Salmat : One in four mid-tier marketers don’t know their ROI

Salmat's Head of Marketing, Benjamin Hillman said by not measuring campaigns, marketers were at risk of throwing money down the drain and missing opportunities to invest in more effective marketing activities.
'With marketing resources tight and the pressure to deliver results increasing, we need to be asking ourselves, 'how will I measure results and prove effectiveness?' before hitting the go button on any marketing activities,'' said Mr Hillman.

In a surprising twist for the digital age, the Salmat Mid-tier Marketing Index (SMMI) also found that while marketers are investing heavily in online channels, offline channels are expected to experience a renaissance in 2017, as a number of marketers are looking to invest in letterbox drops, print catalogues and magazine advertising for the first time.

The state of mid-tier marketing

The SMMI found that mid-tier businesses value marketing, with year-on-year investments in this field steadily growing. Comparing budgets from 2015 to 2016, only 4.8% of companies reduced their marketing spend, and more than half of marketers (59%) intend to increase them in 2017. In 2016, 43.3% of mid-tier companies spent more than half of their marketing budget online, and this will increase to 51.3% of companies this year.

If mid-tier marketers had more money and/or time, building knowledge and skills would be top of the list - either to build their own skills base (49.6%) or build more marketing knowledge and skills across the organisation (36.9%). When asked how they plan on improving their marketing skills, two in five (40.2%) said they will undertake some training or mentoring with a marketing expert, and a third (32.5%) said they will read more marketing trade media.

Offline channels are having a renaissance

While the top three channels that saw the most investment in 2016 were online, offline channels are expected to experience a renaissance in 2017. When asked what channels they plan to use in the next 12 months that they don't already use, letterbox drops (14.9%), print catalogues (12.4%) and magazine advertising (12.4%) came out on top as the new channels mid-tier marketers are planning to invest in this year.

'It's not surprising to see mid-tier marketers turning to letterbox drops and catalogues, considering how popular these channels are with Australians. Catalogues reach around 21.8 million Australians every week, and 58% of readers do end up buying afterwards. Letterbox campaigns are now more cost-effective and relevant to consumers than ever, thanks to the invention of online platforms that allow for granular targeting based on target market location and demographics. However, the best results happen when letterbox is linked to digital and vice versa,' Hillman said.

Major digital strategy disconnect: Mid-tier companies invest in websites but not search

While mid-tier businesses invest the most in websites (72.7%), they are placing little or no investment in ensuring their website can be found in search engines. In 2016, only 12.4% of respondents invested in SEO, and 6% in SEM, and the trend for 2017 is negative with only 5.2% willing to invest in SEM and 2.8% in SEO.

Lack of skill and understanding is driving the decision not to invest in SEO/SEM, as they are in the top three channels that marketers feel they are amateur at (42% for SEO, 20% for SEM). However, only a small number of marketers plan to amend this by getting some training in 2017 (8% on SEO and 5.6% on SEM). Even if they had more resources, only 6.4% would choose to invest more in SEO, and 5.2% in SEM.

'Running a website without amplifying its reach is like investing in a fancy car but not buying the fuel to make it run. There is no point in having the best website if customers can't find it, especially when we know that 90% of people don't click after the first page of results on Google. Using these channels can be complex and requires a certain level of understanding, which is why so many agencies exist to help and guide marketers. As marketing continues to evolve with new technologies, it is vital for marketers to keep on top of their education to ensure their skills are up-to-date,' says Hillman.

Email marketing reigns supreme

Nowadays email marketing is one of the top marketing priorities for mid-tier companies, second only to the company's website in investment and effectiveness. In 2016, 61.8% of mid-tier companies used email marketing, and this will grow in 2017 with an additional 11.6% of respondents planning to use it for the first time. In terms of effectiveness, the majority (53.9%) of those who used email marketing ranked it as one of their top two most efficient tools. Email marketing is a powerful tool, and mid-tier companies place much importance on it because it helps to solve their top three marketing challenges: reaching new customers, re-engaging past customers and creating a loyal customer base.

'Email marketing is efficient because it can be automated and triggered almost in real-time, with personalised content to reach the customer on every device. It has the best ROI by far at $38 for every dollar spent. However, even though lots of effort has been made in the last decade to protect customers from spam and foster trust, consumers remain sensitive to email marketing. One or two badly targeted campaigns are enough to make customers unsubscribe, and damage a company's reputation,' warns Hillman.

Adapting to market disruption

Australian mid-market companies are playing their cards right in this rapidly-evolving and disruptive market. Many of them are aware of change, as more than half (57.9%) state their business' sector has already been disrupted, or will be disrupted in the next six months (12.9%) to two years (20.9%). However, one in four (24.5%) are unsure or don't see any disruption coming to their sector.

'These companies should stay alert as a static market without emerging trends is always more susceptible to quick disruption than a market constantly evolving. The acceleration in market disruptions means that marketers need to be nimbler in their marketing approach to manage sudden changes that can be forced on a business. No marketing plan is ever set in stone from one year to the next. It takes time, money and knowledge to reach the right customers, at the right time, with the right messages,' Hillman said.

To see the full report, click here: www.salmatmarketingindex.com.au
Methodology

The figures in the report are based on a study conducted by SSI between December 5th 2016 and January 19th, 2017. The questionnaire was administered online, across 500 marketing decision makers. The data in this release and in the Salmat Mid-Tier Marketing Index was based on a sub-section of that sample, specifically 250 marketing decision makers in mid-tier businesses, defined as having 25-200 employees.

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For further information, please contact:

Shane McClelland
Senior Manager - Corporate Communications
[phone] [e-mail]

Sebastien Meunier
WE Buchan
Account Manager
[phone] [e-mail]

About Salmat

Salmat is a leading Australian marketing services business. We partner with our clients to help them with the constant pressure of acquiring and servicing their customers, week-in, week-out. With media, digital and contact capabilities, we have the right solutions for our clients, enabling them to Reach, Convert and Serve more customers.

Founded in 1979, Salmat has evolved from a small letterbox distribution business to an ASX-listed company. With a talented team across four countries we work with some of Australia's most recognised and trusted brands to manage billions of customer interactions every year.

Reach: We offer the broadest reach media (online & offline), with the ability to target individuals and up to 17 million people. Convert: We deliver conversion across multiple channels, creating more opportunities for our client's customers to buy. Serve: We make every one of our client's interaction count online and offline.