Avg. Digital Marketing Budget: 2.5% of Revenue

According to a March 2013 Gartner survey, digital marketing budgets average 2.5 percent of company revenue, and these budgets are expected to increase 9 percent in 2013.

The survey found that, on average, companies spent 10.4 percent of their annual 2012 revenue on overall marketing activities; these expenses include salaries, advertising research, agencies and software as a service (SaaS).

These findings are included in Gartner’s U.S. Digital Marketing Spending report that is based on a survey of more than 250 marketers from U.S.-based companies with more than $500 million in annual revenue, across six industries (financial services and insurance, high-tech, manufacturing, media, retail and healthcare). The survey was conducted in November and December of 2012. The report examines how marketers are allocating their budgets, what activities are contributing to marketing success and other factors.

“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.”

The majority of survey respondents are spending between 10 percent and 50 percent of their marketing budget on digital marketing activities, with the average at 25 percent.

“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).”

Improving commerce experiences is the activity that will get the largest budget increase in 2013. The focus on commerce experiences will be in improving the ability to find the commerce site and the shopping experience. It will also include strategies to embed commerce in digital marketing channels such as search, social and mobile.

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. On average, 28 percent of marketers say they have reduced their traditional advertising budget to fund digital marketing activities.

Learn more about the survey and it’s methodology on the Garner survey press release.

About Gartner

Gartner, Inc. (NYSE: IT) is the world’s leading information technology research and advisory company. More at www.gartner.com.

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