Monday, April 19, 2010

Digital Marketing Driving Transformation in Global Marketing Organizations

Watch out if you're a traditional ad agency with a limited suite of standardized creative and media services. You're likely to have less budget, control and influence with your client. According to the Chief Marketing Officer (CMO) Council's latest State of Marketing Report, corporate marketers expect to become less dependent on agencies and more self-sufficient with their own internal digital marketing infrastructures, talents and go-to-market capabilities.

Investing in digital demand generation and online relationship building ranks among the top initiatives being taken to maximize the impact and value of marketing in 2010, reported 46 percent of those surveyed. Another 38 percent say they are exploring alternative media and new routes to market, while 62 percent will be crunching customer data to improve segmentation and targeting. Most of this will be done in-house or by specialist firms and outsourced service providers in the digital marketing and customer analytics space.

In addition, some 35 percent of marketers expect to initiate or undertake transformational marketing projects to improve go-to-market effectiveness in 2010. Another 19 percent say this is under consideration, and 8 percent report this has been proposed but not approved. Most common among the projects to be undertaken are:

* Digital marketing makeover -- platforms, programs people (46 percent)
* Sales and marketing organizational alignment (40 percent)
* Customer data integration and analytics (32 percent)
* Marketing performance measurement (31 percent)
* Lead qualification and harvesting system (28 percent)
* Reorganization of marketing group (28 percent)

Attesting to the growing shift to digital modes of engagement, 59 percent of marketers are looking to train and develop existing staff, 40 percent are adding or expanding digital marketing agency support, and 36 percent expect to bring in new talent resources to their organizations. Underscoring this, 72 percent of marketers anticipate no headcount reductions as they re-skill staff, and 18 percent expect to review web design and development resources. This compares to just eight percent who plan to do ad agency reviews, an all-time low, as marketer attention moves to the digital realm.

When marketers were asked to rate their online marketing performance capability, only 6 percent responded excellent. The majority (44 percent) report they are either growing their capabilities, or struggling to quantify the value of online marketing spend. A further 15 percent say their ability to convert site visits to customer leads is deficient. In reviewing where digital marketing dollars are likely to be directed, 65 percent of respondents said they were evaluating investments in new social media and online communities, 44 percent in Internet media channels, 33 percent in mobile messaging, and 31 percent in new methods of online content delivery.

Management requirements for greater top-line growth in 2010 are reflected in how demand generation, sales support and advertising dollars are being directed. Largest shares are being allocated to database marketing (12.5 percent), sales collateral/literature (12 percent), trade shows and conferences (11.5 percent), and online advertising (7 percent). In contrast to 2009, most marketers are seeing their media budgets stay the same or increase slightly by five percent. Larger gains of over five percent are reflected in interactive/web marketing, social media, search marketing, SEO, and mobile communications areas.

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