Signs point to marketers opening up their wallets for emerging digital technologies, placing bets on measurable channels such as email, search and social media, shifting resources toward consumer-facing technology, and spending wads of cash on content creation and aggregation.
But success is far from certain.
There’s no question marketing budgets are on the rise. More than half of business-to-business marketers expect their budgets to increase this year, compared to 31 percent of respondents who expected budgets to increase last year, according to a Forrester survey.
What’s Driving the Budget Increase?
What’s behind the increase in spending? Nine out of 10 marketers say digital marketing technologies, which make up a chunk of business technology (BT), are critical to success.
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“The CIO of one of the largest banks told me, ‘I have unlimited budget for the BT agenda,” Forrester CEO George Colony told attendees at Dreamforce last year.
Of course, the spike in marketing tech spending has attracted tech giants such as Oracle, which has been on a $3 billion marketing-tech acquisition spree, as well as a plethora of startups. Venture capitalists, too, are rushing to this feeding frenzy.
“In most companies, a CMO can write a million-dollar [operating expense] commitment in a heartbeat,” Ashu Garg, general partner at Foundation Capital, a Silicon Valley venture capital firm boasting big wins with marketing tech investments, told CIO.com last fall.
Follow the Money (or Try to)
Exactly where marketers are putting their dollars, though, isn’t clear.
For instance, a survey from Autopilot found that website, search engine optimization, branding and social media technologies are priority areas, not so much marketing automation. In contrast, a Forrester survey found that marketers’ top focus in terms of their budget is email marketing, followed by search marketing and display advertising.
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The Forrester survey shows marketers directing their budgets on “measurable efficiency channels.” However, a survey commissioned by Leapfrog Marketing Institute found that marketers plan to shift their budgets from channel and product-focused initiatives to consumer-focused ones, such as customer acquisition, retention, loyalty and CRM.
Another murky area is a marketer’s return on investment.
Many loaded guns are leveled at a marketer’s chances of success, according to Forrester. As with any emerging technology, the right skills are hard to find. Only 43 percent of marketers say they are able to find and hire people with the digital marketing skills they need.
The Realities of Digital Disruption
Marketers have also waded into unfamiliar technical waters. In other words, marketing technology and data analysis have upended their profession. Most marketers are still trying to wrap their heads around the complexities of technology and trying to separate hype from reality. Hence, there’s a real fear of failure.
Perhaps most frightening of all, the majority of marketers don’t really have a plan. They’re making reactive marketing tech decisions rather than strategic ones. In fact, Forrester says only 44 percent have a clearly defined and deployed digital strategy.
The bottom line: Lots of scatter-shot marketing dollars hang in the balance, while returns may prove to be elusive.