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SEO, SEM Rule Retailers' Marketing Budgets

By Richard Adhikari
Jul 21, 2017 1:42 PM PT
marketing-spend

Retailers have been focusing on technologies to measure and assess customer response, and have been using the data they produce to drive e-commerce decisions, suggests a study of 136 enterprise retailers at the 2017 eTail West Conference held earlier this year.

Enterprise retailers with at least US$500 million in annual revenues participated in the study, which was a joint effort of Adam Software, an Aprimo company; WBR Digital; and ChannelAdvisor.

Multichannel enterprise retailers comprised 81 percent of respondents, pure-play online retailers 11 percent, in-store-only retailers 4 percent, and other types of companies the remaining 4 percent.

Enterprise retailers have been implementing customer experience strategies across multiple channels, the researchers found. They have been seeking out intelligent data solutions to obtain a 360-degree view of customers across multiple channels and marketplaces.

"Digital retailers are likely to have reversed the classic stock focus on having goods to sell as the business model, to building a base of loyal customers they assist in buying what they need," observed Andy Mulholland, principal analyst at Constellation Research.

"A digital retailer acts more as a personal shopper using intelligence to make every aspect of your buying activity feel right," he told CRM Buyer.

Marketing Spending Priorities

The top four spends for retailers, according to the study, are the following:

  • SEO/SEM - 79 percent of respondents;
  • Online display - 77 percent;
  • Social media - 65 percent; and
  • Email - 64 percent.

Social media was the highest spending priority for only 3 percent of retailers and the second-highest for just 14 percent.

Social media is "rarely the leading channel in a marketing strategy," noted Jeffery Parrish, Aprimo's director for retail and consumer goods.

"Because many retailers are focusing marketing investment in digital channels, social media Grow your business with social media management services from Deluxe! is a very prominent channel and component of the typical retail marketing mix," he told CRM Buyer. "Investment in social media management, technology, and social media influencers make it understandable that this would be a top four channel of investment."

Retailers spent the least on channels through which data can neither be significantly acquired or applied -- such as direct mail, radio and TV, print ads, trade shows and events.

Optimizing a Multichannel Strategy

Retailers have been redesigning their online buying experiences to accommodate a multichannel strategy, the study found.

However, 46 percent of the retailers surveyed across channels considered their performance only average.

"Each retailer has their own marketing mix with winning channels, and many retailers struggle to find equal levels of success across channels," Parrish explained. "This perspective is largely due to the difficulty for retailers to adopt multi-attribution models."

Consumers are moving toward making online purchases via mobile devices, but only 33 percent of enterprise retailers considered their mobile app performance above average or excellent; another 37 percent considered it below average or poor.

One company attempting to remedy the problem is Curalate, which on Thursday released Curalate Showroom, a tool that lets companies make their social media channels shoppable on mobile.

Curalate's platform lets companies tag any image or video to create a Showroom, posting the link to any marketing channel selected.

Curalate's algorithm creates a feed of recommended products for consumers to browse.

The goal is to effect "a major jump in time on site and a big drop in bounce rate as consumers engage more and stay on site longer," Luke Butler, Curalate's manager of strategy and operations, told CRM Buyer.

The Challenges of Personalization

The retailers surveyed sought to personalize the customer experience -- but that is easier said than done.

"Generally, when marketers just dabble with personalization they run into issues because they're not using good enough data," said Andy Zimmerman, CMO at Evergage.

"With deeper, better data and machine-learning-driven affinity modeling, marketers can be much more effective at driving 1:1 relevant experiences that truly engage visitors," he told CRM Buyer.

Many marketers are getting more funds for personalization, said Zimmerman, because it's "an investment that can be justified with quantitative analysis and intuitive logic."


Richard Adhikari has been an ECT News Network reporter since 2008. His areas of focus include cybersecurity, mobile technologies, CRM, databases, software development, mainframe and mid-range computing, and application development. He has written and edited for numerous publications, including Information Week and Computerworld. He is the author of two books on client/server technology. Email Richard.


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