The above statement does not sound surprising, since it is pretty well know to what extent the retail industry spends on digital ads than on any other vertical. Outstripping automotive, travel, financial services, pharma and media this year, predictions have skyrocketed and in 2015 the record stood at a staggering $13 billion on digital ads by $2 billion, racking up an impressive $16 billion in digital ad spend this year.
Good news, isn’t it? Don’t get all euphoric soon enough, because it is just getting started. Predictions have estimated an increase to a massive 23 billion by 2020 on digital spending.
This big shift to digital is also confirmed by a separate data from CMO survey. A consistent double digital rise in digital ad spend could be seen in the data. There is no sign of a slowdown instead a healthy 13.2% digital budget increase is expected for 2016.
Spend is increasing, but is knowledge?
Marketing budgets is seeing big increases and it would only be reasonable to expect increased levels of skills among the marketers who are managing the spend. However, marketing excellence has seen no discernible trend as proven by a data from CMO survey. Stagnancy is pretty much visible.
The policy followed by CMO is amusing. They rate their companies as about average, or just a bit above. It is still unclear whether these CMO is dedicatedly honest or is it attributed to the fact that they re not seeing the level of increase in marketing skills inside of their organisation. Something they would like to see within their corporate premises. Investing in skills and training becomes a sought after combating technique.
Digital gets better ROI
A survey which involved close to 200 US retail marketing executives showed their view on whether digital or offline channels give greater ROI albeit having the power to make budget allocation decisions. ROI in 2016 was seen to have given digital channel a better worth than offline channels after a three quarters report.
Social Media spending to increase
Social media spend is also touted to increase doubly from 10% of today’s budgets allocated for marketing to 20% by 2021. The percentage of marketing budget on social is lead by B2C services.
But is social delivering the goods?
Any campaign or policy could be vouched for reference only if it had delivered results previously. And even if social is getting more ad budget, is it delivering results? The answer is not quite impressive to say the least. Only 3% of CMOs surveyed reported said social was contributing ‘very highly’ to the companies performance, whilst about a fifth said it wasn’t at all important to performance.
Spend follows the eyeballs in shift to mobile
Mobile accounts for more than half the time spent on web and this seismic shift has been in the process over the past few years. More than double budgets are expected over the next 3 years. The shift is enormous, from a mere 6% to 14.6% on current marketing spend. Mobile budgets are expected to increase rapidly, more so in 3 years time and an estimated 65% of time spent on the web may be on mobile devices.