Marketers Turn to Technology To Grow ROI: Study
Companies are shifting toward targeted, integrated marketing approaches and are relying more on marketing technologies to optimize customer relationships and grow marketing ROI, according to a survey conducted by Boston-based Epsilon, a provider of multi-channel marketing services.
Response data from 175 marketing executives from companies whose annual revenue was at least $250 million indicate that marketers are increasingly relying on strategies such as micro-targeting to acquire and retain customers.
At the same time respondents reported an inability to adequately track, measure and plan marketing initiatives properly in an increasingly multi-channel marketing environment.
“The marketing world is changing and we are beginning to see a shift towards right-channel marketing based on customer behavior and the demand for improved performance,” said Michael Iaccarino, president and CEO of Epsilon in a statement. “While there is universal recognition of the growing importance of customer insight-driven marketing technologies, budget allocations and marketing planning continue to lack sophistication despite the prominence of integrated marketing departments.”
Although traditional marketing channels—TV, radio and print—continue to command the largest share of budgets, the largest spending change among respondents is occurring in trackable media categories. Today more than half of respondents’ budgets go to trackable media, including channels like direct mail, email, telemarketing and search (55%), and 79% of respondents report that they are decreasing mass marketing budgets in favor of more targeted efforts.
Among marketing decision-makers and influencers, 70 percent report that their organizations currently practice integrated marketing. In addition, 72 percent claim that cross-channel, integrated marketing is becoming increasingly important to their organizations, and 77 percent will increase their efforts this year.
Meanwhile more than a third (34%) were concerned that their organizations were not properly structured to execute a coordinated, integrated, cross-channel marketing campaign. Of those organizations that do practice cross-channel, integrated marketing, however, a majority (62%) reported double-digit lifts in marketing performance, with nearly one-in-five reporting a lift of greater than 15 percent. (Typical mean reported lift was 11%).
Nearly all respondents (98%) reported that leveraging customer data is increasingly important to their organizations, and many (70%) now structure departments to place traditional marketing budgets and interactive marketing budgets under the control of a single person. But 95% still see room for improvement in their customer relationship marketing, and 38% do not believe customer data is readily available for use in marketing efforts. Even after the results are in, many (46%) rely on rough estimates rather than modeling to allocate future budgets by channel, and fewer than half examine more than overall sales to analyze lift from cross-channel campaigns.
Although roughly half of respondents (53%) say they currently leverage customer knowledge and data analysis, 80% say they will within a year. Similarly a minority report using web analytics (49%), loyalty/rewards solutions (46%), and campaign management and workflow tools (44%), but more than two-thirds expect to use these within a year; and 65% say they will use marketing automation tools, up from 41% currently. Depending on the technology, 21% to 37% will rely wholly on outside providers for these services.
When it came to marketers’ interest in emerging channels and techniques, Web 2.0 innovations like podcasting, RSS, and blogs took a back seat to word-of-mouth advertising (WOM), with 81% reporting interest in WOM. Product placement (59%) and mobile device messaging (50%) were the respondents’ other top interests.
Despite marketers’ increasing focus on their customers’ experience to guide marketing strategy, respondents spent far more of their budgets on brand awareness and customer acquisition (62%) than on retention (24%) and loyalty/reward programs (11%). Budgeting appears to still emphasize finding new customers over keeping and building more profitable relationships with existing customers.
