As we enter 2023, marketers are wrapping up their budgets for 2023. In 2022, many marketing budgets had been cut or remained flat. In a recent study from Integrate and Demand Metric, they took a look at the broader marketing community positions on budgets and resources for 2023 as companies aim for growth.
In 2023, marketers are being more optimistic about their budgets with 33% saying their budget will be slightly higher than 2022. Still, only 1 in 4 expect their 2023 budgets to be lower than 2022 budgets, which is an improvement from the situation in 2022, when one-third said it was lower than in 2021.
This year, only 1 in 3 respondents say they have more resources overall to work with than they did last year. Despite that, half of respondents say that they are expected to achieve more this year than they did in 2021.
When looking at budgets for the future, companies are looking at what areas of investments they want to commit to and what will be the best bang for their buck.
It’s no surprise that 54% anticipate an increase in budget for content creation, strategy and digital with social media platforms and influencers continuing to rise.
On the other hand, 47% expect an increase in spending on marketing operations/technology, compared to 35% who envision a decrease in spending in this area. The 47% of respondents expect to increase their budget for demand generation.
The area of investment that the largest number of study participants (53%) plan to decrease spending is on account-based marketing (ABM).
Overall, a slim majority (52%) of B2B marketers are optimistic about their marketing team and its performance compared to a year ago, and most (56%) believe it likely that their marketing team will meet or exceed the goals set for it this year.
Over the past few years, several factors such as the pandemic, supply chain and inflation have affected businesses worldwide leading to companies to evaluate their budgets. Although the economy has been impacted, marketers still remain hopeful about 2023. With these impacts, it’s likely that marketers are used to the constant changes and are trying to push past them.
Digital channels play an important role when it comes to advertising. I’m sure this is no surprise to most marketers given the pandemic the world has been facing the past 18 months.
According to Emarketer, the forecast for this year is expected to grow almost 25% and by 2023, the total B2B digital spend is forecasted to almost double to be close to the 15 billion mark.
Another stat that surprised me was that LinkedIn is forecasted to account for nearly one-third of the total B2B display ad spending in 2021. And I’m sure a majority of these ads are for job openings, but there are still plenty of promoted posts I’m seeing on LinkedIn.
On the other hand, digital ad investment accounts for 32% of total B2B digital ad spend. This is mostly due to Technology Products and Service companies. With digital channels being vital when marketing to your customers, B2B marketers are investing more in digital ads than display.
How has your company’s digital advertising grown over the past year?
Entering 2021, companies anticipated to have budget growth of more than 5% as they expected to have a swift recovery. A recent report from Gartner reveals that the share of company revenues allocated to marketing expense budgets has fallen drastically this year.
The survey of 400 marketing leaders across 5 global markets found that marketing budgets as a portion of revenue have fallen to 6.4% this year. The previous lowest year was 10.2% back in 2014. From the results we can see five trends happening.
Trend Number One:
The first trend that reflects this decrease is from the downward pressure on marketing spend induced by the pandemic. When budgets are getting cut, marketing budgets are usually the first ones to be on the chopping block.
Trend Number Two:
All nine industries analyzed had cuts in budget as a portion of revenue. Manufacturing experienced the biggest percentage-point drop in revenue allocated to marketing…12.7% in 2020, but only 5.8% for 2021! With the digital enterprise accelerating investments, spending priorities began to shift.
Trend Number Three:
With digital commerce dominating, marketing budgets started to spread across all different channels. 72.2% of investments were split between marketing channels like websites, digital ads and social channels.
Trend Number Four:
A lot of external agency capabilities are now moving to in-house strategic tactics. The three that have moved focus are brand strategy, innovation and technology and marketing strategy development.
Trend Number Five:
Lastly, with the shift to digital commerce that meant companies needed to change their spending on analytics. With having to invest in online programs to fuel digital success, this ended up taking 12.3% of the total budget.
I know manufacturers across the board are struggling with supply chain, labor shortages and other issues, but hard to believe marketing spending dropped so much in just one year.
Where is your company’s marketing budget share trending as a percentage of the company’s revenue?
The economic downturn can actually be a blessing in disguise. Marketing departments now have a chance to shine by showing how to work more effectively as well as to measure and account for their marketing decisions.
You don’t need a rocket scientist to tell you business is soft. The question is, given your resources and budget, how are you going to make your marketing work more effectively?
If we’re all truthful with ourselves, we’d have to admit that over the past 5 to 7 years, marketing budgets haven’t been scrutinized as much as they should have been. In today’s economy, those marketing budgets are in the crosshairs. Moving forward with the same-old, same-old is not an option.
Below are six ways you can make your marketing to tradesmen more effective:
1. Focus On What You Can Control
You can’t control what’s going on in Washington, the economy or most other market factors. However, you do have control over your marketing. Recognize where the demand is and go after it. Don’t be afraid to try something new.
2. Re-Evaluate Your Marketing Goals
Based on what’s happening with the economy, are your company’s marketing goals achievable? It may be time to re-state and re-prioritize your goals.
3. You Can’t Manage What You Can’t Measure
Take a hard look at the performance of your marketing plan. I know something like ad awareness is costly and hard to measure. But things like trade show leads, direct mail and online programs are measurable. Look hard and, if needed, reallocate and optimize your budget. You can’t afford underperforming programs.
4. Fish Where The Fish Are
You know who your customers and potential customers are. Make the most of your marketing investment and increase your visibility through targeted vehicles where your prospects will see your message and take action.
5. Integrated Marketing
We’ve always been advocates of tying your messages to various touch points for your customers. This synergistic method allows you a better bang for the buck! And don’t forget to bring the sales team up-to-speed as to what you’re doing. They’re an extension of your marketing efforts.
6. Focus On Quality
More is not necessarily better. The quality of your sales leads is far more important. If you adhere to the previous five suggestions, you will deliver better-quality leads, which will improve your bottom line and make everybody happy.