The U.S. Small Business Administration recommends allocating nearly 10% of gross revenues to marketing, with half of that budget spent on digital marketing alone.
Why should businesses invest in a digital marketing strategy? What makes digital marketing important?
Above all, digital marketing helps businesses reach more customers at a scale simply unachievable through traditional marketing methods.
But, there’s much more to digital marketing than reach, from its return on investment and its measurability to its ability to retain and engage customers. Let’s take a look.
Sections
1. Reach
Nothing beats digital marketing when it comes to reach. Even the biggest offline marketing campaigns — a national billboard, direct mails, or an ad spot for the “big game” — can be replicated, and surpassed, in scale through digital advertising platforms.
But more than reach, digital advertising platforms also offer a level of targeting and personalization that is simply impossible with traditional marketing. You can target people based on where they live, what they’re searching for, down to the device they’re using. You can offer them different value propositions or use different media types in your ad.
And with machine learning, Google can even customize the ad a person sees based on their behavior in that very moment.
2. Return on investment (ROI)
Due to the high level of personalization offered by digital marketing, its ROI is wonderfully high.
- The ROI for email marketing is $36 for every $1 spent.
- 92% of marketers say that video marketing delivers a good ROI, an increase of 87% from last year.
- Facebook ads have an average conversion rate of 9.21%, across industries.
Whatever digital marketing channel you invest in, there’s an opportunity to maximize your return on spend.
3. Measurability
Digital marketing is all about metrics.
You can see your conversion rate by ad, keyword, and campaign. You can calculate the cost per conversion and impression. Metrics like these help you see the ROI of your digital marketing efforts.
But you can also measure other variables, metrics that measure customer engagement and behavior. You can track where a person clicks, taps, or views. You can understand how much time they spend on a page, and what marketing touchpoints they encounter on their journey.
The measurability of digital marketing is profound, and thanks to ever-evolving software, it’s getting more measurable by the day.
4. Customer loyalty and retention
Finally, digital marketing helps you with that most profitable end of the customer funnel: loyalty and retention.
It costs a business anywhere from 5 to 10 times more to acquire a new customer than to sell to a current one. Loyal customers also have deeper pockets, spending 67% more than newly acquired customers.
Its unmatched reach and measurability make digital marketing successful at customer awareness and acquisition. Those attributes also come in handy on the retention side. From remarketing ads to email drip campaigns, digital marketing makes customer loyalty a reality.
How important is digital marketing?
The importance of digital marketing can’t be understated. Digital marketing plays a critical role in all aspects of the marketing funnel, helping businesses reach customers on a scale previously unthinkable and allocate their budgets smartly while they do it.
Is digital marketing important to your business? Contact Your Marketing People. Let’s take your digital marketing to new heights.
