Top online marketers enjoy more than triple the conversion rates of the bottom third of advertisers, according to a new digital marketing optimization study by Adobe.
Why? Those marketers are willing to invest in a culture of data, testing, optimization, and analytics. In other words, they get the facts — and they use them to great effect.
That’s the conclusion in the study, reviewed in an excellent recap by John Koetsier at Venture Beat (VB News). A link to the story, which is replete with charts and data of its own, is below.
In the piece, Koetsier revealed that Adobe executive director Michael Krypel gave him the news straight up: “Leading companies prioritize optimization. They invest time, resources, and budget, giving the top 20 percent of companies a conversion rate 1.7X the average rate.”
Adobe, which has its own digital marketing optimization tools (via the Adobe Marketing Cloud), just released a study based on interviews with more than 1,000 marketers about what they do to optimize sales and the kinds of conversion rates they are currently achieving.
Results of the study show there’s a vast range between those who are successful and those who are not. The rundown below shows percentages of marketers and their conversion rates:
4% = less than 0.5% conversion rate
10% = 0.5% to 0.9%
19% = 1% to 1.9%
30% = 2% to 4.9%
18% = 5% to 8.9%
20% = 9% and above
“As you can see,” writes Koetsier, “there’s a massive gap between the bottom 35 percent of marketers, with conversion rates from .5 to 1.9 percent, and the top 20 percent, with conversion rates of nine percent or higher.”
Why the big difference? Adobe’s study highlighted five key differences between winners at the top of the spectrum and losers at the bottom of the barrel:
1. Data-driven decisions
For starters, the majority of high-achieving online marketers test to make decisions, and they make those decisions based on data. Fifty four percent of unsuccessful marketers admitted that “testing is not a priority,” while only 30 percent of top-performing marketers said the same.
2. Investment in optimization
“Companies are finding that an investment in optimization, analyzing, and testing pays off,” Krypel said.
Top online marketers are 54 percent more likely to spend at least five percent of their budget on optimization, which includes technology, agency fees, and professional services. That, Adobe says, is a “cyclical process – more budget towards optimization efforts yields higher conversion rates and revenue to then reinvest in additional activities.”
Done right, there clearly are benefits.
“Optimization will just help marketers to do their jobs even better,” said Kypel, who has authored a book on customer-centric design. “The online customer experience has never been so important … it’s crucial for online companies to determine which experiences will engage customers and which will drive them.”
3. Targeted content
Another nugget from the Adobe study is that the top 20 percent of online marketers are much more likely to target their content so that it is personalized for website visitors.
Some of that is done manually, but successful marketers are 83 percent more likely to automate content targeting with the aid of data.
According to a Forrester study cited in Adobe’s report, marketers who target more than 20 percent of their website visitors achieved twice the average conversion rate, hitting conversions of five percent.
4. Beyond the marketing department
It’s critically important, the study reveals, that marketers reach outside of their own departments.
According to Adobe, the top 20 percent of digital marketers are “88 percent more likely to engage other departments for contribution and expansion of their testing effort,” and those who do “see a lift in conversion from the average of 2.6 percent to 4.3 percent.”
Whether it’s enlisting the IT department for help in implementing new technologies or help in automating processes, or integrating optimization, thinking “outside the box of the marketing department” is paramount to success.
5. Focus on mobile
Most marketers understand the increasing importance of mobile, but the top fifth of marketers are way ahead of the curve: 83 percent of them say that mobile is key to their cross-channel marketing, as opposed to 67 percent of the bottom four-fifths.
About 50 percent of current retail web traffic is now via mobile devices, Adobe’s study posits, which allows marketers to target by the easiest to get metric: location.
“Every mobile device has the inherent ability to track where in the world is Waldo at a given time,” Adobe says. “The easiest step towards mobile personalization is location-based targeting via GPS or Wi-Fi tracking, points of interest nearby, and the recent innovation of iBeacons.”
Clearly, data-driven is the winners’ way to go. Companies that are approaching digital marketing with a technical focus on data and optimization are, simply said, beating the competition. Too many businesses and brands, suggests the study, are spending more and more to get less and less because they aren’t accessing available data.
Also, it’s clear from the study that using data isn’t “just something for companies to throw money at.” Rather, suggests Koetsier, “It’s a core competency to engrain in your DNA.”
To read the full post and review all of the charts, click here.