Where are Enterprise Marketers Allocating Their Budgets?
Not a surprise, spend on digital channels is continuing to increase while spend on more traditional channels such as newspapers and magazines is on the decline.
In a recent study by Gartner, digital and social channels garnered a healthy portion of marketing spend. Over 50% of budgets were allocated to websites, digital commerce, mobile marketing, social marketing and digital advertising.
However, overall growth of marketing budgets is stalling and slightly on the decline this past year. Average budget over the past few years has hovered around 11% of company revenue, with it declining from 11.2% to 10.5% this past year.
According to Gartner’s research, despite external and internal environmental signals, CMOs remain optimistic. Gartner asked CMOs about the likely impact of economic and business climates over the next 18-24 months on their company’s ability to meet business performance goals. Surprisingly, a whopping 88% of CMOs stated they believe these future impacts will be positive, with more than half (53%) believing these impacts will be strong.
CMOs look to a variety of factors when tracking the business and economic climate. The top three areas in Gartner’s research included:
- Consumer Spending (32%)
- Marketing program or initiative performance in the previous year (30%)
- Budgetary strategy within the enterprise
In terms of capabilities supporting marketing strategies, analytics and insights top the list. The top three most vital capabilities include:
- Market research and competitive analysis – 32%
- Marketing analytics – 32%
- Digital commerce – 31%
Recent research by Kantar also parallels some of the same findings as Gartner, especially in terms of digital channels. Online video spend is expected to increase by 84%, social network advertising by 70% and podcasts by 63%. At the same time, newspaper advertising is decreasing by 66% and magazine spend by 70%.
Video advertising is gaining more and more traction as a way to capture the attention of both B2B and B2C audiences. Check out some of these great stats from an infographic by Raw Shorts.
- 90% of video viewers say that product videos have helped in the decision-making process
- Video marketing in email increases click-through rates by 63%
- Videos are shared on social media 1,200% more than images and text combined
- 64% of consumers are more likely to buy a product after seeing a video about it
Social media is now ingrained into people’s daily lives and routines. For some of the younger generations, social media is also the place to discover new products and services and even make purchases.
Given the growing importance of social media, brands are increasing their investments and finetuning their strategies to stay relevant and capture social share. Video, in-app purchase capabilities and influencer marketing on social channels are all expected to be major trends as social platforms continue to evolve.
The huge increase in podcast advertising may be somewhat surprising nut podcasts are becoming more accepted by consumers. A study from Advertiser Perceptions found 39% of advertisers and agencies currently advertise in podcasts (up from 32% in 2018).
According to the Kantar research, the growing focus on podcasts as a channel is being led by agencies, with 75% of agencies increasing their focus on podcasts. In fact, approximately 25% of consumers have made a purchase after hearing a podcast ad.
So how well are marketing budgets paying off?
Most marketers say they are measuring ROI for their marketing activities, however they may not be measuring them frequently enough. According to the Kantar research, only about one-quarter (26%) of the media companies surveyed said they measure ROI continuously. More advertisers (38%) and agencies (31%) tend to measure ROI on a continual basis, but a similar percentage of respondents say they only measure ROI either annually or less than once a year (34% for advertisers, 31% for agencies and 22% for media companies).
Despite the efforts to measure ROI, survey results from Brand Keys show that measuring ROI is a top concern for 97% of CMOs.
With the constant flux of inbound and outbound marketing channels, marketers must stay on top of the trends to create a marketing mix most apt to appeal to their target audience. What may work one year may be totally out of sync the following year. With a plan in place to measure outcomes, band marketers can be a bit more confident they are headed in the right direction.