November 13, 2017
Marketers are increasingly under pressure to show that their digital marketing investments are generating returns. Large firms like Unilever have moved to more regularly reevaluate their marketing spending as part of a shift to zero-based budgeting — adopted in part to ward off potential interference by activist investors. Ad fraud and viewability concerns are giving marketers pause about whether real people are seeing the ads they pay to place. And a lack of transparency from agencies about their media buying practices is spurring marketers to reexamine longstanding relationships.
With this backdrop, it is more important than ever for marketers to take control and ensure that they are allocating their digital marketing dollars as efficiently as possible. One tool that can help is our recently published Forrester Readiness Index: Digital Marketing, 2017, which analyzes 23 quantitative variables in 55 countries to determine the level of digital marketing readiness in each country. Firms that allocate spending to countries based on our measure of readiness should be more likely to see better returns on that spending.
Pinpoint Untapped Potential For Greater Digital Marketing Investment
The Forrester Readiness Index can help marketers improve returns by pinpointing countries that may have a higher readiness score than their current digital ad spending would indicate. Ad space is likely to be relatively undervalued in such countries. To improve returns, marketers should consider reallocating their marketing investments to these countries and away from countries where the digital ad market may be more saturated relative to the level of readiness.
When comparing two particular countries, for instance, we see a 60% difference in relative positioning based on the Forrester Readiness Index versus the positioning based on digital ad spending alone. While Country A exceeds Country B’s ad spending by 19%, Country B’s environment index score is 41% higher than Country A’s because it has a far greater number of online users and number of enterprises. As a result, a firm would want to examine whether any reallocation of spending to Country B makes sense in the context of its business.
For more detail on which countries show the biggest gaps in readiness and spending and why, clients can see the complete Forrester Readiness Index: Digital Marketing, 2017 report and the accompanying interactive Excel-based tool.
Forrester has other reports that can help as well:
- Close The Global Digital Marketing Gap helps firms strategize about how best to localize their digital marketing efforts to ensure that the dollars they allocate are being spent effectively.
- Exercise Complete Control To Maximize Media ROI provides a road map to help marketing professionals develop a high-performing and highly accountable digital marketing practice.