Retailers Investing More in Digital Marketing for Holiday Season

As we head into December, the holiday ad blitz is in full swing. This year, a majority of CMOs (67 percent) told us that their holiday marketing and advertising budgets are flat this year, but there are notable shifts in the way budgets are being divided. 

While classic print advertising remains the top ad expenditure for 42 percent of CMOs, this year, 31 percent say they will spend the most marketing dollars online, including social media sites. This marks a 35 percent increase in the number of CMOs devoting the most resources to online marketing and advertising over last year. The growth in digital marketing comes as retailers look to capitalize on the popularity of both social and mobile channels and incorporate lessons learned from last year’s holiday performance.

Social Media Investment Ramps Up

After being little more than a blip on the radar in 2007, social media is now essential to marketing in the retail industry. Eighty-six percent of retail CMOs have included social media in their marketing strategies — a dramatic rise from just four percent of retailers who did so in 2007. In a nod to its growing importance, retail CMOs say social media accounts for 10 percent of their holiday advertising and marketing budgets this year.
Among the retailers who are incorporating social media into their marketing efforts, 99 percent say they are focusing on Facebook. In addition to engaging with consumers and sharing promotions on Facebook, more retailers, including Brookstone and Fab.com, are now able to use the platform for e-commerce. Retailers are also looking to capitalize on the popularity of Pinterest, which is currently the third busiest site after Facebook and Twitter, according to comScore. One in five retailers says they are marketing on Pinterest this holiday season. Twitter also remains a popular site for 51 percent of retailers.

Retailers are using social media to build brand image and status, foster customer loyalty, obtain valuable insights from feedback, gather customer data and execute sales transactions via direct links to their e-commerce and mobile platforms.

Retailers Catching Up with Mobile Explosion

With Google reporting that four out of five consumers plan to use their mobile devices to shop this year, it’s clear that mobile marketing cannot be ignored. Half of the CMOs surveyed say they have included mobile in their marketing strategy, up 39 percent from 2011, but still showing that many retailers are playing catch-up with the platform’s exponential growth.

Because mobile is still a new platform for retailers, CMOs are exploring many avenues to reach shoppers. Flash sales and daily deals are the top priority for 30 percent of CMOs, while 23 percent are most focused on text messages and 20 percent on mobile coupons. This holiday season, retailers have been slowly rolling out new forms of mobile engagement, including in-store GPS and apps that provide product reviews. According to the survey, the development of mobile apps is the primary tactic for 14 percent of CMOs, and another 14 percent cite QR codes.

In the past year, we’ve seen a number of technology improvements including more user-friendly and affordable smartphones and tablets, along with the development of more engaging shopping apps and mobile optimized sites. Better technology is generating more mobile traffic, and we expect to see even more retailers capitalizing on the opportunity in the next year.

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