Retailer Digital Marketing Spending to Increase across all Channels in 2012

While traditional digital channels such as search and email continue to dominate retailer marketing spending, social and mobile channels are growing in importance. Marketers are also seeking to improve data analytics capabilities to identify the most profitable channels and design the optimal marketing mix for driving engagement and sales. These are the top-level findings of a recent survey of 110 retailers conducted by Lauren Freedman and the e-tailing group, an e-commerce consultancy for merchants.

Emerging channels gaining traction

When asked how they are likely to allocate their 2012 digital marketing budget, retailers surveyed identified paid search (30%), email (18%) and SEO/natural search (11%) as their top priorities, but deeper questioning revealed that these priorities may be shifting. In the coming year, retailers said they may shift these priorities in response to changing dynamics in today’s marketing landscape with plans to allocate more spending to SEO/natural search, social strategies (blogs, social networks), email, and retargeting/behavioral marketing. Regarding revenue generation, merchants surveyed said that they expect top-performing channels will be SEO (31%), Mobile (mCommerce, iPads, mobile application – 30%) email (22%), paid search (22%) and social media (14%).

Asked specifically about mobile and social channels, retailers surveyed said they employ or plan to employ the following:

– Facebook: 87% employ today, 8% plan to employ in next 12 months
– Twitter: 82% employ today, 8% plan to employ in next 12 months
– mCommerce site: 29% employ today, 42% plan to employ in next 12 months
– Bar codes/QR codes: 38% employ today, 31% plan to employ in next 12 months
– Mobile application: 19% employ today, 27% plan to employ in next 12 months

Need to strengthen use of data in 2012

The survey also revealed that digital channels have provided merchants access to a wealth of information about consumer preferences and behavior, but the flood of data overwhelms the majority of retailers. Less than 10% surveyed said that they are in an ideal situation to tap into the data they have to effectively market to their customers and prospects. When asked an open-ended question about the “#1 thing you would do to elevate your current marketing strategy,” retailers surveyed reported the following as the top areas for improvement:

18%: Marketing resources-staffing, funding
13%: Consumer behavior insights/CRM/data
13%: Reporting, analytics
11%: SEO, search-paid, local
8%: Segmentation, targeting

“With a growing need to market across channels, particularly mobile and social, retailers will need marketing solutions that allow them to not only run cross-channel campaigns, but also to leverage the wealth of data at their disposal to improve engagement through relevant marketing,” says Lauren Freedman.

“We are seeing many of our customers move in this direction,” says Joe Colopy, CEO of Bronto Software, adding, “Retailers are realizing that marketing based on customer preferences, interests and behaviors drives greater interaction and is more likely to result in repeat purchasing.”
About the survey

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