Marketers know that digital marketing represents the future of business. Therefore, according to the February 2022 edition, CMO surveythey are happy to allocate 57% of their budget to digital marketing activities and plan to increase their spending by another 16% in 2023.

However, the study also found that this contribution has weakened over the past year. More than 30% of his participating marketers said they experienced average or zero returns on their investments, and if this gap cannot be overcome, it could make fundraising difficult in the future. There is a nature.

What is driving the digital marketing performance gap?

So why are returns softening and what can marketers do about it? Our research and experience reveals six reasons behind the digital marketing performance gap.

Companies have not developed fully integrated digital marketing organizations.

More than 60% of marketing leaders reported in the August 2021 report. CMO survey Their companies are in the early stages of this journey (i.e. visualizing and designing digital transformation) or in the emerging stages (i.e. building unintegrated digital elements).

Having a digital marketing department is not enough. Digital marketing must be fully integrated across the company and used to drive and evaluate marketing decisions to maximize its potential. Unfortunately, this is not the case for most companies today.

Marketing teams face a steep learning curve when it comes to data analytics…

When asked about digital marketing investments, marketing leaders have traditionally focused on optimizing their websites. But in 2022, those investments will change dramatically, with the number of companies investing in data analytics up 37% from his, making it the largest investment his leader in marketing reported.

The challenge is that marketing tech stacks are becoming more and more complex. Companies are investing in the technology they need to catch up with their tech-savvy competitors, but with the learning curve associated with enhanced data analytics, it can take time for marketers to deliver significant returns to their companies. There is a nature.

…and the challenge of translating data analysis into actionable metrics must be overcome.

Marketers fail to convert the overwhelming amount of raw data into metrics that matter, missing out on the strategic actions it provides. You need new dashboards that help you interpret and visualize what new data analytics mean for your business today, and make actionable recommendations to improve your business in the future.

It takes time for companies to identify the metrics that matter most to their business. You need to test, iterate, and ultimately agree on reasonable thresholds for metrics that can guide further action.

Mapping digital customer journeys is becoming increasingly complex.

Businesses today engage with their customers across a growing environment of apps, social platforms, websites, blogs, and third-party sites. In short, the task of mapping customer journeys has become increasingly complex.

In fact, only 40% of marketers report having systems in place to track customer engagement in a way that informs their marketing roadmap. Also, in response to the question, “How effectively does your company integrate customer information across purchasing, communication, and social media channels?” (1 = Never, 7 = Very Very High) hand, CMO survey We have witnessed flat scores between 3.4 and 3.8 for over 10 years!

While investments in digital touchpoints may have an increasing impact, digital-specific It negatively impacts our ability to effectively quantify our contributions.

Third-party data will be lost when you change your privacy rules.

The way we use third-party data is changing in response to increasing consumer demand for privacy and the phasing out of support for third-party cookies. In fact, 61% of his marketers expect their use of third-party data to remain consistent or decrease over the next year.

Marketers are aware of this challenge, reporting a 24% increase in investment in managing consumer privacy concerns. She is also working to better understand her consumers outside of her own website and apps. This understanding is critical to learning about your customers, discovering new opportunities, and effectively segmenting and targeting your customers. This is an important step in creating value and turning digital investments into revenue.

Many companies outsource their digital marketing activities.

32% of digital marketing activities are performed by external agencies and partners, a figure that rises to 45% for B2C product companies. Companies have historically not created digital teams in-house due to talent shortages and associated costs.

However, it may be time to reconsider this. As digital plays a greater role in a company’s marketing strategy, maintaining brand consistency and a fully integrated brand strategy when most, if not all, digital activity is driven by external agencies is becoming increasingly difficult to build.

Additionally, marketers, like other business functions, are feeling the pressure to accelerate results. In-house staff can generally move faster than agency partners with multiple clients. So, when marketers aren’t taking the lead in developing strategy and managing customer data, they may be missing a vital piece of the puzzle in the customer’s journey, delaying the return of profits to the business. There is a possibility that

How marketers can drive digital marketing revenue

These are formidable challenges. But there are proven steps a marketing leader can take to close the digital gap in his marketing. Based on my experience studying companies and working with clients, I outline six strategies that provide a broad perspective on how leaders manage strategy, organization, and data to advance toward that goal.

Multiply your strategic experiments.

