According to June 2012 survey results from RSW/US, over the past 3 years:

  • 3 in 10 marketers shifted at least half their marketing spending from traditional to digital advertising.
  • 2 in 3 have moved at least 30% of their budgets to digital.
  • Just 4% have not changed their spending mix.

The RSW/US survey was completed by 112 senior level marketers and 118 agency principals from agencies of different types/sizes during May 2012.

These findings align closely with March 2012 results from a DataXu survey, which found about one-third of CMOs saying that more than half of their budgets have shifted from traditional to digital marketing in the past year.  23% have made a shift of between 26% and 50% to digital.

This same trend from traditional to digital was also reported in a report released in February 2012 by the Society of Digital Agencies (SoDA), conducted by Econsultancy. Those findings are that, although client marketers said traditional media still makes up the majority of their budgets, only 22% of respondents forecast increases in traditional media spending compared to 2011, while half expected to increase their paid digital media spend, and two-thirds their earned digital media spend. 38% expected to decrease their investment in paid traditional media, compared to just 16% for paid digital media, and 9% for earned/owned media.

A majority of respondents to a PointRoll survey released in March said they would be increasing their budgets for a variety of digital channels, and were more likely to say they would scale back their traditional marketing or ad budgets than to increase them (21% vs. 15%).

Just How Big a Change is This?

These shifts are not minor. They represent a 42% increase from 31% to 44% who allowcate at least have their spend to digital and social media in 2009. Only 5% remain digital and social holdouts, allocating none of their marketing budgets to these channels.

  • 52% say that at least half of the work they perform for their clients is in social and digital media – an almost 80% increase from 29% in 2009.

 A March 2012 report from DataXushow this trend appears not to be short-lived, as more than 4 in 5 who have seen an internal shift expect it to continue in the next year.

Why? “Social Media Easier to Measure”

Data from the RSW/US’ study indicates that as marketers are finding Social Media easier to measure than traditional media. Indeed, when asked which characteristic of digital marketing prompted their shift, the most common reason cited by respondents to the DataXu survey was increased measurability and accountability (20%). Rating it at least an 8 on a 10-point scale,

  • 30% of Marketers said that social media is a lot easier to measure than traditional media.
  • This is almost 4 times the proportion responding that way 3 years ago (8%).
  • Agencies agree:  28% say social is a lot easier to measure than traditional.

When asked which characteristic of digital marketing prompted their shift, the most common reason cited by respondents to the DataXu survey was increased measurability and accountability (20%), slightly ahead of increased customer engagement (18%) and lower cost of customer acquisition (16%). Roughly 1 in 10 also cited lower cost per lead, and 7% indicated that lower cost of impression was a driving force.

But How Good are the Metrics Really?

However, the Metrics are still largely soft. Research from Social Media Examiner and Awareness finds marketers to be primarily focusing on social media benefits and metrics in terms of exposure and presence.  The RSW/US report notes that the vast majority of respondents are likely still relying on social media metrics such as “likes,” and not more meaningful ones such as business impact.

Looking at key priorities for the next 12 months, marketers overwhelmingly say that measuring campaign performance is their top priorities, followed by optimizing within channels and real-time measurement and optimization. These priorities are directly correlated with the top challenges they see for improving marketing capabilities: lacking real-time data and analytics; difficulty assessing ROI; and complexity of technologies and platforms.

The challenges posed to marketers by the complexity and volume of data were also seen recently in a DataXu survey released in March 2012. According to results from that survey, just one-quarter of marketers said the software tools they currently use allow them to determine if they are efficiently allocating their digital marketing spend, and only one-third say their tools provide insights into variance of demand in real-time.

A Conflicted Mindset:

RSW/US agency respondent marketers say they are quite confident in their social and digital media savvy, indicating that they are catching up with Agency respondents:

  • 57% somewhat (44%) or strongly (13%) agree that they are on the cutting edge of understanding, working with, and maximizing their presence in the social and digital media spaces – up from 44% in 2009.
  • Agency respondents appear slightly more confident in their social and digital media savvy, with 64% saying their are on the cutting edge, relatively unchanged from 2009.
However, this contrasts with May 2012 survey results from PulsePoint, which found most marketers lacking confidence in their ability to execute complex digital marketing campaigns.

7 in 10 Say Outcomes Have Improved

Data from “Marketing in the Digital Age: Competing on Big Data & Analytic” indicates that marketers are happy with the outcomes of their decisions over the past year, although the study points out that this remains an early point in the migration of budgets and activities from traditional to digital marketing.

  • 7 in 10 respondents either strongly agree (30%) or agree (39%) that marketing outcomes have improved over the past year, compared to just 12% who disagree.
  • Three-quarters either strongly agree (30%) or agree (46%) that they have increased their marketing efficiencies.

DataXu insight suggests that given the immense amount of data available to them, marketers’ efficiency bars will likely continue rising, and that they simply may not know what they do not know at this stage.

Snap! principle of increased digital advertising spend:

Digital budgets are cannibalizing traditional media spend, and it’s too soon to say where the bandwagon will lead in terms of measurability and impact.