Wonder where we got the idea for our 2013 Digital Marketing Consortium? Our partners in this study love the results but want more. Digital Marketing technologies are transforming the commercial marketplace -- challenging companies to develop new marketing skills that employ a broad range of new tools and techniques. When managed well, Digital Marketing technologies can be tremendously effective. When managed poorly, they can damage customer goodwill and create unnecessary expense. Best Practices, LLC conducted this study to explore key trends, success factors, and lessons learned for structuring Digital Marketing groups. The study also distills winning strategies for Digital Marketing activity management, staffing, and budget allocation to help executives manage their service costs and better serve their business units and their products.

1. Mastering Digital Marketing
Structure & Strategy:
Transforming Multi-Channel Marketing
Best Practices, LLC Strategic Benchmarking Research

2. BEST PRACTIC
Table of Contents
 I. Executive Summary
 Research Overview
 Participating Companies
 Key Findings & Insights
 Strategic Path Forward Toward DM Success
 II. Analyzing Current Digital Marketing Structures
 III. Evaluating Digital Marketing Structures & Strategies
 IV. Using a Specialized Center of Excellence for Digital Marketing
 V. Current Digital Marketing Staffing Levels
 VI. Current Digital Marketing Investment Levels & Trends
 VII. Structuring for Different Market Regions & Product Lifecycle Stages
 About Best Practices, LLC

3. BEST PRACTIC3
1. Analyze a deep range of current DM
structures while probing the
prevalence, strengths, and weaknesses of
each.
2. Spotlight opportunities to improve structure
and cost-effectiveness of DM resources based
on current trends within the healthcare
industry and among innovative non-healthcare
organizations as well.
Research Objectives & Methodology
Research Objectives:
• Examine how leading Digital Marketing groups:
– Structure their Digital Marketing resources to most effectively support business
units and drive revenue
– Measure the effectiveness of various Digital Marketing tools
– Allocate budgets to various Digital Marketing activities and staff levels
– Plan to utilize the Digital Marketing group to impact the organization in the future
This study explores key trends, success factors, and lessons learned for structuring Digital
Marketing groups. The study also distills winning strategies for Digital Marketing activity
management, staffing, and budget allocation to help executives manage their service costs and
better serve their business units and their products.
Field Research & Insight Development:
Engaged 44 Digital Marketing executives and
managers from 40 companies in a rapid
turnaround field survey.
Analyzed qualitative findings and insights
from within the study.
Client Objective:

4. BEST PRACTIC
Data Segments Examined in this Study
Healthcare Segment – Abbreviated as HS and depicted in blue font, the healthcare segment comprises 23 total
companies which serve the medical device, pharmaceutical, and biotechnology industries. The companies in this
segment must navigate a more restrictive Regulatory climate than many of their cross-industry peers. For
example, when asked to identify key drawbacks to a using a decentralized approach to Digital Marketing, a full 50% of
the HS cited regulatory and compliance issues compared to just 29% of the companies outside of healthcare (click link
to view data).
Non-Healthcare Segment – Abbreviated as NHS and depicted in green font, the non-healthcare segment represents
17 total organizations across other industries such as Financial Services, Technology, Electronics, Retail, and others.
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While the majority of data presented in this study reflects input from 44 representatives of 40
different companies across all sectors and industries, some data has been segmented in the
following ways to provide deeper, more relevant insights:
Data Segments in the Study:
Elite Performing Segment
(EPS)
Criteria Companies Represented
This segment examines the
data and insights contributed
by 8 specially selected
organizations in this study
(across all industries), based
on the following noteworthy
characteristics:
- Significant ongoing investment in Digital Marketing staff
and budget
- Balance efficiency and innovation through hybrid structures
often using Center of Excellence
- Comprehensive use of Digital Marketing metrics to employ
multiple dashboards to track performance and drive
improvement
- Integrated view of managing internal and external
resources
− Bayer Healthcare
− CSC
− Dell, Inc.
− Emirates Airlines
− GE Healthcare
− Merial
− Thermo Fisher Scientific
− Volkswagen of America

5. BEST PRACTICES,
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Universe of Learning: Companies Participating in Study
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This research emerges from survey data gathered from 44 Digital Marketing and other
commercial executives and managers at 40 leading global companies. The benchmark class
in this study together represents 8 global economic sectors overall, including a rich healthcare
segment composed of 23 medical device, pharmaceutical and biotech firms.