Nearly 67% of marketers report using digital platforms to test, iterate, and efficiently determine what works and what doesn’t in their marketing materials. At the same time, only 47% of them reported increasing investment in online experiments and A/B testing.

Companies are encouraged to increase these investments by looking at more strategic levels of experimentation that can offer breakthrough growth opportunities. Instead of testing the relevance of new products, innovations, or customer segments, marketers often get bogged down in tactical experiments, such as whether customers prefer green or yellow.

Understanding new challenges and opportunities is essential for business, especially in unpredictable times. This makes testing an ongoing and necessary process, requiring an adequate budget based on three key principles: First, budget on current data rather than historical forecasts with forecasting tools that account for dynamic market changes. Second, by testing identifiable business-wide goals or outcomes, establish your marketing experiment as an investment, not an expense. Third, have flexibility in your testing and learning budget. Market trends and consumer behavior can change, and experimentation helps companies understand and respond to new challenges and opportunities.

Deepen cross-functional collaboration.

Marketers report reasonable success working with leaders and groups that are critical to their digital marketing success. 43% of senior marketing leaders report that their CTO/CIO (or equivalent technology leader) recognizes and follows goals and paths to enabling key performance indicators (KPIs) in digital marketing and 40% report being able to do the same. Refers to the CFO (or equivalent financial leader).

These numbers are reassuring. However, it remains the case that about 60% of the marketing he leaders fly solo. This means that we have not yet worked with these important leaders and groups. Cross-departmental collaboration and coordination is essential not only to gain approval/support for marketing investments, but also to accurately understand their impact/contribution. In addition, working directly with executive management will improve your marketing capabilities, allow you to make a strategic contribution to your business strategy, and ideally protect you from future cost-cutting initiatives.

Embrace a culture of innovation.

Marketing leaders can facilitate digital transformation by helping build several characteristics of their organization, including a culture of rapid learning, strategic partnerships, specialist skills, and an agile structure. It turns out that collective power, not individual talent, is how organizations reframe thinking.

What does this actually mean? Companies that align C-suite leaders across their business and focus on common goals are well-positioned for digital transformation. More specifically, he implements three key priorities for organizations to achieve digital marketing transformation. First, establish a common set of his KPIs that ideally align with business goals such as revenue, profit, and sales. Second, these organizations put their customers first. And third, marketers truly understand how their customers make decisions, and are able to upskill and reskill their teams to ensure ever more complex jobs. enable it to be carried out.

Focus on driving growth.

When asked how they would measure the contribution of digital marketing to their company, marketing leaders prioritized driving business outcomes (increased revenue, sales, volume, profits, etc.), followed by marketing communications. , help deliver interactive customer experiences, and improve internal efficiencies.

We strongly encourage marketers to look at how digital marketing drives growth. Because this goal gets to the heart of what they were hired to achieve and is the most powerful statement a marketer can make to validate their worth. In other words, all other goals (customer experience, internal efficiency, marketing communications, etc.) must take steps toward increasing sales/revenue/volume, reducing costs, and ultimately moving the business forward. .

Leverage first-party data.

Effective use of first-party data in marketing can deliver a more relevant experience to customers, generate double the revenue from a single engagement, and increase efficiency by 1.5x.

Growth comes from incorporating customer data. Only then can marketers truly understand their customer base, including customer types, needs, and changing behaviors. This understanding allows marketers to find more users who are similar to existing users. Personalize based on customer needs. Optimize your marketing to find your most profitable customers.

Invest in AI and machine learning.

According to the company, companies are currently using artificial intelligence (AI) or machine learning (ML) only 12% of the time. CMO surveyRespondents expect AI/ML use to triple over the next three years to 38%, with 28% of companies investing in the space in the last 12 months.

This level of usage and investment should increase as businesses seek to maximize their investments in data analytics to build personalized connections with their customers. First-Party A marketer who integrates his data with ML-driven marketing techniques can optimize interactions with their company. most important Customers, not all Drive the most valuable outcomes at the most cost effective costs.

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Marketers have used digital marketing to navigate incredibly difficult business conditions, connect with homebound customers during the pandemic, and digitize their products and services to generate revenue. . Now is the time to deepen your data and digital mastery, build a culture of continuous learning and experimentation, and double down on your commitment to using insights to deliver personalized service to your customers and increase your ROI. , it’s time to stack up these gains. Companies willing to do so outperform their competitors, generate more revenue, and work more closely with executives to drive business expansion.