At the start of 2020, CMOs on average had a reasonable expectation to receive 11% of revenue as a budget, but then the pandemic hit and when surveyed in April and May, 44% reported mid-year budget cuts. This makes sense because at the same time almost 60% of CFOs surveyed had started planning for a second wave of the pandemic.
Another way CMOs are managing tighter budgets is to bring production activities – like social, creative, and content creation – in house. Nearly 33% of surveyed CMOs were shifting production work to internal resources while they continue to rely on external agencies for strategy, messaging, and martech expertise.
This shift certainly reduces expenses, though it also requires extra attention to communications and coordination so that key functions don’t inadvertently slip through the cracks and assignment of responsibilities are understood across the combined teams.
The pandemic’s impact on marketing channels is not surprising. Early in the pandemic, digital advertising and paid search saw a sharp increase and made up almost a quarter of budgets. There was a simultaneous sharp decline in event marketing that has been shifting to virtual events. But virtual has created its own challenges in how to effectively connect with and engage the audience.
The result of these increases and decreases has caused channels to evolve as well. Most B2B CMOs believe they will spend more money on digital advertising, email, and mobile marketing. 33% of CMOs cite brand strategy as their most vital strategic objective. This is a big jump from last year when it was near the bottom of the same list.
Historically advertising in recessions has proven to be very effective because when companies cut back on their ad spend, other advertisers take advantage of the void to reposition a brand or introduce a new product.
Advertising during down markets also projects an image of corporate stability during challenging times. A great example of this is how Amazon has been focused on its brand strategy by releasing commercials humanizing the company.
The only area that doesn’t seem to be affected by COVID-19 is marketing technology (martech) budgets. Unsurprisingly, 68% of CMOs expect their martech budget to increase next year. But at the same time, most marketing leaders (58%) acknowledge the difficulty in fully utilizing the full capabilities of their existing technology. And part of that challenge is the struggle to upskill existing talent to extract these investments’ full value.
To improve the utility of their technology spend, CMOs are creating a centralized catalog of currently deployed marketing technologies. This provides a look into what is being used and what isn’t. Try to take it a step further by creating KPIs for each technology investment such as improved campaign performance or higher productivity. This can help identify which investments aren't pulling their weight.
It’s time to be flexible and adjust your plans to become more adaptive. The coming year is still going to be quite unpredictable, but that doesn’t change your needs for the right tools, processes, and insight to evolve your strategies and priorities.
So what are some practical steps to take? Here is a list of ideas to get you brainstorming:
Shifting your marketing strategy to allow for agility and adaptability will not only help navigate the volatility of the upcoming year, but it will also set you up for success regardless of what the next normal looks like.
Resetting your marketing foundation for greater agility will create a leaner, more efficient machine that will build growth for 2021.