6. BEST PRACTIC6
Nearly 60% of Respondents at CMO, VP, or Director Level
• Chief Marketing Officer
• President
• VP, Brand Marketing
• VP, Commercial E-Business
• VP, Digital Strategy
• VP, Marketing (2)
• Head, eBusiness
• Head, E-Strategies
• Global Lead, Digital & Innovation
• Director, Digital Marketing (5)
• Director, E-Commerce
• Director, Digital Media & Syndication
• Director, Marketing (4)
• Associate Director, eMarketing
• Associate Director, Marketing (2)
• Assistant Director, HCP Multi-channel
Strategy
Research Participant Job Titles Include:
Study analysis drew upon the deep experience and insights of senior group of executives.
Almost 60% of benchmark participants hold executive positions at the levels of
CMO, President, VP, or Director. The balance of participants were front-line managers
working actively in Digital Marketing.
• Global Manager, CRM & eTools
• General Manager, Digital Marketing
• General Manager, Marketing
• Senior Manager, Customer Effectiveness
• Senior Manager, Customer Experience
• Senior Manager, eServices
• Senior Product Manager
• Corporate Brand Manager
• Manager, Business Intelligence
• Manager, Digital & Multi-Channel
• Manager, Digital Media
• Manager, Interactive Marketing
• Manager, Marketing (3)
• Manager, Product & Digital Marketing
• Digital Strategist
• Digital Marketing Specialist
• Commercial Analyst

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Research Probes Healthcare, Financial & Other Industries
(n=44)
Q1. Participating Companies by Industry:
Electronics
2% Financial services
11%
Healthcare
59%
Manufacturing
7%
Retail
5%
Technology
11%
Other
5%
More than 90% of the companies that participated in this research generate above $1
billion annually. While the majority were from the healthcare industry, the financial
services and technology industries – two of which heavily depend on digital marketing –
were also well-represented.

8. BEST PRACTICES,
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Most DM Structures Are Hybrid w/ Trends to Centralize
The following key findings around Digital Marketing structure emerged from this research:
A Majority of Companies Use a Hybrid Digital Marketing Structure in the US: Some 55% of benchmark
companies use a hybrid model for U.S. Digital Marketing. 43% use a hybrid structure that joins a Center of
Excellence with individual business units, while another 12% employ a hybrid structure between a centralized
Marketing group and individual business units.
A Completely Centralized or, especially, Decentralized Structure Does Not Serve the Fast-Changing
Digital Marketing Space Well: Only 19% of companies use a completely centralized Digital Marketing
structure, while just 7% use a completely decentralized approach.
Within the Hybrid Structure Paradigm, DM Groups Are Trending toward Greater Centralization: A clear
majority of companies (61%) indicated that their DM operations have become either somewhat or significantly
more centralized in the past two years. The main drivers behind this trend include cost (i.e., maximizing
impact of investments, reducing redundancy, surviving budget cuts), competitive advantages, and changes in
organizational structure. By contrast, only 7% of study organizations reported becoming even somewhat
more decentralized in that same period of time.
Healthcare Sector Likely to Shift toward Greater Centralization of Resources: The non-healthcare
segment is already significantly more centralized across all global regions and markets than the healthcare
sector. And given the non-healthcare segment has demonstrated greater innovation and longer-term
investment than the healthcare segment, healthcare is likely to follow if, for no other reason, to better address
regulatory pressures. A CoE is ideally suited to a leading role in this approach.
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I. Analyzing Digital Marketing Structures & Trends:

9. BEST PRACTICES,
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Centralized Structures Most Highly Effective for DM Activities
The chart below provides a window into which structures are most effective for each DM
activity. The data notably spotlight that centralized and hybrid approaches are clearly seen
as more effective for managing DM activities than are decentralized ones.
Centralized CoE Decentralized Hybrid A Hybrid B
Blogs 40% 0% 11% 11% 50%
Corp. Strategy 53% 20% 0% 0% 33%
Digital Analytics 27% 25% 0% 0% 0%
Bus. Unit Strategy 42% 20% 0% 0% 17%
Email Marketing 33% 100% 18% 20% 20%
Mobile Technology 29% 0% 0% 0% 25%
Online Content
Development 64% 0% 8% 10% 17%
Online Videos 42% 0% 0% 0% 29%
Press Releases 53% 60% 0% 0% 25%
SEO 56% 40% 14% 14% 33%
Social Media 50% 0% 0% 0% 29%
Webcasts 56% 33% 8% 10% 0%
Percentage of Respondents Rating Each Structure “Highly Effective” for Each Category:

