Recognize the Importance of Digital Marketing Laura McLellan Vice President, Gartner Research Gartner for Marketing Leaders Gartner for Marketing Leaders
Recognize the Importance of Digital Marketing
Laura McLellan Vice President, Gartner Research Gartner for Marketing Leaders
Gartner for Marketing Leaders
Laura McLellan Vice President, Gartner ResearchGartner for Marketing Leaders
Laura McLellan serves CMOs and other marketing executives, sharing how digital strategies are being integrated with traditional marketing. With an extensive background in marketing and information technology services, she helps CMOs understand how companies are using digital marketing technology and marketing services to improve business results.
Top 5 Issues That I Help Clients Address:• How should the CMO adjust the vision and strategy of marketing to embrace
digital marketing?• How much is being spent on digital marketing, by whom and on what?• How should the CIO and CMO work together in digital marketing and other
technology-related areas?• How should the marketing organization be structured to embrace traditional
and digital marketing?• How is the role of the CMO expanding?
Lead Author
Additional AnalystsJennifer S. BeckVice President, Distinguished Analyst and Gartner Fellow Gartner Research Gartner for Marketing Leaders
Richard FoutsVice President Gartner Research Gartner for Marketing Leaders
Bill GassmanDirector Gartner Research Gartner for Marketing Leaders
Yvonne Genovese Managing Vice President Gartner Research Gartner for Marketing Leaders
Adam SarnerDirector Gartner Research Gartner for Marketing Leaders
Allen WeinerVice President Gartner Research Gartner for Marketing Leaders
Julie Hopkins Director Gartner Research Gartner for Marketing Leaders
Jake SorofmanDirector Gartner Research Gartner for Marketing Leaders
Michael McGuireVice President Gartner ResearchGartner for Marketing Leaders
Andrew Frank Vice President Gartner Research Gartner for Marketing Leaders
G00238768
Recognize the Importance of Digital MarketingPublished: 22 August 2012
Analyst(s): Laura McLellan
Many CMOs are well along the path to integrating digital marketingtechniques and technologies into their organizations. Gartner providesvalidation from marketing leaders that investments in digital marketing dopay off.
AnalysisDigital marketing techniques and underlying technologies are having a profound impact inmarketing investment priorities, budgets, organizational structure, skills and processes. Digital:
■ Forces organizations to rethink their relationship with customers at every stage of the buyingprocess, from research to transactions.
■ Promotes a marketing-led cross-organizational dialogue and efforts to improve customerexperiences.
■ Drives marketers to rethink what technologies their organization requires, those it desires andhow to best acquire and manage them.
When digital technologies facilitate breakthrough enhancements to marketing processes andcustomer experiences, marketers, their organizations and customers win. Yet far too many digitalmarketing activities are one-off or stand-alone initiatives that are not part of a comprehensivestrategy and are not measured against business goals. The purpose of this research is to share abroader view of digital marketing's importance.
What Drives Digital Marketing Investments Today (and It's Not ROI)
A majority of marketers that we interviewed, 54%, invest in digital marketing because they believeit's key to their competitiveness. But they are not certain of the return on their investment. For thatsurvey, which took place in April 2012, we interviewed 98 marketing executives in companies withrevenue greater than $1 billion, and who had or were considering a digital marketing function. Weasked the executives: "Thinking about digital or interactive marketing, its potential impact, and theinvestment required to participate in the space, which statement best describes your organization'sposition?"
Figure 1 shows that another 42% of companies did see the ROI and were investing for the samereason — to gain an early advantage. Only 4% of companies did not know if there was strategicvalue, but were investing to test the impact.
Figure 1. Position on Investment and Impact of Digital Marketing
We believe that digital or interactive marketing is important, but we do not know whether there is strategic value and are putting a toe in the water to gauge its impact and ROI.
Digital or interactive
marketing is strategic to our
competitiveness, we understand the
ROI and we are investing to get
early advantage.
4%
42%The ROI of digital or interactive marketing is cloudy, but we are investing because we believe it is strategic to our competitiveness.
54%
Source: Gartner (August 2012)
What Will Drive Digital Marketing Investments Tomorrow
Figure 2 shows that 75% of respondents believe digital marketing will be very or extremelyimportant to the overall success of their organization — not just marketing, but their company —one year from now and even more believe the same to be true two years from now. We askedmarketing executives: "How important is the use of digital or interactive marketing to the overallsuccess of your organization today, 12 months from now and 24 months from now, on a scale of 1to 7, where 1 is not at all important and 7 is extremely important?"
Page 2 of 8 Gartner, Inc. | G00238768
Figure 2. Sizing Up Digital Marketing's Importance to an Organization's Success
48%
75%89%
Today In 12 months In 24 months
Perc
enta
ge o
f Res
pond
ents
Very or Extremely important
Source: Gartner (August 2012)
What Activities Digital Marketing Helps to Succeed
Then, we asked marketing executives: "Rate how important your organization's digital or interactivemarketing strategy is to the success of each of the following, on a scale of 1 to 7, where 1 is not atall important and 7 is extremely important?"
