CMOs Predict Sizable Budget Shift to Digital Marketing

 

Source: April 30, 2013 by MarketingCharts staff
 

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Fresh on the heels of a report finding that 4 in 10 global marketers around the world will be reallocating budgets to digital marketing (a report which itself came shortly after a US-based studyindicating the same trend), a new study from Accenture has emerged looking at the topic from the perspective of CMOs around the world. And the takeaway is much the same: digital marketing is going to get more of the overall marketing budget next year. About 2 in 3 respondents said they would be devoting at least 25% of their budgets to digital marketing next year, up from 46% who said they would allocate that much this year.

What’s more, the majority of that increase comes in the “more than 50%” category. That is, fully 23% of CMOs surveyed plan to devote the majority of their budgets to digital marketing next year. That’s about double the 11% giving digital that much of the pie this year.

The reorganization of the marketing budget comes at a time when CMOs see big changes on the horizon. 7 in 10 respondents feel that the marketing function will fundamentally change over the next 5 years – with that figure higher among B2B2C (74%) than B2B-only (62%) companies.

CMOs may approach these changes with some amount of trepidation: separate results from the survey indicate that confidence in their preparedness is falling. That is, in 2012, 61% felt prepared, down from 66% in 2011. In 2012, CMOs also indicated more difficulty in improving the efficiency of their marketing operations and improving their workforce’s responsiveness to digital shifts and changing consumers.

In order to tackle those employee-relating challenges, CMOs say they’ll also be working on optimizing their internal skills, by emphasizing some areas over others. For example, next year 24% will dedicate 41-60% of their employees to digital marketing (up from 21% this year) and 26% will dedicate that share of their employee focus to customer analytics (also up from 21%).

That increased attention to digital is warranted due to its “game-changing” nature, say the researchers, for whom CMOs’ “ability to restructure the organization and work horizontally to deliver seamless and relevant customer experiences across all touch points all day and every day will be essential to [their] survival in the global marketplace.”

About the Data: The “2012 CMO Insights” data is based on an online survey across 10 countries with 405 senior executives who are key marketing decision-makers in their companies. Most companies have at least US$1 billion in annual revenues, although corporations in France, Australia, Singapore, and Brazil have revenues of at least US$500 million.

B2C and B2B2C corporations each represented 37% of the sample, with B2B companies the remaining 26%. Financial services was the most heavily represented sector (34%), followed by product companies (30%).

45% of respondents were based in Europe, Africa and Latin America, 40% were located in North America, and the remaining 15% in Asia-Pacific.

Brand Guide to Getting More Money for Digital

If you’re a digital marketer, one of your biggest challenges is convincing your bosses, steeped in the powers of traditional advertising, to devote more money to what in their eyes is untested methods.

After all, budgets are zero-sum games. More money to digital means less money for traditional marketing.  One key, veterans of these battles said, is putting yourself in the manager’s shoes, crafting a pitch that takes into account the manager’s reticence (a bonus is in the offing) and the overall goals of the organization.

Digiday spoke to brand and agency executives to get a sense of what brand managers need to include in their pitches to bosses to ensure they get their increase in digital budget.

It’s all about the Benjamins
According to John Leeman, CMO of Fresh Direct, to get an increase in digital budget, money needs to be taken out from more traditional channels that have already proved their worth. That’s why brand marketers need to make the case for digital, over something like TV, for example.

The key, he said, is explaining how the increase in digital spend will increase incremental sales and profits better than the marketing channel they’re trying to get the money from and be able to prove it.

“The proof needs to show up in the company’s earnings report too, not just in some Web analytics report,” Leeman said.

Extrasensory perception
Put yourself into your boss’ shoes, recommended Sam Niburg, senior associate brand manager at Campbell Soup, at the Digiday Brand Summit. There’s a lot of prep that needs to take place before this meeting with the manager. The brand marketer needs to be able to anticipate what the boss’s questions will be and needs to be ready to answer them. Do your homework.

“It’s all about anticipating what the manager’s agenda is and what their goals are. In most cases, that’s growth,” said Niburg. “If you can prove to them that you can deliver that growth, in a way you have not before, you will get them on board.”

Make the boss’s job easy
Nothing will better make your case than numbers that prove what you’re saying is valid. Case studies are a good idea too. Think of it this way: Your boss, after this meeting with you, then needs to bring her business case to her bosses. Provide her with everything she needs at your meeting: numbers, case studies, whatever you need to back up your claims.

“If you can preempt that, that would help,” Niburg said. “Do all the groundwork upfront.”

Media equivalence value: Speak their language
When you are pitching digital to people who are more proficient in traditional marketing, getting them comfortable with measuring the results in a language they are familiar with is key. There are ways to measure social and digital as if it was offline, according to Sebastian Gard, svp and director of social media at Arnold Worldwide.

“You’ve got to explain how buying this media can be comparable to buying this TV commercial, for example,” Gard said. “Buying this media will cost you this much, or running this Facebook page or online community will generate these types of page views, for example. This helps normalize the value of of whatever you’re pitching.”

The gift of gab
It’s not what you say, it’s how you say it. “Don’t pitch the technology alone, pitch the business benefit,” suggests Jonathan Stephen, head of mobile and emerging technologies at JetBlue.

