Commentary

The Villians Behind Rising Online Marketing Budgets And Broken Ecommerce Platforms

Consumers opened two-thirds of emails sent by multichannel retailers on mobile devices in 2013, up from previous years for most industries. Multichannel retailers had the highest percentage of mobile opens this holiday season, with 65% -- and this was the only industry to receive more than half of its clicks on mobile, per Experian Marketing Services.

Awesome. Marketers won. Email volume and performance metrics keep rising. In fact, the volume of emails sent last holiday season rose by 13%, compared with the prior year. Email click-through rates and transaction metrics fell year-over-year, but the increase in email volume rose 9% in the number of total transactions from email marketing campaigns -- and overall, an 18.4% increase in revenue. The email volume within the last 10 days of the holiday season rose 35.8%, compared with 2012.

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For this study, Experian Marketing Services based its analysis on 385 brands that participated in mailings during the 2012 holiday season. All data was viewed after three days from being sent.

Okay -- that's all well and good, but I want to know what percentage of these emails prompted a search on an engine or on retail or brand Web sites. It's a complex back-end technical infrastructure problem to connect multiple channels, similar to the issue brands have connecting online order systems to in-store. Not many marketers can connect the dots. And if they can, it takes months of research. Not even Nike connects online sales with in-store purchases. I bought something from Nike's online store and went into the physical store to return it. The sales associate said he would need to send the item back to the online department, which would issue the credit. Huh?

Online marketing budgets continue to increase, but how much will you pay in shipping costs if returns from products bought online must go through the mail?

Meanwhile, an Experian spokesperson did say that email continues to play a more significant role in driving traffic to retail Web sites, particularly during key holiday shopping weeks -- but what's the benefit if I can't buy online and return the items in the stores?

Comparing holiday data from 2013 vs. 2012 during the week ending Nov. 30, Experian Marketing Services confirmed that email rose 31% in terms of driving traffic to the Hitwise Retail 500 companies. Meanwhile, search fell 14% since 2012.

How much will marketers budget for search and email marketing in 2014? About 58%, per ExactTarget's 2014 State of Marketing report containing feedback from 2,500 global marketers. The study suggests that 68% of marketers believe email remains core to their business, and 49% send more than 500,000 emails annually.

It turns out 88% of marketers use email to reach consumers; followed by 78%, social media; and 73%, search engine marketing including optimization and paid search, according to ExactTarget.

Email budgets will rise because 42% of marketers said email indirectly impacts business performance, 42% said it' an enabler of products and services, and 16% said the businesses' primary revenue source directly links to email operations.

Here's a question for you:  Why do brands increase online marketing budgets to encourage ecommerce if the backend systems don't work like they should?

"Blindfold man in front of Laptop" photo from Shutterstock.

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