Are you spending enough on digital marketing?

June 25th, 2008

GroupM (the holding company for all of the WPP media agencies), issued a new report saying that share of spend on digital and interactive media has increased from 8% in 2005 to 14% this year.

They project the total to increase to 16% next year as new digital marketing tactics like mobile and behavioral targeting continue to emerge.

(Ironically, the GroupM site is totally devoid of any search optimization and violates all kinds of Web site best practices).

Companies and agencies often ask what percentage of their media budget should be devoted to digital marketing tactics. Frankly, the real answer is “as much as you can spend while proving measurable ROI.”

But, based on these findings, I’d estimate somewhere in the 10-15% range if pressed for a figure. In many cases, interactive spend for local companies is often a bit less than average because of the reduced amount of search marketing volume available. However, given the effectiveness of local search as a tactic, in some instances it comprises a very large portion of the company’s overall budget.

Even for agencies themselves, I’m seeing a new devotion to online promotion, with some firms generating the vast majority of their inbound new business leads from effective search optimization and highly targeted banner ads.

Take a look at the clients for whom your agency handles digital marketing. How many of them are spending 15%+ on interactive tactics?

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