If your marketing budget is looking paltry, you’re not alone. Budgets have fallen to their lowest level in recent history, to 6.4% of overall company revenue in 2021 from 11% in 2020 according to Gartner.
The CMO Spend Survey covered 400 CMO and marketing leaders in North America, the UK, France and Germany, tracking the areas they are investing in and where cuts are being made from people, programmes and technologies.
While travel and hospitality, manufacturing and tech product companies experienced the biggest cuts in 2021, no industry achieved a double-digit budget this year.
Marketing has a long history of being the first to have its budget cut in tricky economic environments. This is often put down to lack of faith or respect from the CEO and/or CFO in marketing’s contribution to business growth. As such, marketing may be seen as ‘nice-to-have’ rather than critical to growth.
In many ways, the sector only has itself to blame: ironically, marketing isn’t very good at marketing itself. It needs to be more overtly business-focused and show how what it does impacts both short- and long-term growth. Many never seem to be able to have these conversations.
Another factor is that many marketing tactics struggle to demonstrate any significant degree of success. This could be because these tactics are, in fact, pants, or it might be that marketing isn’t great at measurement. And if half of what you do doesn’t appear to deliver all that much, it’s easy to axe it.
Marketing departments the world over have invested shed-loads in all sorts of martech that promises to be able to measure everything and anything. The Gartner study showed that data and analytics commands 11% of total marketing budgets. But these systems often measure the kind of things that make them look good.
So, what can be done? First, marketers should simplify what they measure. Yes, they’ll need to look at some tactical performance metrics for certain activities but the CEO won’t care about that. Genuinely useful metrics include sales-accepted leads (over weaker marketing-qualified leads), pipeline velocity (how efficient you are at turning leads into revenue) and website-sourced revenue, which clearly shows marketing’s contribution to the bottom line.
Of course, if you have less budget to play with, the big question is where to invest? While we could get hung up on tactic vs tactic, that’s not going to help much. Instead, aim to focus on these three things:
- Invest in activity that makes you more relevant to the key real-world challenges your customers face
- Invest in activity that makes you more distinctive in the market so that when people think of your category, they think of your brand
- Invest in reaching the broadest number of potential buyers
The goal is to solve three common problems in marketing. First, that too many marketing campaigns are more about the brand than their customers. Second, that content is wholly undifferentiated, often bland, and very easy to ignore. Too many brands create content as if they face no competition for people’s attention. And third, that the focus on hyper-targeting the audience (often badly) cripples the reach of the campaign.
Your brand needs to stand out in as many ways as possible. This means finding a distinctive angle, discovering new ways to get closer to your customers, and using clear brand triggers to boost mental availability. Ironically, marketing on a smaller budget may actually help the sector to rediscover what really matters.