Is Marketing’s Spending Shift Toward Digital Really Warranted?

A new report from Gartner shows that 28% of marketers have reduced their investment in traditional advertising to spend more on digital marketing, which are expected to increase 9% this year. The Marketing Spending Report for 2013, which surveyed more than 250 marketers from U.S.-based enterprise companies with more than $500 million in yearly revenue, across six industries, illustrates key shifts in marketing spend toward online channels.

The Gartner report spends ample time focusing on the fact that marketers are under increasing pressure to create ROI cultures. This begs the question: are marketers increasingly investing in online efforts because they truly offer the best returns, or are marketers simply more adept in measuring returns on their online investments?

Historically, it has been easier to monitor and measure ROI for online efforts than for offline channels. For example, if a customer clicks on a Google AdWords ad and then buys a pair of blue Chuck Taylors, it’s not difficult to trace their conversion path, the cost-per-click, and arrive at the overall cost-per-sale. At the same time, offline marketing activities such as industry trade shows, radio and TV spots continue to thrive and can provide spectacular results. More recently, call tracking solutions enable marketers to easily prove which online and offline campaigns drive the best returns. Once more enterprises adopt CRM-based call tracking and are as versatile in tracking offline behavior as online behavior, it will be interesting to see whether the pendulum swings back in favor of offline marketing.

Digital marketing spending averages 2.5% of company revenue.

Yvonne Genovese, Gartner for Marketing Leaders’ managing vice president, views the increased funding for digital efforts as “a double edged sword” that not only offers marketers opportunities but also, “Puts more pressure on marketers to measure and attribute investments in revenue and profit growth.”

The report also shows that marketers are taking increased accountability for ecommerce revenues. Two thirds of marketing departments already have a profit and loss (P&L) to capture revenue from sales made from marketing-dependent digital channels. An additional 12% of businesses plan to adopt a P&L over the next year.

We think it’s great that marketers are taking accountability and gaining credit for sales based on their efforts. But why be limited to sales that close—or even start—online? As a former inside sales rep, I can say that winning deals over the phone is an art unto itself. So while, as marketers, we can’t take full credit for deals that close over the phone, we can at least share in the glory with Sales—hopefully over a beer and wings at happy hour.