October is typically a time of year with special urgency for many in marketing.
For starters, it’s the beginning of Q4 and all the pressure that comes with trying to make the numbers for the year. At the same time, it’s also when all the business units and functions really begin jockeying for the next year’s budget.
There’s no shortage of opinions on how the budget should be allocated – I offer some views on this at the bottom of this post – but what I thought would be really helpful is reviewing some benchmarks from studies. To that end, I’ve poured over two surveys and re-visited a third to see what the wisdom the marketing crowds had to say about 2020 marketing budgets.
The CMO Spend Survey by Gartner
Budgets fell modestly this year from 11.2% of revenue to 10.5% but most CMOs (61%) expect “their budgets to rebound in 2020” according to The CMO Spend Survey by Gartner. The consulting and tech analyst firm polled 340 marketing executives across the US and UK for its study.
The survey also provided some insight into how that marketing budget is being allocated:
- 26% on marketing technology (martech) down 3% year-over-year;
- 26% on paid media; up 3% year-over-year;
- 22% with outside agencies; however, 63% of marketers have moved marketing work in-house, a trend observed in PR and creative;
- 16% on digital channels; however, “offline advertising and TV spend remain strong, both commanding a share of 7% each of total marketing budgets”; and
- 16% on marketing analytics.
“As organic reach on social platforms plummets to zero, and confidence in influencer marketing is challenged, paid media presents more pros than cons for CMOs,” according to Gartner analyst Ewan McIntyre.
Indeed, I’d say that’s true about owned media and earned media too.
The CMO Survey
A few months back I took a thorough look at The CMO Survey by Christine Moorman. The biannual survey queried 341 senior marketers about an array of topics including budget. Here’s the budget data gleaned from the report:
- Marketing budgets have grown 6.3% in the last 12 months;
- Senior marketers expect marketing budgets to grow 8.7% over the next year;
- 40% of budget goes to paid media;
- 16% of budget goes to print media;
- 8% of budget goes to paid social media;
- 6% of budget goes to paid search;
- 4% of budget goes to display; and
- 6% of budget goes to training and development (T&D).
While the Gartner survey above provides marketing budgets as a percentage of revenue – this study provides a benchmark as a percentage of the overall budget. It found marketing budgets come in around 12% of the overall company budget (graphic and summary by MarketingCharts here).
Budget Trends by Kantar Media
Kantar Media fielded a global survey of 488 marketers that provided some insight into how marketers make budget decisions. I suspect, given the company Kantar keeps, the survey sample is heavily weighted towards advertisers, but still, the thinking is useful.
For example, the survey asked, “Which factors most influence how you allocate media budget among channels?” Here’s how the answers stacked up:
- 66% said “referred channels for our target audience, based on research”;
- 63% said “channels that are appropriate for specific campaign objectives”;
- 56% said “channels where our target consumers are most receptive”;
- 56% said “channels that have been successful in the past, based on research”;
- 55% said “channels that can be easily measured and/or demonstrate ROI”;
- 53% said “channel costs/budget”;
- 43% said “new marketing channels/marketing industry innovation”;
- 26% said “ease of measuring sales response”;
- 24% said “channels that our management trusts/prefer”;
The survey was conducted around the mid-year mark in 2019 and also asked about where respondents were thinking about spending more or less in the next year. Here are the top areas the survey found respondents are thinking about spending more:
- 84% said online video;
- 70% said social networks;
- 63% said podcasts;
- 54% said advanced TV (advertising lingo that basically means streaming); and
- 52% said online display ads; (I have a bridge for sale too!).
The areas where respondents are spending less should be no surprise:
- 70% said magazines; and
- 66% said newspapers.
3 Recommendations for B2B Marketing Budgets
In the opening of this post, I promise some perspective on budget allocations. Below are three areas for investment that I hope give you something new to consider.
1) Consider investing in distribution.
Marketing already invests a lot in content creation. Too often, when we finish creating whatever that is, and then boom…we’re onto the next thing to create. We could generate value by putting some hard thinking into distribution.
I suggest thinking about distributing existing content elsewhere. If you do this as part of an overall content marketing program, then the investment both supports lead generation AND growing your own audience and subscriber list.
Consider these sources:
- Paid social media – idea for growing exposure of existing thought leadership content, growing subscribers and showcasing your earned media.
- Email takeovers – some trade media publications offer this option but call it something else. In essence, you provide the copy and they send to their subscribers. Often B2B marketers will use these to send white papers and pitch webinars but again thought leadership content is a good option here. If you summarize white papers or webinars and link to the gate in a blog post, then you have got the best of both worlds. If you work for a large organization that competes with other business units to send marketing emails through a central marketing agency, these email takeovers are gold.
- Newsletter links – every industry has newsletters and most of them will sell sponsored links. Look for the ones high up in the newsletter, typically the first or second slot. These sell out pretty quick, so I suggest buying a few, getting a bulk discount, and plan on using them as part of your bigger marketing pushes in 2020. Chances are if you sign a contract, the publisher will work with you on terms, so the expenses hit your books in whatever quarter you do the send.
- Start your own newsletter – email newsletters have come back in style as organic reach on social media has declined. In my view, email newsletters are the original content marketing. It’s a slow build, but when you look at a competitor and feel jealous because they have 100,000 subscribers on their list, it’s because they started in 2012 and kept at it.
2) Flip you spend from tier 1 to tier 2 analysts.
If you’ve ever tried to do a webinar with a tier 1 analyst, you’ve probably realized you can easily spend $40,000 and get a cookie-cutter webinar with lot of red tape: it’s recorded on their platform – so you don’t “own” it, you can only use the recording for a year and the analyst can’t really say much beyond what’s in their published research already. Forget that – and use your analyst inquiries every month instead.
You can easily get four webinars with a tier 2 firm for the price of one with a tier 1 firm. They are also typically willing to do much more to help promote the event: open to interviews that you conduct for your blog, provide custom quotes for landing pages and press releases, and give you a share on their social channels. When the webinar is over, you can still drive value by repurposing the content for blogs, presentations, sales enablement tools and more.
If you do a couple of these and the relationship is going well, then there may be other opportunities to pursue for white papers, studies, surveys and other forms of content that support lead generation. Generally, I put consultants into this category too, and if you are interested in doing influencer marketing in B2B, this is my blueprint for getting started.
3) Audio and podcasts.
Audio is the last mile in marketing. Broadly, I’m bullish on audio because you can give your undivided attention to audio while doing other things – in a way that’s impossible with video or text. It’s only a matter of time before the voice interface supersedes text-based searches.
There are really two ways for marketers to get in the game in 2020:
- Develop your own podcast. You can do this completely on your own – and teach your team new skills at the same time – or you can hire someone. Sweet Fish Media and The Mission are two companies that will produce a podcast for you.I predict podcasting is going to be like corporate blogging: a lot of people will rush to do it, get mired in corporate rules and approvals and die on the vine. Those that are in it for the long haul will see big rewards in 2-3 years.
- Sponsor a podcast. People that listen to podcasts will tell you they often feel like they really know the hosts on a personal level – even though they do not. This makes a huge difference when the host starts reading the sponsorships: the pitch is coming from someone the listener knows. For now, sponsoring podcasts is relatively cheap, and some podcast hosts have done well to embrace “sponsored” interviews. How this is done really matters. See the “Snake Oilers” segment of the Risky.Biz podcast for an example in cybersecurity.
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Have you seen a survey or study on 2020 budgets worth a look? Feel free to share in the comments to tweet me up.
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Image credit: Unsplash and respective studies