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Savings Fuel New Digital Spending

Nearly half of marketers say savings let them spend more on digital

March 25, 2013

Many factors are driving marketers to put a growing portion of their budgets into digital, including better metrics, targeted outreach and the basic imperative to meet consumers where they spend their time. But another factor is also working in digital’s favor: savings.

Gartner surveyed marketers at 250 large US companies about the marketing spending landscape. On average, respondents said they spent 10.4% of company revenues on marketing activities in 2012. Of that budget, 24%, or 2.5% of total revenues, was spent on digital media initiatives, with the rest spent on traditional media.

Digital and Total Marketing Budgets in 2012 Among US Companies in Select Industries (% of revenues)

eMarketer estimated in December 2012 that digital accounted for 22.5% of total media ad spending that year, relatively close to the spending breakdown found by Gartner.

For 2013, marketers are expecting to increase overall marketing budgets by an average of 6%, Gartner found. Although a range of sectors will be increasing advertising spending, increases are expected to be largest in media and retail, and smallest in “high-tech” and manufacturing industries.

Average Growth in Marketing Budget in 2013 Among US Companies in Select Industries (% change)

According to Gartner, much of that increase in digital spending will come from marketers reinvesting cost savings. When asked how they were funding their digital marketing programs, 41% answered that they were saving money by replacing traditional tactics with digital tactics, and that this savings was funding further investment. Another 28% responded that they decreased traditional marketing budgets to free up funds for digital.

Last year, digital advertising was the single largest line item in marketers’ budgets, accounting for an average of 12.5% of digital spending. Another big 2012 focus: content creation, which absorbed 11.6% of digital budgets. Corporate web design, search marketing, email and analytics all also received significant budget share. Video and mobile both came out on the lower end of the budget priority list, with the spending share of each in the mid-single digits.

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