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Allocating marketing budgets – latest US/UK budget breakdowns

A summary of new research showing the level of investment in digital marketing in 2014

It's always useful to be able to compare the way your marketing budget is divided between different digital tactics. Particularly if changes in allocation are highlighted and ideally if the budgets are for similar companies.

The fifth annual international survey from Econsultancy and Responsys Marketing Budgets 2014 helps with the first question. Over 600 businesses participated in the survey, note that some of these were agencies estimating their clients' investments.

This summary post includes what I believe to be the three most useful insights from the report Marketing Budgets 2014: Effectiveness, Measurement and Allocation Report.

Proportion of marketing budget allocated to digital channels

Proportion of budget spent on digital media

Proportion of marketing budget spent on digital marketing. Source: Econsultancy 2014.

This chart suggests that if you are investing less than 10 or 20% of budget on digital then you may be out of step with your competitors and certainly consumption of digital media by your prospects and customers.

With a bigger sample this chart would be more useful split out by market or industry, but it does provide a benchmark against your current spending.

Allocation of budget to digital media channels

Breakdown of digital media investments

Variation in different digital marketing tactics used. Source: Econsultancy. 2014.

For those involved in allocation in a current budgeting cycle, this chart will certainly be interesting. As many readers would expect content marketing is getting the biggest increases in many organisations (this includes SEO in this edition of the survey it seems since SEO isn't broken out separately).

Another notable feature of this chart is which channels are receiving the lowest increases in investment. Mobile is clearly gaining investment, but  paid search, display advertising and affiliate marketing are growing at a lower rate.

I was also interested in the breakdown of investment in customer acquisition in comparison with customer retention. It's often thought that budget investment on retention is insufficient compared to acquisition.

Percentage of budget spent on acquisition vs retention 2014

The research shows that in nearly a half of businesses there is an equal balance, but in the remainder the balance is in favour of acquisition.

For more insights on allocation of budget for digital media see our Managing Digital Marketing 2014 research report with TFM&A. This has additional insight on sourcing in-house or outsourcing and investment in optimisation and paid social media.

By Dave Chaffey

Dave is CEO and co-founder of Smart Insights. He is editor of the 100 templates, ebooks and courses in the digital marketing resource library created by our team of 25+ Digital Marketing experts. Our resources used by our Expert members in more than 80 countries to Map, Plan and Manage their digital marketing. For my full profile, or to connect on LinkedIn or other social networks, see the About Dave Chaffey profile page on Smart Insights. Dave is author of 5 bestselling books on digital marketing including Emarketing Excellence and Digital Marketing: Strategy, Implementation and Practice. In 2004 he was recognised by the Chartered Institute of Marketing as one of 50 marketing ‘gurus’ worldwide who have helped shape the future of marketing.

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