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20/03/2012

Marketers Shifting Budgets from Traditional to Digital Media

Sourced from Marketing Charts.

Client marketers are shifting their budgets from traditional to digital media, although it is rarely a 1-to-1 exchange, according to a report released in February 2012 by the Society of Digital Agencies (SoDA), conducted by Econsultancy.

Although traditional media still makes up the majority of marketers’ budgets, only 22% are forecasting increases in traditional media spending this year compared to 2011, while half expect to increase their paid digital media spend, and two-thirds their earned digital media spend.

On the same note, 38% expect to decrease their investment in paid traditional media, compared to just 16% for paid digital media, and 9% for earned/owned media.

Digital Marketing Spend Climbs, Slowly

Digital marketing spends are growing, albeit slowly. This year, one-third of respondents project digital channels to make up 60% or more of their marketing budgets, up slightly from 31% in 2011. On a broader level, though, 62% expect to spend more than 30% of their marketing budgets on digital channels, representing a 17% increase from 53% in 2011. Concurrently, the proportion forecasting a spending level of just 0-9% dropped 19% from 21% to 17%.

Brands Look to Grow Internally

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Brands are more likely to look internally to expand their digital marketing and communication initiatives: 62% said they would increase internal resources for these purposes, compared to 42% who said they would increase external resources. 28% said they would diversify agency partnerships and select agencies based on areas of expertise, while 19% will look to consolidate their agency partnerships.

This focus on specialization rather than a “one-stop shop” partner is supported by survey findings from RSW/US, released in January 2012. Results from that survey show that three-quarters of marketers rank specific sector experience between a 7 and 10 on a 10-point scale of importance (with 10 being the most important) when looking for a new agency. In fact, the highest proportions of respondents rank sector focus a 10, 9, or 7 (all at 20%) in importance when looking for a new agency, compared to only 8% combined ranking it a 4 or lower.

Digital Communication Skills at a Premium

Meanwhile, data from the SoDA “Q1 2012 Digital Marketing Outlook” indicates that blog writing, editing, and copywriting skill sets are in high demand, with 61% of respondents citing them as an increased priority this year, with a further 37% saying they are an ongoing priority. Other skill sets that are increasing in importance for a majority of respondents are mobile application development (57%), digital brand management and measurement (52%), and mobile site development (50%), with social media marketing (49%) following closely.

Skill sets with the least amount of demand this year are social community site management and digital advertising creative development, slated as increased areas of priority for 37% and 36% of respondents, respectively.

Other Findings:

  • Word-of-mouth and online video are the leading areas respondents where anticipate focusing their earned media digital marketing efforts in the coming 1-2 years.
  • Branded social channels tops the list of anticipated owned media digital marketing efforts in the coming 1-2 years.
  • In terms of paid media priorities, interest in web display, mobile banners, and in-game ads has declined, while brands plan to focus on paid search, video ads, branded content, and sponsorships.

About the Data: Conducted by Econsultancy, SoDA’s Digital Outlook Marketing Survey had 651 respondents. 53% were marketing representing corporate brands (25%), consumer brands (30%), and other related industries (45%). The remaining 47% were creative service leaders from traditional agencies (23%), digital agencies (64%), and production companies (13%). More than three-quarters of the respondents were key decision makers and influencers such as CMOs, senior executives, VPs, and directors, with annual marketing budgets ranging from under US$1 million to over US$100 million, and whose key markets are North America (57%), Europe (19%), and Asia Pacific (11%).

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