10. BEST PRACTICES,
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Reputati
on
Impact
Respon
se Rate
Leads
Generat
ed
Measurable Analytics Key to Digital Marketing Success
“Hobbled by nascent technologies,
inconsistent metrics, and a reliance on
outdated models, marketers are failing
to tap the digital world’s full power.
Unless this problem is addressed, the
inability to make accurate
measurements of digital advertising’s
effectiveness across channels and
consumer touch points will continue to
promote the misallocation of budgets
and to impede the [healthcare]
industry’s growth.”
-McKinsey Quarterly
Planning and performance measurement are essential to the success of Digital Marketing
initiatives. Those who track the greatest number of Digital Marketing metrics are more
likely to find metrics they use highly effective.
Source:
http://www.mckinseyquarterly.com/How_poor
_metrics_undermine_digital_marketing_2220
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“Continued analysis and optimization of programs is
essential to program success.” – Interviewed Executive
Performance Metrics and Process Insights
Improved DM

11. BEST PRACTICES,
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Outsourcing Is a Cost Mgmt Opportunity
Q. What percentage of your total Digital Marketing FTEs are insourced, offshored, and outsourced?
(n=35)
Most companies in the study have outsourced at least some percentage of their Digital
Marketing FTEs. Innovative organizations are outsourcing up to ¼ of their resources for
Digital Marketing as a means of remaining competitive yet cost-effective.
100%
66%
75%
29%
47%
28%
10% 0%
75th Percentile Mean Median 25th Percentile
% Insourced % Outsourced
65%
26%
Mean
Elite Performing Segment:
(n=8)
*Research Note:
Offshoring is rare. Only 20% of companies
offshored digital marketing, and most did not
do so at a high rate.

12. BEST PRACTICES,
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Companies Hoping To Compete On This Front Must Invest Adequate
Resources into Their DM Budgets
(n=32)
Q. Please note how your Digital Marketing budget has changed in the past 24 months
(n=34)
Organizations expecting to compete using Digital Marketing will have to make adequate
investment. Nearly 75% of all respondents have increased their Digital Marketing budgets
over the past two years. Moreover, half of all budgets have grown more than 10%.
47%
32%
16%
5%
50%
14%
14%
22%
More than
10%
Growth
50%
0-10%
Growth
23%
No Change
15%
0-10%
Decrease
12%
Past 24 Months
Healthcare
Non-Healthcare

13. BEST PRACTICES,
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More Evolved DM Groups in Other Industries Achieve
Greater Centralization (and Cost Efficiency)
(n=42)
Q. Which Digital Marketing structure does your organization use in each of the following regions
and markets?
Digital Marketing services are centralized within both healthcare organizations and non-healthcare
organizations; however, non-healthcare have evolved more rapidly towards centralized forms. For
healthcare, which here and elsewhere was observed to lag behind key indicators of innovation, a centralized
approach to Digital Marketing represents a key leverage point for greater operational efficiency.
33%
36% 36%
29% 29%
9%
5%
11% 12%
16%
North America
Centralized Marketing Group
Western Europe Asia-PacificHigh-Growth Emerging Markets (Brazil, China, India, etc.)Rest of World
Non-Healthcare Healthcare
Centralized Marketing Group

14. BEST PRACTICES,
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Best Practices, LLC
6350 Quadrangle Drive, Suite 200
Chapel Hill, NC 27517
www.best-in-class.com
About Best Practices, LLC
Best Practices, LLC is a research and consulting firm that conducts work based on the
simple yet profound principle that organizations can chart a course to superior economic
performance by studying the best business practices, operating tactics, and winning
strategies of world-class companies.
Link for Report: Mastering Digital Marketing Structure & Strategy