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Focus on customer experience to drive up digital marketing budgets - Gartner

4th Nov 2014
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Gartner has revealed that large organisations plan to increase the digital side of their marketing budgets by 8% next year, with many marketers now setting aside roughly 10% of their business’s annual revenue for their overall 2015 budgets and a renewed focus on customer experience.

Releasing the latest findings of its Digital Marketing Spending report, the research house surveyed marketing professionals in businesses with more than $500 million in annual revenue from across the US, Canada and the UK to establish where marketers’ spending priorities will lie in 2015.

While digital was stated to be high on the agenda for many marketers, there was also a general agreement that the lines between traditional and digital marketing were becoming increasingly blurred, which was causing regular shifts in focus. Gartner’s research found that around 23% of respondents now incorporated digital spend into overall budgets.  

"For marketers in 2014, it's less about digital marketing than marketing in a digital world,” said Laura McLellan, research vice president at Gartner. “Hence, marketers manage a much more balanced and integrated marketing mix than in previous years, which were characterised by online and offline silos.

“The resulting digital experience moves customers toward a more self-service buying model, allowing reductions in sales budgets that were designed around older, physical models."

The larger the business, the larger the percentage of revenue set aside for marketing, according to the report. Businesses with revenue of $5 billion or more expected to spend around 11%, compared with 9.2%  for those with revenue between $500 million and $1 billion.

Marketing budgets as a percentage of revenue varied greatly, with 46% spending less than 9% of revenue, 24% spending between 9% and 13% of revenue. 30% of marketers expect to spend more than 13% of revenue in 2015.

50% of companies plan to increase their total budgets in 2015 to cater for improving customer experience management and the tools required to enhance customer retention.

"The amount of the marketing expense budget spent on customer experience in 2014 is remarkably consistent across all key survey demographics, averaging 18%," said Jake Sorofman, research director at Gartner.

"The survey also found that the highest marketing technology investment in 2014 is for customer experience. Customer experience is also considered by many companies to be the top innovation project, just edging out product innovation."

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