Companies will increase their digital marketing budgets by an average of 17% in 2010, according to new research by Econsultancy and ExactTarget today. The new report, Marketing Budgets 2010: Effectiveness, Measurement and Allocation, finds that digital marketing will account for 24% of overall marketing spend this year.
Social media is driving much of that increase - both onsite and offsite, Linus Gregoriadis, Econsultancy’s research director, tells MarketingVOX.
The increase in budgets marks a welcome rise in ad spend and online advertising - although Gregoriadis notes that it starts from a very low base. This year's survey also marks a departure from last year, when marketers stuck to the tried-and-true digital channels of email marketing or paid search - basically methods that had definitive metrics. This year, however, when Econsultancy asked about measurability of the different channels, marketers were not as concerned, Gregoriadis says.
"Companies are clearly investing in social media channels - areas where there is still a struggle to measure results. That is not to say that companies have no guideposts with these invests. Rather, they tend to rely on "softer" metrics, Gregoriadis says.
In general the most commonly used metric is increased sales, used by 79% of company respondents. The second mostly widely used metric is increased traffic to website (used by 71% of companies). Also, interestingly, brand reputation (41%) and brand recognition (39%) are used by less than half of companies as metrics. "Statistical analysis shows that there is a strong correlation between focus on brand reputation and likelihood to be shifting marketing budget from traditional to digital channels," the report says.