Companies Spend More on Email Than PPC; 39% Have No Clue of ROI
Wouldn’t it make sense that if you spent more money on email marketing than pay-per-click marketing, you’d have a reasonable explanation for that choice?
Well, according to the data discovered in Econsultancy’s 2010 Email Marketing Census, companies are spending more on email marketing (17% of online budgets) than PPC (16%) despite not fully understanding the return on investment (ROI) achieved or taking advantage of one of the most important benefits of email marketing: segmentation.
When you run PPC campaign, you attempt to segment your target audience by using different ad creative and targeted landing pages. You wouldn’t bring a “window shopper” to a landing page that displayed only one product, would you? So it’s a shock that many companies are still not using segmentation to target their email campaigns and deliver messages, or offers, that are tailored to their customers’ known interests and buying habits. Think about that. When you email your existing customers, you already know at least a little about their buying preferences, so why would you not segment them so that they receive tailored email messages?
With this lack of fine-tuning of their email marketing efforts, it is no wonder that 39% of companies quizzed have no idea what their ROI is from email marketing. Almost forty per cent of those that are spending more on email marketing than search, have no idea why they do so! That is astounding – but even more astounding is that 33% of agencies who manage their clients email marketing campaigns have no clue either!
Companies have become complacent with their email marketing campaigns. They’ve put them on “auto-pilot” and have focused too much on fine-tuning their search and social media efforts that they’ve neglected a channel that can create new sales and keep existing customers happy.
Let 2010 be the year that we realise there’s so much more we can do to improve our ROI from email marketing.
70% of Companies Plan to Spend More on Twitter & Facebook Marketing
According to a new study by Econsultancy and ExactTarget, marketers face a conundrum when it comes to increasing their online marketing budgets in 2010.
They want to do it, but 40% of those surveyed simply don’t have the budget to spend more on marketing this year.
What to do; what to do?
I know, let us reduce our spending on print ads (41%), radio (36%), and TV (31%):
And channel those funds into Facebook and Twitter (70%), blogging (64%), and seo (64%):
Let’s hope these companies–and their agencies–can quickly figure out their ROI from social networking. Right now, only 17% of marketers say they have a good understanding of how sites such as Facebook and Twitter convert–compared to paid search ads (54%). Though those numbers stack up well against their current ROI measurement of print and radio, so maybe there’s hope. 
Report: Digital Marketing Budgets To Increase In 2010
Econsultancy and ExactTarget released a new report today that says digital marketing will account for 24% of overall marketing spend this year, and 28% of firms are shifting at least some of their overall marketing budgets from traditional to digital channels.
The research was based on a survey of more than 1,000 companies around the world, [...]
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50% of Marketers Shifting Funds From Traditional to Online; Social “Top Priority”
We already know that 84% of marketers plan to shift some of their direct marketing budgets to social media. Now, a new report from the Society of Digital Agencies suggests that 50% of marketers will shift budgets from traditional to online media.
Not only that, but the highest priority for this newly allocated budget is social networks:
Now, before all of your social media experts pee your pants with excitement, consider this. While social networking is the top priority, that doesn’t mean that companies expert to spend boatloads on it. In fact, according to this chart, social networking is #4 on the pecking order:
You’ll notice that the amount to be spent on “viral campaigns” is one of the lowest numbers. I don’t think it means that companies don’t want their campaigns to “go viral,” I think it suggests a new level of maturity in thinking. As one respondent put it:
“Rather than spending another misguided year trying to “engineer” viral campaigns that will propagate themselves, regardless of consumer intentions, it’s time to refocus our marketing efforts to align with the way that people actually behave.” – Ivan Askwith, Big Spaceship
Aw look, we’re growing up! 
84% of Marketers to Shift Portion of Direct Marketing Budgets to Social Media
According to its 7th annual survey, Alterian suggests that 66% of marketers plan to invest in social media over the next 12 months, but only 36% plan to monitor and analyze the success–or failure–of their efforts.
In fact, when you look at the breakdown, 40% of the 1,000 marketers surveyed plan to steal 20% or more of their traditional direct marketing budget to feed their new found social media marketing habit.
Considering Alterian recently acquired Techrigy, I’m sure they share my surprise–and maybe concern–that compared to the amount of spending planned for social media marketing, more is not being allocated towards actually monitoring and measuring that ROI.
This chart shows best the disparity between spend on each:
Yeah, I’m biased–I want you to use a social media monitoring tool–but really, would you consider launching an seo campaign without having web analytics on your site? No? Then why would you spend hundreds of thousands on a social media marketing initiative, without monitoring your reach, response, and successes?
