Print and Digital Marketing Challenges for Retailers
The advertising and print circular budgets remained mostly stagnant year over year. Digital advertising budgets increased but not at the expense of print budgets in the retail segment. In a different research study, Gartner found that the marketing operating budget as a percentage of company revenue for retailers in 2012 was 10.6 percent and net expected growth in 2013 was 7 percent. The digital marketing budget as a percentage of company revenue was 2.5% for retailers. The largest percentage of the digital marketing budget is allocated to digital advertising (12.5 percent), followed by content creation and management (11.6 percent) and search marketing (10.7 percent). Fifty-nine percent of marketers in retail organizations—the highest percentage for any segment—report that they are reinvesting savings from digital marketing into more digital marketing.
In contrast to what we found, a survey by the Duke University Fuqua School of Business survey of U.S. marketers in February 2013 found that the digital marketing investment will expand at the expense of the traditional print budget. The increase in digital ad spending was projected to be most dramatic in the business-to-consumer (B2C) product category, which was expected to see a 14.6% bump over the 12 months following February 2013. B2C and business-to-business (B2B) services were forecast to see similar increases in digital ad spending.
The top challenges faced by retailers based on the Affinity Express survey are:
1) Growing sales and revenue
2) The decline in basket size
3) Advertising effectiveness and ROI
4) The decline in in-store traffic
5) Increased competition from online "stores"
6) Reduced marketing budgets
By a large margin, the number one challenge for these retailers was growing sales and revenue, followed by increasing shareholder value and increased competition from online "stores".