Marketing budgets are exploding, even as the pandemic continues to spread in some countries.
Experts predict that total marketing spending in the US will eclipse $250 billion dollars in 2021.
But how do CMOs actually spend that money?
What is most important to the bottom line going forward?
And how are they going to use those marketing dollars in a whole new era?
Let’s take a look.
How do CMOs spend their budget?
No matter what industry you may operate in, there are a few things that are going to eat up a lot of your marketing budget.
According to top CMOs, those include labor, marketing tech, agency services and paid media.
As you can see below, each takes a pretty equal bite out of the total budget:
In one year, the total value of all marketing tech companies rose 22% to $121 billion! So you can expect more of the budget to start going towards marketing tech and automation moving forward.
Especially because 68% of CMOs expect to spend more on marketing tech in 2021.
Digital channels, such as digital ads, social media marketing and paid search took up 81% of the budget, with event and offline marketing efforts making up the rest.
Going forward, many CMOs say that the budgets used towards those efforts will actually increase. In fact, 78% believe that they will spend more on both digital ads and social media marketing in 2021.
Event marketing and offline marketing will take the biggest budget hit, with about a quarter of all CMOs saying both will decrease this year.
Unsurprisingly, the money that would have gone to in-person events and conferences was slashed, with 44% of them cancelling events or going virtual.
In the midst of the pandemic, marketing spending dropped to $244.7 billion in the US, but experts think it will jump back up to $250 billion or more in 2021.
About half of all CMOs think spending will be back to normal in the next year or so, as the world starts to reopen.
However, 44% say that their budgets will shrink by 5-15% after years of stability.
Most seem pretty focused on staying in their lane and not introducing a ton of new products to new markets. Only 6% of CMOs said that their companies would be taking that approach in 2021.
The majority, or about 80%, said they will stick to existing products and only introduce new products in an existing market.
Branding, branding, branding
In 2021, branding is going to be very important across all industries with 33% of all CMOs saying it was one of their top strategic capabilities.
This was the first year that brand strategy was in one of the top spots, and overtook marketing analytics as you can see above.
Analytics seems to have slipped down in importance because many CMOs are still not sure how to implement an effective analytics platform. So proving the need for an expensive marketing analytics platform to the rest of the company becomes a lot harder when budgets are tight.
Going forward, many CMOs believe that brand health is going to be more important than brand awareness, which makes a lot of sense.
During a pandemic or other disruption in “normal” life, it’s going to be a lot easier to sell more to current customers instead of moving into new industries or demographics.
So making sure your brand is still hitting the right notes with those current customers is going to be crucial.