The top answer? Brand building and differentiation, as shown in Figure 3. Next on the list: customercommunication, which is becoming a real-time activity. Understanding customer satisfaction rankedhigh, too.
Gartner, Inc. | G00238768 Page 3 of 8
Figure 3. Where Digital Marketing Helps You Succeed
Mean
Not at all important
Extremely important
5.9
5.5
5.5
5.0
5.0
4.9
4.8
4.4
1 2 3 4 5 6 7
Brand building and differentiation
Consumer communication
Understanding customer satisfaction with your product
Shop-ability: Improving the ability for the shopper to find and select your product
Gathering product or services innovation insights
B2C sales relationships (brand to consumer)
Services associated with your product to drive differentiation
B2B sales relationships
Source: Gartner (August 2012)
Digital Technologies and Services That Contribute to Success
In May 2012, Gartner conducted additional research — this time, it was a Web-based survey with251 marketing executives who support marketing in U.S. and European companies, and werebuyers or influenced the purchase of digital marketing applications technology and services.
We posed the question, "Which of your organization's 2012 marketing strategies are most importantto its success?" to only the marketing executives.
Figure 4 shows the top five responses, which include: strengthening the brand across all channels(29% of respondents) and improving the customer experience (25%). The next two responses are amix of techniques and results — better using marketing technology and services, and acceleratingspeed through real-time analytics and rapid response. For more information about the requirementfor marketing to act in real-time, see the Recommended Reading section.
Page 4 of 8 Gartner, Inc. | G00238768
Figure 4. 2012 Marketing Strategies Most Important to Success
Result
3%
11%
11%
25%
29%
9%
13%
15%
16%
18%
18%
10%
12%
14%
11%
Embrace social media
Accelerate speed (real-time analysis & rapid response)
Better utilize marketing technology/services
Improve the customer experience
Strengthen brand across all channels
Most important 2nd most 3rd most
57%
55%
38%
34%
30%
Technique
Source: Gartner (August 2012)
The results from our two surveys show how brand building and improving customer experiences arehighly important to two different groups of marketers, underscoring the impact that digital marketinghas on these marketing objectives.
Where Increased Investment in Digital Marketing Technologies Are Planned
For our May 2012 survey, we asked the 251 marketing executives plus another 261 IT managerswho support marketing: "What are your company plans for investing in the following digitalmarketing areas over the next 12 months?"
Mobile and tablet applications ranked highest for first-time investments as Figure 5 shows.
In addition, the majority of those participating in the May 2012 survey said they will increase theirinvestments in social media, mobile applications, CRM and customer analytics over the coming 12months.
For the most part, companies anticipate making only small cuts in marketing technologyinvestments. Spending on email marketing and dashboards are two areas that are more likely thanothers.
Some significant differences exist between U.S. and Europe, by company revenue size, and bymarketing versus IT respondent. Look for upcoming research with more details from this Gartner
Gartner, Inc. | G00238768 Page 5 of 8
survey of 512 marketing and IT managers (80% B2B and B2C end-user companies and 20% high-tech providers).
Figure 5. Planned Digital Marketing Investments, Next 12 Months
% CurrentlyInvesting
93%
92%
96%
95%
89%
95%
92%
89%
92%
92%
92%
86%
89%
85%
RANKED BY PLAN TO INCREASE
8%
10%
11%
9%
9%
8%
11%
10%
7%
18%
6%
7%
15%
11%
32%
33%
36%
40%
42%
42%
43%
45%
47%
48%
51%
54%
58%
61%
41%
40%
36%
35%
36%
38%
32%
35%
38%
20%
35%
32%
17%
18%
4%
6%
3%
8%
4%
4%
3
2
2
3
3
3
2
3
15%
11%
14%
8%
8%
8%
11%
8%
5%
11%
5%
4%
8%
7%
Reputation management
Score cards or dashboards
Single view of customer
Email marketing
Search engine optimization
Campaign management
Predictive analytics
Collaboration tools
Content management
Tablet applications
Customer analytics
CRM
Mobile applications
Social media
1st time investment Increase No change Decrease No plans to invest
Source: Gartner (August 2012)
Conclusion
CMOs and digital marketing leaders who want to learn how their efforts compare with those of theirpeers can look to upcoming research from Gartner for Marketing Leaders. We'll track digitalmarketing spending and impact. Extracts such as the one contained in this note will be offered on aregular basis; longer analysis with findings and recommendations will also be shared. If you wouldlike to learn about the differences in responses by respondent demographics on all research results,we invite you to contact to the author.
