After a double-digit increase the previous year, digital marketing budgets are projected to make another substantial leap in 2014 as more companies try to mine online customers for revenue.
Gartner Inc., an information technology research and advisory company, forecasts a 10% hike in digital marketing budgets this year, according to its survey of marketing executives released.
On average, survey respondents said their companies spent 10.7% of their total revenue on marketing efforts in 2013, with digital marketing spending averaging 3.1%. Some companies spent much more – 11% of respondents indicated they spent more than half of their marketing budgets on digital platforms, compared to 3% in 2012.
The biggest portion (12.2%) of digital marketing dollars went to digital advertising in 2013, followed by spending on company websites, Gartner reported.
The shift toward digital marketing reflects the growth of online activity, particularly e-commerce. An estimated 86% of American adults use the Internet, up from just 14% in 1995, according to a 2013 report by the Pew Research Internet Project.
Overall, digital marketing accounted for an average of 28.5% of total marketing budgets in 2013, Gartner reported.
The digital push also has created a growing job category: Gartner’s survey found that 81% of organizations now have a chief marketing technologist on staff, compared with 70% in 2012.
Those employees typically help determine how to allocate digital marketing dollars in order to maximize a company’s return on investment (ROI). Those decisions can involve placing digital advertising to designing, developing and maintaining corporate websites.
Gartner’s survey, which was released in April, queried 285 individuals working at companies averaging more than $500 million in annual revenue and spread across eight industries, including financial services, insurance, communications, retail, media and healthcare.
Respondents also said that they planned to invest in mobile marketing in the coming year.
As of January 2014, 90% of adults in the United States owned a smartphone and 58% of those individuals own a smartphone, Pew Research found. Smartphone users tend to be younger, better educated and more affluent.
Given the prevalence of smartphones, “marketers are compelled to develop mobile strategies that ensure their products and services can be found, and purchased, by consumers on the go,” Gartner’s research vice president, Michael McGuire, said in a statement.