New research by Australian marketing services business, Salmat, reveals while most (59per cent) Australian mid-tier companies are increasing their marketing spend this year, one quarter (24.9per cent) are failing to actually measure the results of their marketing investments. When asked why they dont evaluate campaigns, two-thirds (64.5per cent) of respondents said its too time consuming.
Salmats head of marketing, Benjamin Hillman, said by not measuring campaigns, marketers were at risk of throwing money down the drain and missing opportunities to invest in more effective marketing activities.
With marketing resources tight and the pressure to deliver results increasing, we need to be asking ourselves, how will I measure results and prove effectiveness? before hitting the go button on any marketing activities, said Hillman.
In a surprising twist for the digital age, the Salmat Mid-tier Marketing Index (SMMI) also found that while marketers are investing heavily in online channels, offline channels are expected to experience a renaissance in 2017, as a number of marketers are looking to invest in letterbox drops, print catalogues and magazine advertising for the first time.
The state of mid-tier marketing
The SMMI found that mid-tier businesses value marketing, with year-on-year investments in this field steadily growing. Comparing budgets from 2015 to 2016, only 4.8per centof companies reduced their marketing spend, and more than half of marketers (59per cent) intend to increase them in 2017.
In 2016, 43.3per centof mid-tier companies spent more than half of their marketing budget online, and this will increase to 51.3per centof companies this year.
If mid-tier marketers had more money and/or time, building knowledge and skills would be top of the list either to build their own skills base (49.6per cent) or build more marketing knowledge and skills across the organisation (36.9per cent). When asked how they plan on improving their marketing skills, two in five (40.2per cent) said they will undertake some training or mentoring with a marketing expert, and a third (32.5per cent) said they will read more marketing trade media.
Offline channels are having a renaissance
While the top three channels that saw the most investment in 2016 were online, offline channels are expected to experience a renaissance in 2017. When asked what channels they plan to use in the next 12 months that they dont already use, letterbox drops (14.9per cent), print catalogues (12.4per cent) and magazine advertising (12.4per cent) came out on top as the new channels mid-tier marketers are planning to invest in this year.
Its not surprising to see mid-tier marketers turning to letterbox drops and catalogues, considering how popular these channels are with Australians. Catalogues reach around 21.8 million Australians every week, and 58per centof readers do end up buying afterwards. Letterbox campaigns are now more cost-effective and relevant to consumers than ever, thanks to the invention of online platforms that allow for granular targeting based on target market location and demographics. However, the best results happen when letterbox is linked to digital and vice versa, Hillman said.
Major digital strategy disconnect: Mid-tier companies invest in websites but not search
While mid-tier businesses invest the most in websites (72.7per cent), they are placing little or no investment in ensuring their website can be found in search engines. In 2016, only 12.4per centof respondents invested in SEO, and six per centin SEM, and the trend for 2017 is negative with only 5.2per centwilling to invest in SEM and 2.8per centin SEO.
Lack of skill and understanding is driving the decision not to invest in SEO/SEM, as they are in the top three channels that marketers feel they are amateur at (42per centfor SEO, 20per centfor SEM). However, only a small number of marketers plan to amend this by getting some training in 2017 (eight per cent on SEO and 5.6per centon SEM). Even if they had more resources, only 6.4per centwould choose to invest more in SEO, and 5.2per centin SEM.
Running a website without amplifying its reach is like investing in a fancy car but not buying the fuel to make it run. There is no point in having the best website if customers cant find it, especially when we know that 90per cent of people dont click after the first page of results on Google. Using these channels can be complex and requires a certain level of understanding, which is why so many agencies exist to help and guide marketers. As marketing continues to evolve with new technologies, it is vital for marketers to keep on top of their education to ensure their skills are up-to-date, Hillman said.
Email marketing reigns supreme
Nowadays email marketing is one of the top marketing priorities for mid-tier companies, second only to the companys website in investment and effectiveness. In 2016, 61.8per centof mid-tier companies used email marketing, and this will grow in 2017 with an additional 11.6per centof respondents planning to use it for the first time. In terms of effectiveness, the majority (53.9per cent) of those who used email marketing ranked it as one of their top two most efficient tools. Email marketing is a powerful tool, and mid-tier companies place much importance on it because it helps to solve their top three marketing challenges: reaching new customers, re-engaging past customers and creating a loyal customer base.
Email marketing is efficient because it can be automated and triggered almost in real-time, with personalised content to reach the customer on every device. It has the best ROI by far at $38 for every dollar spent. However, even though lots of effort has been made in the last decade to protect customers from spam and foster trust, consumers remain sensitive to email marketing. One or two badly targeted campaigns are enough to make customers unsubscribe, and damage a companys reputation, Hillman warned.
Adapting to market disruption
Australian mid-market companies are playing their cards right in this rapidly-evolving and disruptive market. Many of them are aware of change, as more than half (57.9per cent) state their business sector has already been disrupted, or will be disrupted in the next six months (12.9per cent) to two years (20.9per cent). However, one in four (24.5per cent) are unsure or dont see any disruption coming to their sector.
These companies should stay alert as a static market without emerging trends is always more susceptible to quick disruption than a market constantly evolving. The acceleration in market disruptions means that marketers need to be nimbler in their marketing approach to manage sudden changes that can be forced on a business. No marketing plan is ever set in stone from one year to the next. It takes time, money and knowledge to reach the right customers, at the right time, with the right messages, Hillman said
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Study: 59% Of Aussie Marketers' Spend Is Up, But A Quarter Fail To Measure ROI - B&T