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The Future of Marketing Budgets: Bleak or Bright?

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Friday, October 2, 2020

Marketing managers are forever being told it’s time to tighten the purse strings, and that’s never been truer than in the wake of the COVID-19 crisis. With genuine uncertainty about what the economic landscape will look like when the world emerges on the other side of the pandemic, CMOs have seen drastic cuts to their marketing budgets as executives seek to contain revenue fluctuations.

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The adversity of the last six months has led to some debate around whether budgets will remain low, and how marketing teams can adapt to a new way of doing business. It’s certain that things will change, but although the last few months have been tough in many ways – and there are, without doubt, further challenges ahead – it’s not all doom and gloom.

COVID-19 causing budget cuts

Firstly, there are real causes for concern.  The 2020 CMO Spend Survey from Gartner reports that 44% of CMOs have seen their budgets cut in the early months of 2020 as a response to the pandemic. If that wasn’t enough, brand marketing is about to become much more important as an overall function of business as economies around the world enter recession and the fight for survival begins.

So that’s lower budgets and higher pressure which sounds bleak.

It’s not all doom and gloom

National lockdowns have seen a great digital migration. While consumers were stuck at home, they turned to online platforms more than ever before, resulting in an increased use of and confidence in e-services (such as healthcare apps, food deliveries and video networking tools). Coupled with increased screen time, this can only be a boon for marketers going forward.

Traditional ad spend has been on a downward curve for some time, and the pandemic is set to accelerate that, as people spend more time at home using the internet, which means marketers know with more certainty where they can reach their intended audience.

The Gartner CMO Spend Survey also found that C-suite business leaders are beginning to prioritize brand strategy over data analytics. This isn’t to say a well-informed, data-driven approach is no longer desirable, but it does mean that marketing is going to continue to become more integral to company operations. This, in turn, means more value placed on the work of marketing departments which could see budgets increase as more certainty returns to the marketplace.

One thing there is currently no uncertainty about is that digital services are on the rise and people are spending more time than ever on social media. An Econsultancy survey indicates a rise of up to 54% in the amount of time people are spending online since the outbreak of the pandemic, and Deloitte’s CMO Survey hints at how this trend might affect marketers, with around 61% of companies having shifted resources to improve customer-facing aspects of their business, such as social media feeds and other digital interfaces.

These trends indicate a bright future for marketing budgets; even though costs are being cut in the short term, a greater emphasis on brand positioning and strategy could lead to increased budgets (at least as a percentage of overall company spend) in the long term.

How to optimize marketing budgets for the ‘new normal’

At the core of any successful marketing strategy is the ability to build a meaningful and lasting relationship with your customers, something that drives word-of-mouth and encourages repeat business. In the post-COVID world, marketers can continue to do this by improving CX interfaces in digital offerings and adding corporate support to social issues. In times of crisis, consumers look to those brands with authentic and laudable values, so a successful social media strategy can be an excellent way to help strengthen your brand without taking up too much of your marketing budget.

It’s likely that the move to digital channels will be a lasting one, as consumers opt for the combined benefits of cost, convenience and safety that online shopping environments offer. Marketing teams can capitalize on this by building and promoting strong direct-2-consumer (D2C) ecommerce channels, which can be done in a matter of weeks and deliver rapid revenue recovery.

In addition, using your social teams to increase engagement with your consumer base will keep your brand relevant and socially aware while building trust at a low cost. As consumers become more sensitive to corporate ethics and keen to support those that offer value beyond a product or service, marketers will need to prioritize messaging on social media and should focus on accelerating customer relationship management (CRM) strategies.

This will necessitate a greater focus on content across the board. The ability to tell great stories has always been central to marketing, and you can navigate the fallout of COVID-19 by continuing to tell stories that your customers can connect to, and connecting those stories to the solutions you offer, which will position your organization as ahead of the curve and make marketing budgets go further.

Final thoughts

There’s no denying that marketers can expect some challenging times ahead, and the likelihood (at least in the short term) of tighter budgets. However, there are opportunities to really optimize your marketing strategy and get ahead of the competition by adapting to changing consumer trends. This has always been the case, but the prominence of social media and a new surge of digital natives means marketers can reach a more receptive audience with more ease than in the past.

Getting your messaging right in a social landscape fraught with controversy might be a tough task, but with social media offering a direct line to consumer feeling, it can be done without making a huge dent in your budget, and arguably offers an unprecedented chance to build brand reputation and customer loyalty.

The future of marketing is uncertain right now, but that isn’t to say you can’t prepare for the future. Register or this digital event as we dig deeper into building a powerful brand.

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