Remember US department store merchant John Wanamaker’s quote about advertising?
“Half the money I spend on advertising is wasted; the trouble is I don't know which half.”
And remember how sure and triumphant we were when digital marketing came to the scene? The dark days were over. From now on, everything in marketing would be measurable, each sales result attributable to a specific marketing investment. No more waste.
Or so we thought. And promised to our managers, financial directors, and clients.
That was twenty years ago. Today, with probably millions of euros and dollars invested in digital analytics and a growing plethora of tools, it is time to be humble again.
More than half of digital marketeers say they don’t know which percentage of total revenue can be attributed to digital marketing. Even worse, ignorance about the effectiveness of digital marketing seems to be growing.
In the third bi-annual survey of digital marketeers in Belgium by The Reference, a stunning 60 percent of marketeers answered “don’t know” to the question “What percentage of total revenue can you attribute to digital marketing?”, five percentage points more than in the previous (2013) survey. 54 percent of marketeers agree with the statement that “It is difficult to determine the ROI of my digital marketing efforts”, six percentage points more than in the previous survey and a full 10 points more than in the 2011 survey.
On a related question, 57 percent of marketeers agree with the statement that “It is difficult to generate insights from the huge quantity of data (websites, internal systems, market surveys, social media, …)”, compared to 46 percent in the previous survey.
The answer to this last question probably reveals part of the reason why digital analytics hitherto hasn’t delivered on its erstwhile promises. Since the first survey of digital marketeers in 2011, The Reference has been obliged to add ever more categories or disciplines to the digital marketing register to fully cover the growing landscape of Digital Marketing. For the 2015 survey, we added Programmatic Buying and Real Time Bidding, Real Time Dashboarding, Marketing Automation, Interactive Presentations and Digital Strategy.
In all, we are now looking at twenty different disciplines in Digital Marketing, each of them requiring their own expertise and investment and each of them generating even more data. At the same time, it seems that it is becoming harder to find the people to work with the data. 41 percent of digital marketeers agree that “It is difficult to find and keep people with expertise in digital marketing “, compared to 32 percent in the 2013 survey.
Should we give up and resign ourselves to a Wanamaker-like attitude, sobered after the initial promises and hype?
We don’t think so, and neither do a lot of digital marketeers. 35 percent of them plans to invest more in digital analytics this year, compared to 2015. 46 percent will invest more in digital strategy.
Here are some of the elements that we think were probably missing and will need more attention for digital analytics to deliver its full potential:
- Too many companies and organizations start their digital analytics as a necessary but cumbersome add-on to their (digital) marketing efforts. We believe digital marketing should start with installing a culture of analytics in the company. This requires huge efforts for most companies, efforts that should be driven by top management and strategy and that necessarily should be cross-departmental and, hence, will be difficult
- Yes, too few marketeers are literate in the domains of statistics and databases. But no, we don’t believe every marketeer should have a degree in statistics and database management. We do believe, however, that a growing number of marketeers should enhance their statistics and database knowledge up to a level that enables them to discuss on an equal footing with their more number- and data-literate colleagues. The ultimate goal should be for the marketeer to regain full command over his marketing actions (hush … don’t tell your IT-colleagues)
- We believe a lot of companies have been underinvesting in dashboards and that those who have invested in dashboards, haven’t made enough difference between management dashboards, operational dashboards and analytical dashboards
- A good analytics approach combines the right combination of top-down with bottom-up. Top down is about asking the right strategic questions (Where are we? Where do we want to be? How are we going from here to there?). Bottom up does the number crunching to deliver elements of the answers and to suggest new questions. Too often, bottom up comes up with numbers that are answers to questions that were never asked and that are not relevant to the strategy.
Some other findings from the 2015 Survey of digital marketeers:
- 68 percent of marketeers will raise their digital marketing budget in 2016
- In contrast, only 21 percent of marketeers will raise their off line budgets; 34 percent will lower it and 45 percent will keep the off line budget unchanged in 2016
- The top categories companies plan to invest more in this year: content marketing (70 percent of companies); presence on social media (50 percent); digital strategy (46 percent)
- Advertising is shifting to search engines (SEO (73% adoption rate, compared to 65% in 2011) and SEA (66% compared to 50%), social advertising (62%, compared to 52%) and mobile advertising (34%, compared to 21%), away from banners (57%, compared to 61%)
- When asked to divide a budget of 100 over four areas, 32% would invest in developing the skills of people who are already in house; 27% in technology; 23% in outside agencies and 17% in new people
*The Reference Digital Marketing Survey 2015:
• 50% of respondents with a total marketing budget of more than 100,000€; 34% of respondents with a budget of more than 500,000€
• FTE in digital marketing of all respondents combined: 872
Download the interesting infographic, summarizing the results and tips of our experts now.