Digital commerce is on the rise once again, according to a new Gartner survey of marketing executives, and its importance lies, in part, in its ability to directly impact and drive customer loyalty and customer engagement.

“Digital commerce matters to marketers on multiple levels, from driving incremental revenue, to measuring attributable performance, to gaining customer insight through direct engagement,” said Jake Sorofman, research vice president at Gartner. “In addition, we’re seeing marketing leaders look beyond traditional storefronts and shopping carts, investing in rich commerce experiences, experimenting with the Internet of Things and treating digital commerce as a multichannel strategy.”

Marketing budgets continue to increase, according to Gartner’s 2016-2017 Chief Marketing Officer (CM) Spend Survey.

The survey revealed that marketing budgets increased to 12 percent of company revenue in 2016, from 11 percent in 2015; 57 percent of marketing leaders surveyed expect their budgets will increase further in 2017. But, 14 percent of marketers say they expect budget cuts, up from 3 percent just two years ago.

The survey includes responses from 377 marketers at companies with more than $250 million in annual revenue in North America and the U.K. The survey took place in July and August 2016 and marks the fifth year that Gartner has surveyed marketers on spending priorities and marketing operations.

According to the survey, marketing leaders said they spend at least 8 percent of their marketing budgets on digital commerce.

Digital commerce investments remain a high priority with marketing leaders as an important way to meet company growth objectives, particularly in consumer packaged goods (CPGs, the study noted).

“Without digital commerce efforts, CPG marketers have limited ability to develop direct relationships with customers, drive loyalty and advocacy, or collect immediate insights,” the study revealed. “Spending on digital commerce gives CPG marketers the building blocks to complement their indirect channel strategies with direct-to-consumer (DTC) engagement.”

While marketing budgets continue to rise, marketing leaders indicated that they have many demands on their resources. The top three categories from the survey—web, digital commerce, and digital advertising—shed light on the importance of digital marketing.

Contributing to the increase is a steady shift of offline media spending to digital channels, a decline in organic social in favor of paid social, and the rising importance of video, which is considerably more expensive than other digital techniques.

“Over the last several years, we’ve witnessed an expansion of the CMO mandate, from what was largely a promotional role to what is now often seen as the growth engine for the business,” said Sorofman. “This year’s survey really drives this point home as CMOs are taking on more formal responsibility. In more than 30 percent of organizations, at least some aspects of sales, IT, and customer experience now report into the CMO.”

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