Digital spending currently accounts for roughly one-quarter of enterprise marketing budgets, finds a new study [download page] from Econsultancy and Teradata, but that figure is expected to increase to about 40% by 2019. The shift taking place in the near-term isn’t the result of a decline in traditional media budgets, though, as more enterprises plan to increase than decrease their traditional budgets over the next year. It seems, instead, that digital spending is simply growing more quickly.
Indeed, some 69% of respondents plan to increase their digital marketing budgets over the next year, by an average of 14%. By comparison, relatively fewer (48%) expect their traditional budgets to increase, by an average of 9%. And, while just 6% expect their digital marketing budgets to decrease (by an average of 5%), almost 5 times as many (29%) see a decline in traditional budgets on the horizon (for an average of 10%).
This migration to digital media follows a wider trend, reported in both the US market and by marketers the world over. The pace of change has been rapid enough to convince most marketers that digital spend will soon overtake traditional budgets, though it’s worth noting that the Econsultancy and Teradata study still finds that traditional will control the majority of budgets 5 years from now.
The report also contains some interesting data regarding how digital marketing budgets are typically being allocated in the enterprise. Paid media takes the largest portion (33%), followed closely by owned media (31%), with technology (16%), earned (11%) and measurement and analytics (9%) capturing smaller shares of the overall digital budget.
Breaking the data down by channel, the study reveals that:
- Digital advertising comprises 17% of the average digital channel budget;
- Search marketing is next, at 16%, followed by;
- Content (15%);
- Website (14%);
- Social (11%);
- Email (10%);
- Mobile (7%); and
- Other (10%).
There are also some intriguing patterns shown when sorting by industry:
- Automotive is investing more in display at the cost of email;
- CPG/FMCG is investing more in content at the expense of search;
- High tech is investing more in search at the cost of display;
- Media is investing more in content at the expense of search;
- Retail is investing more in affiliates at the cost of content; and
- Travel/hospitality is investing more in search at the expense of content.
Overall, the channels slated by the largest share of respondents for increases are mobile (76% increasing), content marketing (70%) and display ads (64%). By contrast, only 37% are expecting to increase their social budgets next year.
About the Data: The report is based on a survey of 402 senior marketers from global organizations. All respondents are with companies having more than $500 million in revenue, with 56% having revenues over $3 billion.
Respondents were from a wide variety of industries, with an emphasis on automotive, consumer goods, consumer technology, retail and travel/hospitality. Only respondents who reported that they were decision makers or influencers in the marketing budget allocation process were shown budget-specific questions. Other respondents were asked questions about digital marketing and related technologies as well as corporate priorities and challenges.
The survey was conducted in July of 2014, using a questionnaire developed by Econsultancy.