CMOs Say Digital Cannibalizing Budgets From Traditional Media

March 30, 2012

dataxu-budget-shift-traditional-to-digital-march2012.jpgAlmost three-quarters of enterprise decision makers report a shift in budgets from traditional advertising to digital in the past year, according to [download page] a March 2012 report from DataXu. These shifts are not minor, either: in fact, about one-third of those say that more than half of their budgets have shifted from traditional to digital marketing, while an additional 23% report between 26% and 50% of their budgets moving to digital. And this trend appears not to be short-lived, as more than 4 in 5 who have seen an internal shift expect it to continue in the next year.

This same trend from traditional to digital was also reported in a report released in February 2012 by the Society of Digital Agencies (SoDA), conducted by Econsultancy. According to those findings, although client marketers said traditional media still makes up the majority of their budgets, only 22% of respondents forecast increases in traditional media spending this year compared to 2011, while half expected to increase their paid digital media spend, and two-thirds their earned digital media spend. On the same note, 38% expected to decrease their investment in paid traditional media, compared to just 16% for paid digital media, and 9% for earned/owned media.

And while a majority of respondents to a PointRoll survey released in March said they would be increasing their budgets for a variety of digital channels, respondents were more likely to say they would scale back their traditional marketing or ad budgets this coming year than to increase them (21% vs. 15%).

Measurability and Engagement Among Top Factors

When asked which characteristic of digital marketing prompted their shift, the most common reason cited by respondents to the DataXu survey was increased measurability and accountability (20%), slightly ahead of increased customer engagement (18%) and lower cost of customer acquisition (16%). Roughly 1 in 10 also cited lower cost per lead, and 7% indicated that lower cost of impression was a driving force.

7 in 10 Say Outcomes Have Improved

Data from “Marketing in the Digital Age: Competing on Big Data & Analytic” indicates that marketers are happy with the outcomes of their decisions over the past year, although the study points out that this remains an early point in the migration of budgets and activities from traditional to digital marketing. 7 in 10 respondents either strongly agree (30%) or agree (39%) that marketing outcomes have improved over the past year, compared to just 12% who disagree. Similarly, roughly three-quarters either strongly agree (30%) or agree (46%) that they have increased their marketing efficiencies, though DataXu insight suggests that given the immense amount of data available to them, marketers’ efficiency bars will likely continue rising, and that they simply may not know what they do not know at this stage.

Other Findings:

  • The majority of respondents agree that they have implemented successful cost cutting initiatives, better forecast marketing results, and optimized leads for quality or value in the past year.
  • Marketers are more likely to say that marketing staff (28%) participate in making digital marketing technology recommendations than the CMO (17%), the IT department (14%), and the VP of digital (11%).

About the Data: The 2012 Digital Marketing 2.0 Studywas conducted between December 2011 and February 2012 among 350 enterprise decision makers. The survey, commissioned by DataXu, was conducted by Human 1.0 and the Society for New Communications Research (SNCR). Respondents included decision makers in management, marketing, communications, digital, IT and social media functions.

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