Marketing Future is Bright
According to Gartner’s Annual CMO Spend Survey, The State of Marketing Budget and Strategy 2022, the marketing future is bright. Following record lows in 2021, 2022 marketing budgets as a percentage of company revenue have climbed from 6.4% to 9.5% despite a wide range of negative global factors, such as inflation, COVID, supply chain hiccups, and Russia’s invasion of Ukraine. In fact, most CMOs who participated in Gartner’s survey expect these external factors to positively impact their strategy and investment in the upcoming year. This data is aligned with the August 2021 CMO Survey, which shows marketing spending growth returning to pre-pandemic levels and an optimistic outlook for the next 12 months. The latest IPA Bellwether Report also concurs, reporting that 14.1% of companies increased their marketing budgets in Q1 2022, bringing it to the highest level in eight years.
Marketing Budget: How Much to Allocate?
Marketing budget as a percent of total revenue varies widely by industry. According to the CMO survey, the B2C product sector allocates an average of 13.7% of revenue to marketing budgets; the B2B product sector allocates only 6.7% of revenue to marketing spend. Gartner indicates that the highest marketing spend increases can be found in the financial services industry (10.4%), the travel and hospitality industry (8.4%), and tech products (10.1%), while consumer goods companies have decreased their budgets from 8.3% in 2021 to 8.0% in 2022.
Where to Focus the Marketing Budget?
If you’ve turned your attention to digital channels, you are in good company. According to Gartner, 56% of marketing spend is allocated to digital channels. Of these digital channels, reports show that 29.5% of marketing budget was dedicated to website, email, and mobile channels. Social media and SEO spend followed.
Here’s how Marketing Leaders focused their marketing budgets in 2022:
Marketing Spend on Email Marketing
The reason so many marketing leaders planned to channel their marketing budget toward email marketing platforms, is because the relatively low cost of email marketing traditionally delivers the highest ROI: $36 for every $1 spent. That means companies receive 36 times every dollar they invest. A no brainer for any marketing leader.
In addition, email marketing technologies and automation are helping companies better segment their target audiences and achieve better results. Even simple automations — such as sending an automatic welcome email when someone subscribes to your list, or sending an email reminder to renew their contract — help you nurture relationships and keep more customers.
Marketing Spend for Events and Sponsorship
Beyond digital channels, additional marketing investment in traditional channels is necessary. As most of the world relaxes its COVID restrictions, investments in offline channels are rebounding. One area of growth in the offline channel is events and sponsorships.
During the pandemic, events and sponsorships disappeared from the marketing mix. With social distancing essentially a thing of the past, in-person events – such as trade shows — are back in full force. According to Gartner, in-person events account for almost 20% of total offline spend, and even slightly more when it comes to B2B companies (21.9%).
In-house or Outsource Marketing Budgets?
With 58% of CMOs reporting a shortage of talent that hampers their ability to execute their marketing strategy, an increasing number of companies are choosing to outsource their marketing activities. Partnering with an agency gives your business an edge as you will benefit from having an objective perspective and fresh ideas about your product or service. No matter how talented your internal team, their knowledge base is limited to what they know. However, an agency’s years of experience and exposure to industry best practices will help you hone your strategy and find the right selling points to highlight to stakeholders and customers.
In addition, proper creative materials and branding are essential for success when trying to stand apart in a busy marketplace. So is a robust content strategy. An in-house marketing team offers limited capabilities, while a full-service agency can handle digital marketing and SEO, content strategy and creation, social media management, trade show marketing, business plans and proposals, video marketing, and so much more.
Plan for Success with the Right Marketing Budget
The optimistic marketing outlook is good news for businesses that hope to thrive in uncertain economic times. Channeling funds to your marketing budget can ensure that your unique business goals are met through robust marketing campaigns. Enlisting the help of a professional marketing agency can help you get the right message to the right audience through the right (online and offline) channel at the right time.
GROW is a full-service marketing agency passionate about helping B2B companies achieve their goals. Contact us here to learn how we can help you drive qualified leads, increase conversion rates, and nurture sales opportunities.