Of course, it could just be that these marketers are more thrifty than naive. After all, why spend thousands on media monitoring, when plans start at just $18 a month? A blatant plug, I know, but mama needs a new pair of shoes! 
Starting Up the Social Media Marketing Prediction Engine
Well, since everybody rolled out the trends of 2009 at the beginning of December, there’s really nothing left to do this year but make predictions for next year, right? Forrester is going to kick us off with predictions for marketing in social media.
Naturally, they see major growth coming in the SMM arena (which they call “social computing,” but I think that’s something different . . . ). In fact, they see 2010 as they year social media marketing reaches maturity, with marketers (and not just SMMs) focusing on measurement and even getting budgets.
The rise of SMM will lead to more transparency and interactivity, Forrester predicts. And that will make SMM even more valuable to companies. Oh, and Twitter will reach profitability—or be acquired.
Of course, all this won’t come without challenges. With much of social media still a highly fractured, siloed space, many marketers will have to prioritize various social networks—will they spend their time focusing on getting Twitter right or really interacting with Facebook fans? Meanwhile, they’ll also have to make sure their social media is ready for the mobile web.
And of course, measurement continues to be a challenge. Says Forrester:
Marketers don’t think they’re very good at measuring social media: On average, they rate their own efforts to measure social initiatives at 4.5 out of 10.3 And there’s no silver bullet — depending on marketers’ objectives and the technologies they’re using, any of dozens of different metrics could be appropriate. But one thing’s for sure: With the need for accountability rising, marketers can’t keep pretending that fans and followers are useful success metrics. In 2010, marketers will finally start to focus on the metrics that match their objectives — and metrics that their CMOs already know and trust.
Forrester also explains how they can do this—just like we measure just about anything else. Set a goal, then figure out what metrics will help you meet that goal and track them. (Forrester notes that a lot of these metrics may be more intangible,” like brand awareness and likeability requiring “brand surveys, sentiment analysis, and Razorfish’s SIM score,” in addition to more traditional hard numbers in sales.)
What do you think? What metrics are most important in your social media marketing? How do you track them?
Forrester Looks at Interactive Marketing by Segment
Interactive marketing as a whole is a good place to be relative to the rest of the marketing world. Anywhere where the worst numbers show low single digit decreases and the happy numbers are still in the positive teens despite a continued overall economic morass you have to smile at least a little. We need to, however, remember that the overall interactive marketing is doing fine it is still like any other market. That means, simply, that some industries are going to be much better off in the interactive space than others. It is not a silver bullet for everyone.
Forrester is starting a series of reports that tell just how particular industries are utilizing the interactive marketing environment. The first is called “US Interactive Marketing Forecast by Industry, 2009-2014″. It is interesting to see how some of the verticals are using the medium in its various forms and what lessons can be potentially learned.
Not surprisingly it’s the retail and financial sectors that account for nearly 1/ 3 of the interactive spend and that trend is likely to continue through 2014. What is interesting is that their overall marketing budgets still hold room for their growth to be significant. I wonder when other industries will find that they are completely under utilizing the Internet channel and will take more of their traditional spend online?
Our readers are knee deep in this stuff every day. Do you see any verticals / industries that may be missing the boat to this point? Where are there spots in the B2B and B2C world that will be hot growth areas for the next five years for interactive marketing. C’mon now. Don’t think you have some big secret that you can’t share. Remember that 99.999 % of the people that hear your ‘great idea’ probably couldn’t even begin to figure out how to execute it so don’t hold back.
How To Use Google Analytics To Improve PPC Performance: Part I
Running effective PPC campaigns in B2B markets is a competitive task that can be extremely expensive. That’s why it is so important for search marketers to run efficient campaigns that create maximum value for those high-cost clicks. So what can you do to be more competitive and increase ROI even as these tough economic times are shredding your budgets?
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4 Ways Budgets Get Off Track & Tips For Fixing Pacing
Pacing may be the most important task for the search marketer. Ending an account overspent means you might have blown through money the client just doesn’t have and you could be on the hook for the difference. Ending a campaign under budget can be worse based on the missed opportunity. I remember [...]
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SEO in the Executive Suite: Webcast Tomorrow, 1 PM EDT
If organic search drives 90% of referrals, why does it only get 5% of marketing budgets?
That’s one of several questions we’ll address in tomorrow’s webcast, “Managing Search Marketing Success at the C-level: What Your CMO Should Know,” at 1 PM Eastern time. Richard Zwicky, CEO of Enquisite, and Sramana Mitra, author, entrepreneur, and columnist at [...]
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