No Matter the Budget, Here’s How to Optimize Your Marketing Spend
Marketing budgets are often small but mighty. Although it may only be a fraction of a company’s overall budget, it’s expected to deliver a significant return on investment. Audience Audit’s 2021 Agency Edge research found that 37 percent of agency clients across the United States have an annual marketing budget that’s less than $250,000. Through our own research study, we found that 58 percent of business marketers have an annual marketing budget that’s less than $250,000.
Deloitte’s 2021 CMO study concluded that marketing budgets are on average 11.7 percent of a company’s overall budget, a slight decrease from their 2020 survey but still a record high compared to previous years. Gartner’s 2022 CMO survey found similar results. They said that after a dip in 2021, current marketing budgets average around 9.5 percent of a company’s total budget.
Although there may be slight statistical differences between studies, it’s safe to say that marketing budgets are typically one-tenth of an overall company budget. But as businesses see more of a value in marketing, marketing budgets will continue to grow. It’s up to business marketers to optimize marketing spend—i.e., get the most out of their marketing budgets—so they continue to deliver value for their organizations.
Hurdles that Get in the Way of an Optimized Marketing Spend
Our last post revealed three distinct attitudinal segments of business marketers, including how they differ and their thoughts on their organization’s marketing success and optimization. To think about optimization even further, there are three parameters we’re using to define this: prospect activities, differentiation, and marketing strategy and execution efficacy. These aspects of marketing form the building blocks of optimization.
Our survey asked respondents to rank their organization’s abilities in each of these three areas. Overall, 61 percent of respondents say their organization has a good grasp on retaining existing customers, a higher rating than any other factor. Additionally, about half of respondents rate their organization favorably on reaching ideal prospects, differentiating themselves, and marketing execution. Although there’s always room for improvement, here are some recommendations for business marketers to get the most out of their marketing budget.
- Focus on optimization. If you’re not thinking about your marketing efforts in relation to your customers’ needs, nothing else matters. People don’t buy what you make and how you do it, they buy based on how it will benefit them.
- Mix it up. You need the right mix of digital marketing to be successful. This can include social, digital, paid ads, podcasts, webinars, and landing pages. People interact with brands an average of 26 times before making a purchasing decision. That means your digital marketing mix is more important than ever.
- Develop a data-driven mindset. Digital advertising has a wealth of insights, and these important questions should guide your strategy:
- Is your tech stack giving you the insights you need to make the right decisions?
- Are your automation tools too strong or too weak for where you are on your marketing journey?
- How are you using search engine optimization (SEO) to drive content and advertising-driven decisions?
- Are you using the keywords your audience searches for on your website and turning those queries into customers?
- Do you have the right people in the right marketing positions?
Measuring Marketing Impact
Marketing leaders are the driving forces behind marketing impact. Their performance can make or break marketing initiatives. Therefore, we asked respondents to tell us how their organizations evaluate marketing leadership performance.
For respondents currently occupying marketing leadership positions, 56 percent say their organization evaluates their performance based on the number of new customers their company acquires. 52 percent are evaluated by the revenue that’s generated by new customers and conversion rates on marketing activities. They’re also evaluated on ideal prospect relationship building, which many respondents say their organization could improve upon.
Although marketing leaders are evaluated on many areas, customer acquisition activation should always be a primary goal. To do that, you must have insight into customer buying habits and the customer journey. For example, do you know how long it takes one of your customers to commit to purchasing? It’s also important to have a strong strategy, an innovative tech stack, and firmly established and achievable expectations that enable you to shorten the sales cycle. This has the highest chance of success when sales and marketing work together. This will let you know if you’re going after the right customers or if the net you’ve cast is too wide or too narrow. It’s all about a strategy-first mindset.
Using Integrated Marketing to Your Advantage
To help you get the most out of your marketing budget, view your marketing through the lenses of owned, shared, earned, and paid media. Together, these four categories reflect integrated marketing.
- Owned media includes any marketing asset created by and intellectually held by your organization, including webinars, blogs, and designed downloadable content.
- Shared media includes marketing content created in a public or private venue, which can be co-created and/or shared amongst people, including organic social posts and social forums.
- Earned media includes media that reaches your audience through third-party channels, such as influencer and media relations.
- Paid media includes any marketing initiative that involves an up-front cost to launch, such as paid social ads, sponsored posts, and lead generation.
Our survey found that social media marketing—a form of paid or shared media—was the most common type of marketing, and 69 percent of respondents say their organization plans to pursue it in the next year. Additionally, 54 percent plan to update their website, 52 percent plan to engage in email marketing, and another 49 percent will invest in content development. These stats reflect how marketers prioritize owned media. To find more insights into what types of marketing these leaders favor, check out our last blog post.
The big takeaway here is that it’s never a good strategy to put all your eggs in one basket. Without a strong marketing strategy supported by an integrated mix of tactics, the likelihood of someone interacting enough times to make a purchasing decision is highly unlikely. Only by meeting people where they are (rather than where you are) can a brand be successful.
To learn more about each segments’ behaviors and the opportunities they present, check out our entire executive summary and webinar. And to further ignite your own marketing strategy, check out our podcast.