What to Do Next
■ Allocate a percentage of your budget for emerging digital marketing technologies andtechniques — and don't be afraid of failure — within limits.
■ Build in processes to test and measure digital marketing results — from pilots and ongoingoperations — so that you'll have supporting data if you need to kill a project or justify additionalfunding.
Page 6 of 8 Gartner, Inc. | G00238768
■ Communicate the importance and success of digital marketing in four ways:
■ One that mirrors your CEO and board of directors' top priorities, such as business growth,customer attraction and retention, and increased competitiveness.
■ One that crosses functional boundaries and addresses sales, marketing and customerservice at minimum, possibly lines of business and other functions such as productdevelopment and HR.
■ One that maps to key elements of your marketing investment strategy, such as brandstrength, sales campaigns and customer experience.
■ One that focuses on marketing tactics.
Recommended Reading"Three Ways to Adapt to a World That Rewards Speed"
"Using Digital Marketing to Differentiate Yourself from Competitors"
"Ensure Emerging Trends and Technologies Advance Your Marketing Strategy"
Evidence
This note is based on two Gartner primary research projects. In April, 2012, we conducted phoneinterviews with 98 marketing executives in U.S.-based companies with revenue greater than $1billion, who had or were considering a digital marketing function. In May 2012, we conducted aWeb-based survey of 512 executives (divided between marketing and IT managers), in the U.S. andEuropean companies who were buyers or influenced the purchase of digital marketing applicationstechnology and services.
Gartner, Inc. | G00238768 Page 7 of 8
Regional Headquarters
Corporate Headquarters56 Top Gallant RoadStamford, CT 06902-7700USA+1 203 964 0096
Japan HeadquartersGartner Japan Ltd.Atago Green Hills MORI Tower 5F2-5-1 Atago, Minato-kuTokyo 105-6205JAPAN+ 81 3 6430 1800
European HeadquartersTamesisThe GlantyEghamSurrey, TW20 9AWUNITED KINGDOM+44 1784 431611
Latin America HeadquartersGartner do BrazilAv. das Nações Unidas, 125519° andar—World Trade Center04578-903—São Paulo SPBRAZIL+55 11 3443 1509
Asia/Pacific HeadquartersGartner Australasia Pty. Ltd.Level 9, 141 Walker StreetNorth SydneyNew South Wales 2060AUSTRALIA+61 2 9459 4600
© 2012 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. Thispublication may not be reproduced or distributed in any form without Gartner’s prior written permission. The information contained in thispublication has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness oradequacy of such information and shall have no liability for errors, omissions or inadequacies in such information. This publicationconsists of the opinions of Gartner’s research organization and should not be construed as statements of fact. The opinions expressedherein are subject to change without notice. Although Gartner research may include a discussion of related legal issues, Gartner does notprovide legal advice or services and its research should not be construed or used as such. Gartner is a public company, and itsshareholders may include firms and funds that have financial interests in entities covered in Gartner research. Gartner’s Board ofDirectors may include senior managers of these firms or funds. Gartner research is produced independently by its research organizationwithout input or influence from these firms, funds or their managers. For further information on the independence and integrity of Gartnerresearch, see “Guiding Principles on Independence and Objectivity” on its website, http://www.gartner.com/technology/about/ombudsman/omb_guide2.jsp.
Page 8 of 8 Gartner, Inc. | G00238768
Gartner helps companies improve their business results through the use of technology. Our independent research and advice is trusted by business and technology leaders in 13,000 organizations around the world.
Our experienced research analysts talk to marketers every day — from those just entering the digital realm to the innovation trailblazers. These interactions capture real challenges, best practices and what is critical for success.
Gartner provides marketers with the research, data, tools and expert advice to rapidly deploy, optimize and measure digital technologies and coordinate diverse marketing programs into a strategy that drives results.
Why Gartner?
Corporate Headquarters 56 Top Gallant Road Stamford, CT 06902-7700 USA +1 203 964 0096
Europe Headquarters Tamesis The Glanty Egham Surrey, TW20 9AW UNITED KINGDOM +44 1784 431611
Asia/Pacific Headquarters Gartner Australasia Pty. Ltd. Level 9, 141 Walker Street North Sydney New South Wales 2060 AUSTRALIA +61 2 9459 4600
Japan Headquarters Gartner Japan, Ltd. Atago Green Hills MORI Tower, 5F 2-5-1 Atago, Minato-ku Tokyo 105-6205, JAPAN +81 3 6430 1800
Latin America Headquarters Gartner do Brasil Av. Das Nações Unidas 12.551, 25º andar World Trade Center, Brooklin Novo São Paulo 04573-903 BRAZIL + 55 11 3043 7544
GARTNER HEADQUARTERS
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. For more informa-tion, email [email protected] or visit gartner.com. Produced by Marketing Communications COGFMLGFDMPROv042313