can up-skill to keep pace. To fill this gap, companies need to start seeking marketers who can think beyond the campaign level and develop smart cross-channel programs that resonate with the consumer."
Despite the increase in digital budgets, many marketers reported having a questionable understanding of digital marketing metrics. Only 50 percent of those surveyed reported they have a good, or very good understanding of return on investment (ROI) metrics for digital channels.
That number represents a 5 percent decrease from 2012 when 55 percent of those surveyed reported they had a grasp on ROI metrics. It also marks a rapid decline from 2010 when 67 percent of those surveyed said they have at least a good understanding of ROI.
The study comes from surveys filled out by 834 client-side marketers and agencies. Surveys were filled out during December 2012 and January 2013.
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James is a freelance writer and editor. In addition to ClickZ, his work has appeared in publications like V3, The Commonwealth Club, CachedTech.com, and Shonen Jump magazine. He studied Journalism at Weber State University.
March 19, 2014