Digital marketing activity rising yet skills and metrics remain a challenge

New research into emerging trends in digital marketing produced by Sitecore and First Point Research and Consulting finds majority of companies in Australia are planning to spend more on digital marketing in 2014, yet metrics remain inadequate

Senior marketers may have their heads around digital marketing, but unless they invest in better training for junior staff and stronger metrics, they won’t get the most out of these new channels, an analyst claims.

Jane Briggs, founder and principal research director at First Point Research and Consulting, made the comments at a press launch marking the release of her Emerging Trends in Digital Marketing report, produced in partnership with Web content management vendor, Sitecore. The research was based on a survey of 330 client-side marketers across Australia and New Zealand.

While recent global research has suggested digital marketing is taking over as the dominant method of activity, Sitecore’s survey found offline still represents 61 per cent of total marketing spend. Of the 39 per cent invested in digital marketing channels, 55 per cent was from small firms with annual revenue of less than $2 million.

Briggs attributed this to their smaller marketing budgets as well as the potential to earn “more bang for their buck” through digital activities. Things are changing, however, and 73 per cent of total survey respondents plan to increase spending on digital-based activities in the next 12-18 months.

“The larger companies are finally investing more and catching up,” Briggs said, adding 75 per cent of companies with $20m or more in annual turnover plan to spend more on digital marketing this year.

Holding back the shift from offline to online are budget constraints (51 per cent of respondents), followed by a lack of understanding/education about digital marketing (34 per cent).

What’s interesting is where the knowledge gap around digital marketing lies. According to First Point, marketers who have less than five years’ experience in the field, and who are expected to understand new channels like social media intuitively, are less confident about their digital marketing abilities than counterparts with 15 years or more in the field.

For example, of the 17 per cent of marketers who rated their skills in digital marketing “excellent”, just 13 per cent were individuals with less than five years’ experience.

“The ‘top of the tree’ [marketers] are getting well-versed in digital marketing, and assuming the junior teams know how to do this successfully and are up on this area, but the juniors aren’t as comfortable in terms of knowledge,” Briggs said.

One reason could be that 38 per cent of less experienced marketers have had formal training in digital marketing, compared with 54 per cent of those with at least 15 years’ experience, she said. In total, 40 per cent of marketers said they had undertaken training courses in digital marketing.

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Another big hurdle is the way marketers measure digital marketing activities. The research found 73 per cent are still relying on number of visitors to their website to indicate success, rather than longer-term customer lifecycle or satisfaction KPIs.

Alarmingly, more than one-third of respondents are either not measuring digital marketing ROI at all, or are tracking ROI but remain unclear about how to use the analytics information. Nearly 50 per cent are also only discussing analytics around digital marketing activity during periodic marketing meetings, and 16 per cent don’t know how analytics are being discussed.

“The question we need to ask is what’s going on with those organisations, and do they not know how to do that [measure]?” Briggs asked. The next big opportunity is to define better metrics for digital, she said, adding these didn’t necessarily have to be the same for every organisation.

“If you don’t build the case for digital marketing properly, management won’t get on-board,” Briggs said.

“What I also think these figures show is a disconnect between management and junior marketers. If we don’t do a better job of equipping these juniors, that figure won’t change and the margin in offline and online spend will remain disparate.”

When it comes to the metrics wishlist, Web and predictive analytics and personalisation were the top choices for respondents, followed by social media integration. The most popular digital activity remains emails to their own databases (84 per cent), followed by social media (81 per cent). Display ads came in a distant third at 60 per cent.

Respondents were also asked to nominate channels they considered to be over-rated. Print topped the list at 38 per cent, followed by TV at 24 per cent. Briggs said the figures suggested many marketers were cynical about the level of spend still being allocated to print.

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