In the end, it comes down to how this shift in budget will benefit your organization. Keep your brand and company goals in mind and match your initiatives to key business and organizational needs, even if your boss just wants to hit her numbers to get her bonus so she can buy a third car.

“Innovation is great, but not worth the money if you cannot tie it to a strategic goal,” Stephen said.

The Peril of Terrible Ads

Source: eMarketer, APR 26, 2013

Certain display ads draw ire

Marketers have long had to perform a tough balancing act—ensuring that they get their message out while stopping shy of annoying prospective customers. But a March 2013 survey of adult US internet users from InsightsOne revealed that ad messaging may need some fine-tuning to keep from turning off consumers. More than nine in 10 internet users reported encountering an annoying ad somewhere, according to the poll.

InsightsOne, which creates marketing analytics software, found that ads in emails and sidebars and on websites were the second- and third-leading sources of annoying advertising among respondents, trailing only TV. Respondents also found social media ads just as annoying as junk mail.

Among types of online ads, irrelevant pop-up ads irked the greatest percentage of respondents (79%). The next three most annoying digital ad types consisted of various types of spam. But nearly six in 10 respondents acknowledged being annoyed by ads for products and services they did not need or want, underscoring how important targeting advertising to its intended audience has become.

Of those who had been overwhelmed by online ad spam, more than one-third said they would leave the website they were on as a result. Six out of 10 were content to unsubscribe from future emails, while another 45% indicated that they would simply ignore new email messages from offending advertisers. More than one in 10 would either stop using the product advertised, or completely boycott the company who had bought the ads.

While it should be noted that many of the most annoying ad campaigns originated with the least legitimate advertisers, the reality is that all advertisers can suffer as a result of these poorly conceived and executed campaigns. Thoughtful marketers have to work to make sure their content is getting in front of the right people, and be careful that their messaging does not overwhelm potential customers and alienate them.

How Do Internet Users Divvy Up Their Desktop, Mobile Web Time?

Source: eMarketer, APR 25, 2013

Email gets more mobile time

The bite mobile is taking out of desktop internet use keeps getting bigger. The Media Behavior Institute monitored US study participants and found that the mobile phone and tablet were drawing down the percentage of internet users who turn to the computer in a given week: The percentage on desktop slipped by 5 points between the six-month period ending in July 2012 and the six-month period ending in January 2013.

As desktop’s reach falls, mobile’s reach rises. On average, 43.5% of participants accessed the internet via a mobile phone each week during the period ending in January 2013, an 8-percentage-point increase over the period ending in July 2012. Tablets grew their average weekly reach by 4 percentage points, used by 17% of participants at the end of the study period.

In terms of what activities internet users are engaging in on mobile vs. desktop, in Q1 2013 Experian Marketing Services found that US mobile internet users spent the greatest percentage of their mobile web time using email, a 23% share of time spent vs. only 5% of time spent on desktop. Social networking came in second on mobile, garnering 15% of time spent. Travel also occupied a greater share of time on the mobile internet (9%) compared with the desktop (1%).

On the desktop internet, activity was much more heavily weighted toward social networking, which accounted for 27% of time spent online. Entertainment was the second most popular activity, taking up 15% of time.

Mobile vs. desktop usage patterns will continue to change, especially as tablet penetration rates climb higher. In the US, 67% of mobile internet users surveyed by Decision Fuel and On Device Research in November 2012 said they mostly or only used mobile, as opposed to the desktop, to go online and surf the web. Only one-third stuck with the desktop either half or most of the time.

Tablet Adoption Up Among Senior Execs; 65% Use Them to Shop

Source: April 24, 2013 by MarketingCharts staff

DoremusFT-Global-Execs-Smart-Device-Use-Apr2013

Senior executives around the world are ratcheting up their use of mobile devices, find Doremus and theFinancial Times in their annual “Decision Dynamics” survey. Tablet adoption in particular has jumped, doubling in a year to 6 in 10 respondents, with use growing across all age groups. Tablet users appear more likely to engage in a variety of activities than smartphone users: for example, shopping is far more prevalent among tablet than smartphone users (65% vs. 24%). Not too surprisingly, though, use of QR codes is higher on smartphones than tablets (22% vs. 8%).

Aside from shopping, watching movies and video is far more common among tablet (54%) than smartphone (15%) users, according to the survey, although the gap is narrower for use of social media (49% and 37%, respectively).

Tablets and smartphones share the same top activities, though. Global execs report that checking the news (83% tablets; 70% smartphones); searching the web (81% tablets; 69% smartphones); and visiting websites (78% tablets; 69% smartphones) are their most common activities on each device.

Separately, the study reveals that global execs have a strong appetite for mobile applications, with 9 in 10 tablet and smartphone owners using them. Among regular tablet users, news (78%) apps rank as the most popular type, followed by weather and books/reading apps (each at 66%). Among regular smartphone users, navigation (70%), news (67%) and weather (66%) rank as most popular.

Other Findings:

  • North American execs are the heaviest users of mobile applications.
  • Execs aged under 45 report their top 5 tablet apps to be: news; communications; social media; books; and games. For those 55 and older, the top 5 are: news: navigation; weather; books; and finance.

About the Data: The survey was conducted online in late 2012 with over 400 senior level executives from a mix of industries and company sizes.