Why marketers are spending more on Digital Marketing

Gartner notes that Digital Marketing budgets will increase by eight percent in 2015. “The larger the company, the higher the marketing expense budget as a percentage of revenue — those with revenue of $5 billion or more reported 11 percent, compared with 9.2 percent for those with revenue between $500 million and $1 billion.”

Marketers have traditionally relied on their gut-feel of the markets and customers, in addition to sampling-based metrics when spending on mass media advertising. But Digital Marketing allows a more real-time, data-based approach to allocating marketing dollars to optimize Return on Marketing Investment.


As this 2015 survey shows, CMOs are looking to spend more on digital marketing and analytics to get better results from spend. Boards and CEOs understand the power of digital marketing and seek precise predictors of marketing success. Digital marketing has become a complex multi-layered, co-branded, multi-channel process and it is difficult to attribute which marketing tactics converted a customer.

As respected author and Google Digital Marketing Evangelist, Avinash Kaushik, puts it, “If the first was so awesome, how come I needed #2, #3… to get to the most perfect…campaign?” A network of interconnected tactics, now replaces the traditional sales funnel. The network effect is responsible for the outcome, rather than any single touch-point.

Attribution will be revolutionized by digital marketing technology

Attribution is the process of identifying a set of user actions (“events”) that contribute in some manner to a desired outcome, and then assigning a value to each of these events. Marketing attribution provides a level of understanding of what combination of events in what particular order influence individuals to engage in a desired behavior, typically referred to as a conversion.[1]

Attribution has now become the focus of several marketers, especially in large enterprises. The CMO’s search for attribution has spurred innovation in marketing technology. CMOs would like to have better predictors of ROI on marketing spend. Does it make sense for a large top-tier bank to lend its brand name to a popular sporting event? How does that affect its iPod campaign to open the account online? Is the brand diluted when it is focusing more on the conversion? If so, by how much and what should be done about it?

Marketing ROI justification is creating a rich marketing technology opportunity that spreads from simple attribution algorithms in R or Google Analytics, to large enterprise solutions on media planning and cross-channel attribution. There are some emerging front-runners and the space has just started heating up.

But then there is also the countervailing view that these models do not really matter:  what matters is lift, or data mining. As Lord Kelvin put it,  “When you can measure what you are speaking about, and express it in numbers, you know something about it.” CMOs are looking for solutions that help them make decisions that are more informed, and provide justification to their executive management. Digital marketing analytics maturity is ushering in the next phase digital marketing management.Strategy_Graphic_web2

I would be interested in reading about your thoughts on additional implications and where you think we may be in the next few years. How has your organization begun to address marketing attribution in the digital age?

Anand Vaidyanathan

Anand Vaidyanathan

Anand Vaidyanathan is an experienced IT professional and has donned multiple hats including Product Management, Business Analysis, Business Consulting. At Cognizant, Anand... Read more