July 16, 2013, 9:00 AM

How retailers spend their online marketing dollars

More than half of retailers say they will increase spending on Facebook marketing this year, according to a new Forrester and Shop.org study. And many will hire new marketing staffers, with the most in-demand position being marketing analytics, followed by e-mail marketing.

Amy Dusto

Associate Editor

Lead Photo

Retailers this year on average are spending 40% of their marketing budgets on paid search and 15% on e-mails, making those investments their top two marketing priorities, according to “The State Of Retailing Online 2013: Marketing And Merchandising,” a study released today by Forrester Research Inc. and Shop.org, the e-commerce arm of the National Retail Federation.

Forrester surveyed 65 e-retailers, mostly multichannel sellers, In April and May about their marketing strategies. About one-third of respondents generate $100 million or more in annual revenue; the rest are smaller. On average, their total marketing budgets are $7.6 million annually, the report says.

Paid search and e-mail marketing primarily drive customer acquisition and retention, the study says. Additionally, 68% of the survey respondents said they generated more revenue from paid search in 2012 than in 2011, though most of them said paid search was only equally or less cost-effective in 2012 versus 2011.

The report measured retailers’ adoption of Google Inc.’s Product Listing Ads, which the search giant introduced late last year in place of what had been free listings in natural search results.  Retailers in the survey on average now spend 6% of their marketing budget on these ads, the report says, and 71% of them said they’ll spend more on the ad units this year than last year.

They also plan to spend more on social media marketing this year over last year. More than half of the survey respondents—52%—say they will spend more on Facebook, while 31% will spend more on Pinterest, 25% on Twitter, 25% on YouTube and 23% on Instagram.

In order to maximize their marketing efforts, retailers are looking to hire more skilled staffers—40% of the survey respondents say they plan to hire for marketing analytics positions this year, making it the most in-demand marketing position for 2013, the study says. Following that, 35% of respondents say they are hiring for e-mail marketing, 26% for natural search, 22% for paid search, 22% for social media, 8% for affiliates, 6% for mobile display, 9% for mobile search and 3% for SMS messaging.

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