Burberry proves switching focus to digital isn’t just about saving money

This week Burberry trumpeted its decision to switch the majority of its marketing spend from traditional channels to digital, a move that will hopefully convince more brands to follow suit.

The fashion brand, famed for its glossy magazine ads, decided earlier this year to spend 60% of its budget on digital channels. Hurrah! A company realising that it should allocate its spend proportionally to the channels its audience uses the most.

The tactic seems to have paid off: revenue increased 29% to £830m in the six months to 30 September, a period that saw the luxury retailer launch new fragrance Burberry Body with a Facebook campaign rather than through traditional channels.

Speaking at a Forrester hosted event on global marketing earlier this week, WPP chief executive Sir Martin Sorrell said there is an imbalance between the media people are consuming and what is being spent on marketing.

He said about 32% of consumers’ time is spent online, including on their mobiles, yet global digital budgets are only about 17% of overall spend this year.

He added: “The dissonance will be remedied over time and the flipside is that too much [marketing budget] is spent on newspapers. They stand out like a sore thumb.”

With this in mind, it comes as no surprise that the Newspaper Marketing Agency is launching a “transition group” to try and establish what the trade body now stands for in increasingly multi-platform times.

Most marketers would say they understand the importance of digital as part of their ongoing strategies, but it seems many marketers are still underestimating it.

Take Christmas. Online shopping over the Christmas period is expected to smash all records, with consumers logging on to spend £7.75bn during the five weeks from the end of November, according to the IMRG Capgemini e-Retail.

It seems consumers are planning to go gifting on the web, rather than trample through the tinsel-decked aisles. Shoppers are getting savvy over the festival period, but are retail marketers following suit?

Almost every major UK supermarket has chosen to break their Christmas campaigns on TV this year, mostly during the X Factor.

John Lewis’ ad is currently the public’s favourite and while this is largely due to the incredible efforts of creative agency Adam & Eve’s excellent casting and storytelling, one of the other reasons for its popularity is that it debuted on YouTube a day before its TV launch, which saw it rocket into the top trending topics on Twitter.

It’s often difficult trying to determine a causation between an ad campaign and sales, but with digital campaigns, that task can be easier.

Adobe and Facebook are currently collaborating to prove the monetary value of the Like button. The SocialAnalytics tool allows marketers to establish how much revenue their status updates, tweets and most influential fans are driving to the business – on and offline – something that is difficult to establish from TV, press or outdoor.

More and more proof is emerging that digital can be as effective, if not more effective than other channels when it comes to marketing.

No longer is digital the next big thing, a “cheap” add-on, or a support mechanism; it’s now a traditional channel in its own right, ancilliary to every other marketing platform. It’s time for more brands to take inspiration from Burberry and shift focus.

Have you delivered an innovative and effective digital strategy this year? Then enter the digital category in the Marketing Week Engage Awards 2012 by clicking here.