Marketing is an important area to budget for. Even in the supposedly affordable era of social media and direct connection with customers, being seen calls for serious investment. While every company’s needs are different, the following trends can point the way toward your own marketing decisions.
Tracking trends in marketing budgets
Marketing today covers a huge variety of messages and potential mediums. Digital methods exist side-by-side with the physical tactics they never quite replaced, and organizations weighing the benefits of inbound vs. outbound techniques will likely find each approach has its merits. In this jam-packed landscape, it’s important to look at budgeting trends.
One of the first ideas to lay to rest is that marketing budgeting itself is on the way out. When social media rose, it doubtless seemed for some companies like a way to replace paid ads. In some ways, it is – however, to use social channels effectively, and to give them the support they need from inbound content marketing, firms must still open their wallets. Combine this with the fact that some consumers are much more easily reached through other methods, and it becomes clear that paying for marketing remains necessary.
Tracking spending upward
In fact, marketing budgets are not just hanging around, they’re growing appreciably. According to Gartner’s Jake Sorofman, the 2015-2016 CMO Spend Survey found executives investing a “pretty extraordinary” 11 percent of revenues in marketing. Then, in the 2016-2017 edition of the study, that figure rose to 12 percent.
According to the Gartner analyst, chief marketers are taking advantage of these hefty infusions of resources to increase their duties beyond the traditionally narrow definitions of marketing. Undertakings that would have been classified as sales processes or customer service concepts even a few years ago have become marketing tasks at 30 percent of surveyed companies. This means leaders are putting more weight on their marketing teams, but giving them the resources to handle the new tasks.
The tools used to perform marketing functions are also evolving, with Gartner finding CMOs are spending almost as much on tech as chief information officers do. To transform their methods to reach modern customers, marketing departments need to be equipped with current IT systems and solutions, and they’re making use of their chunk of the overall budget to make sure they have these innovations.
Noticing a pattern
Gartner wasn’t the only analyst firm to put out a CMO survey in recent months. A Deloitte study carried out with the American Marketing Association and Duke University Fuqua School of Business is another window into the modern marketer mindset. Unsurprisingly, it also showed budgets on the rise.The researchers found budgets rose 6 percent in the 12 months before respondents were asked. Those marketers then stated spending will rise 7.2 percent in the months ahead.
The Deloitte data presented marketing as only 7.5 percent of company revenues, but 11.3 percent of total spending. This study found that marketing as a percentage of budget was at its highest in 2012, by far, with all surveys since turning out answers between 7.5 percent and 9.3 percent.
Also interesting is the breakdown of digital vs. traditional ad spending. The former is growing and the latter is shrinking, but neither is moving at an extreme rate. Deloitte found that digital marketing outlay is up 9.9 percent over the most recent six-month period. This seems like a lot until it’s compared to the 14.7 percent rise measured in February 2015. Furthermore, traditional marketing spending declining 1.3 percent is a notable figure, but pales in comparison to the 3.2 percent decline just six months before the current results were gathered.
What kinds of channels fit into a truly modern strategic framework? Business 2 Community contributor Brooke Sellas presented data from a third overview of spending, by Marketing Charts, which highlighted the most popular channels. Email, that venerable online communication method, still rules the roost, with 59.7 percent of programs increasing their spending on the method. Its opposite number, print marketing, will see cuts at 23.4 percent of companies.
The two aforementioned numbers tell the story of marketing in miniature: Digital methods, even old-fashioned ones, are receiving support and infusions of cash. Traditional channels such as TV and radio, as well as in-person presentations at trade shows, are on the decline. Supporting the Gartner finding about marketers increasing their purview, the Marketing Charts data found 27.8 percent of companies are using more marketing money for PR, while only 4.4 percent are cutting their spending.
The world of marketing today is a vibrant, growing space, where companies are using increasing focus to target ever-more ambitious goals. Budget numbers reflect these growing aspirations.
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