June 03, 2014

Ecommerce Research Chart: Which channels are companies investing in?

SUMMARY: Media mix is a frequent topic of questions we receive from MarketingSherpa readers.

It makes sense marketers would be curious. After all, this is a decision that requires getting and spending money, such as setting a media budget or purchasing a software tool.

So in this week's chart, we'll take a MarketingSherpa look at which channels e-commerce companies are investing in.
by Daniel Burstein, Director of Editorial Content

In the just-released MarketingSherpa E-commerce Benchmark Study, we asked e-commerce companies which channels they invested marketing budget in.

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Email marketing is almost universally used by e-commerce companies

"We mainly focus on email and our website. We also use direct mail. Social media is utilized but hasn't been a huge factor in driving sales. We are currently exploring PPC, GAP and remarketing," stated Jessica Deverson, Marketing Manager, Enrichment Journeys, in the Benchmark Study survey.

Email marketing is one of the only channels (direct mail comes to mind as well) that forces a decision. To paraphrase a famous Apple ad, customers can glorify (clickthrough) or vilify (delete or unsubscribe) emails. About the only thing they can't do is ignore emails. As long as your email earns its way into the inbox, customers have to make a decision on what to do with it.

Emails also have among the shortest lead times of any channel, so marketers can use it to quickly respond to events (including real-time marketing) and it provides feedback on customer performance whether through A/B testing or simple analytics reviews. Companies can use this information to change campaigns on the fly, as this marketer alluded to in his Benchmark Study survey response:

"Using analytics, I focus day-to-day marketing on hottest response levels on social media or email activity. Seasonal demands influence email campaigns and sales drives."

Why is the number not 100%, then? Well, to use emails for marketing, you have to first build that list, so it can be a difficult for very new companies to pull off (aside from buying lists), as one marketer noted in the Benchmark Study "Once, we acquired some registered customers, we also focused on targeted and value proposition driven email marketing."

The top three channels most frequently invested in – email marketing, social media marketing and SEO – often require content

"Marketing budget and effectiveness of media channels were the main considerations for determining the mix. We found that social media (especially Facebook) and SEO met our objectives," stated one marketer's response in the Benchmark Study.

While "content marketing" is the seventh most-used tactic, according to the e-commerce marketers, there is an interesting similarity among the three most frequently used channels — they all tend to be heavily used channels for content marketing. For example, one marketer described her SEO tactics as, "We tend to focus most of our efforts toward unique content and shifts toward search trends."

True, the marketers who said they invested in one of these channels, but not in content marketing, could focus all of their email efforts on promos, all social media marketing on ads, and all SEO on search engine friendly development.

Or, one might surmise, that even when they are engaged in content marketing — they don't consider themselves to be engaged in content marketing because they are writing a check to an SEO agency or an email service provider. For this reason, there is technically no line item for "content marketing" and investment in this channel can be overlooked.

Nevertheless, content marketing does require an investment to be successful, as this marketer pointed out, "This year, we are focusing on storytelling, online community development and adding value via H2H (human-to-human) marketing techniques … We have invested heavily in quality content marketing through blogs and are anticipating the current changes we are implementing will support the marketing mix we commenced with at the end of 2012."

Print is the top offline channel

While print has been a much beleaguered marketing medium of late, it is a natural fit for e-commerce.

Unlike TV or radio, which often offer fleeting mentions of URLs, print advertising puts your website in customers' hands. Beyond simply a printed URL, e-commerce advertisers also use QR codes, apps and other technology to make the connection between offline and online even easier for customers.

Beyond direct response, print helps reinforce the brand as well, as mentioned by a marketer who replied, "I sell to a niche market that is very serious about the product. It is important to keep brand awareness in a variety of locations both in print and online."

Print marketing can involve more than just traditional paid media, as content can play a role here as well. One marketer replied to the Benchmark Study stating,"Some of our work has been featured in magazines, but those haven't been paid (they use our content in exchange for credit)."

Radio and TV ads are the channels least used by e-commerce companies

While broadcast tends to be the medium most associated with marketing and advertising, it is only used by a minority of e-commerce companies. Not only do radio and TV ads tend to be more expensive than other surveyed channels, they can also be more difficult to connect to traffic, sales and ROI than other channels.

Related Resources

MarketingSherpa E-commerce Benchmark Study — Made possible by a research grant from Magento

Content Marketing: A process for evaluating content channels

Marketing Research Chart: Tactics that are seeing a budget increase (and decrease)

E-commerce Research Chart: Barriers to growth

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