In this year’s Digital Commerce 360 digital marketing survey, 73 online retailers weighed in on budgets, tactics and their successes from email to social media. A look at how this stacks up with the 2021 findings based on 143 companies provides insights into where marketing may be headed.
Digital marketing budgets are wide-ranging and continue to grow
44% of respondents said they’re dedicating more than 50% of their overall marketing budgets this year to digital advertising. That’s up from 33% who said they invested more than 50% of their overall marketing budgets last year.
Meanwhile, the percentage of those who said they plan to dedicate 11% to 50% of their budgets to digital advertising was about the same (32% this year versus 34% last year). 16% this year (compared with 25% of respondents last year) said they plan to spend 10% or less of their marketing budget on digital advertising. Both years, 8% of respondents said none of their budgets were dedicated toward it.
Retailer digital marketing budgets are on par with prior years
Furthermore, 66% of respondents said their digital marketing budgets have increased this year. That compares with 62% who said the same last year. About the same portion of respondents (23% this year versus 24% last year) said their budgets for digital marketing would go unchanged.
More than half of respondents (56%) spend 30% or more of their marketing budget on customer acquisition. That compares with 49% who said last year that they spent 30% or more of their digital marketing budgets on acquisition.
More than half of retailers use social media advertising to drive sales and increase brand awareness. However, in both cases, the percentage of respondents decreased. 66% of retailers in 2021 said they use social media advertising to drive sales. That compares with 58% in 2022. And 55% this year said they use it to increase brand awareness, down from 62% in 2021.
44% said this year that they use social media advertising to drive traffic, a slight uptick from 42% last year. And 42% use it this year for audience engagement, down considerably from 55% last year. Similarly, only 40% this year said they use it for audience growth, compared with half last year.
The influencer’s role is multifaceted
Brands look to retailers to help build awareness and drive traffic to a brand’s website. This year, 26% of retailers said they use influencers to help generate sales. That compares with 22% in 2021.
And a quarter of retailers said in this year’s digital marketing survey that they were concerned influencers might be too expensive. That makes sense, as 21% said they found online influences to be interesting but did not see the return on investment they desired. Both figures are up from last year, when 15% said influencers were too expensive and 18% said they were not achieving the desired ROI.
A growing issue this year: 23% of retailers said it’s difficult to find influencers who would be a good fit. That’s up from 18% last year. Similarly, 14% said influencers are not a good fit for the company (up slightly from 13% last year). Also, 29% said last year that they would spend time to understand how (or if) their business should use influencers. That dropped to just 10% this year.
Retailers rank themselves on analyzing digital marketing data
Last year, more than two-thirds (69%) of retailers surveyed ranked themselves as above average at analyzing marketing performance data and attribution. Just 61% this year ranked themselves as above average.
This year, 41% of retailers said their biggest challenge is analyzing their digital marketing efforts. And 40% said companies constantly changing rules and algorithms (making it difficult to maintain performance levels) was their biggest challenge. That was the top-ranked challenge last year, which 37% selected.
Also this year, 36% found it challenging to diversify their marketing mix beyond Facebook and Google. That’s up considerably from 22% last year. Similarly, 32% cited difficulty ensuring their marketing strategies this year are profitable. That’s up from 24% last year.
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