Email staffs must be feeling the pressure. The average digital marketing spend has increased by only 8.8% YoY -- a 45% drop from the 15% jump seen last year, according to this year’s CMO survey, a collaboration between Deloitte LLP, the Duke University/Fuqua School of Business and the American Marketing Association.
But overall marketing budgets are in the worst shape — with spending growth falling by 72% during the same period, to show an increase of only 2.9%.
As to why, 52.2% of marketers say inflation is decreasing marketing spending levels, while 16.% claim it is driving an increase and 34.1% say it has had no impact.
Pure-play internet brands are the least affected — 47.1% those that draw 100% of their revenue online say inflation has had no effect, while 29.4% report decreased spending and 23.% have seen an increase.
Marketing now claims only 12.3% of company budgets, but its percentage compared to revenues rose to 10.9%.
Meanwhile, digital is now drawing 53.8% of the average marketing budget. The biggest digital spenders are in the education (75.5%), technology (65.7%) and healthcare 64.6%).
The B2B product sector devotes 56.6% of its marketing budget to digital, B2B services allots 50%, B2C product 55.1% and B2C services 52.8%.
Other reports show that email is down in fourth place in budget allotments even while its performance remains high.
Where are the marketing dollars going?
For one thing, into mobile. Mobile now draws an average of 19% of the average budget, compared to the 18.7% projected last year. Moreover, firms that do 50%+ of their sales via the Internet are now spending 30% on mobile, and expect that to rise to 50% in the next five years.
This is occurring despite the fact that on a scale of 1 to 7, mobile draws only a 3.2 score in contributing to company performance in the past year. The study states that “mobile marketing contributions to company performance remain weak over time, despite higher investments.”
Social media is also getting more money. It has risen by 17%, and is projected to rise by 26.4% in five years. Even firms with no internet sales forecast they will devote 10% to 20% of their budgets to social in the next half decade.
The researchers surveyed 314 marketers from January 10-February 1, 2023.