Survey Shows How Digital Budgets Will Increase In 2021

0

Digital advertising business-to-consumer (B2C) marketing budgets are expected to grow by 78% in aggregate in 2021, according to Gartner’s 2020-2021 CMO Spend Survey.

Among CMOs, 78% cite rising budgets for social in 2021, 71% for mobile, 71% for websites, 69% for SEO, 65% for partner and affiliate marketing, 64% for paid search, 63% for email marketing, 58% for offline advertising, and 57% for event marketing.  

CMOs said they want to protect their investments in technology and people. “Thirty seven percent of respondents said they reduced permanent contract or employee head counts, said Ewan McIntyre, VP analyst covering marketing leadership and management at Gartner. “CMOs will need to look toward people to drive efficiencies.” 

Gartner broke out the spending survey in two parts this year. Part 1 examines how CMOs plan to maintain and grow revenue into 2021. Part 2 highlights spending priorities and indicates optimism for 2021, despite numerous headwinds.

A total of 432 marketing executives participated in the survey, from North America, the U.K., France and Germany at companies with $500 million to $20 billion or more in annual revenue.

The findings analyze the immediate impact on marketing strategies and spending as a result of COVID-19, as well as how budgets, spending and strategic priorities will evolve heading into 2021.

How did marketers budget media allocations across 10 channels so far this year? CMOs participating in Gartner’s 2020-2021 CMO Spend Survey said they spent 13.5% of digital advertising, including display, video or ads on platforms like Amazon and YouTube, while 9.4% went to offline channels and 9% went to event marketing.

COVID-19 increased the emphasis on digital channels during the early months of the global pandemic as consumers turned to online for information and entertainment.

Some 11.3% went to social marketing, 10.4% went to websites, 9.8% went to search engine optimization, 9% went to affiliate channels, 8.9% went to email marketing, and 8.6% went to paid search.

Among the CMOs surveyed, 73% expect COVID-19s near-term negative impacts to be short-lived. Despite their positive outlook, 44% face midyear budget cuts this year as a result of the pandemic. Eleven percent expect their budgets to face cuts of more than 15%, and 5% expect a moderate cut.

“There was an expectation by CMOs that COVID would be short lived,” he said. “Initial cuts were really a response based on cash flow.”

McIntyre said that although it’s great to be positive, caution heading into the second half of the year is required.

Prior to COVID-19, marketing budgets had started 2020 strong, slightly up compared with 2019. The average budget of CMOs surveyed in North America, the U.K., France and Germany was 11% of company revenue.

How have CMOs cut budgets as a result of the pandemic? Some 44% of respondents cancelled events, while 41% delayed campaign launches and 37% reduced headcount.

Other actions include the 61% who launched special COVID-19 communications initiatives, 47% who deployed listening tools, and 42% who developed scenario plans.

Still, CMOs continue to pursue relatively conservative strategies that look at how they can fuel growth, with 79% primarily relying on existing markets. Their views are in contrast to other C-suite executives.

About 45% said they will fuel growth through the introduction of new products to existing markets, while 34% look to drive growth by increasing the sales of existing products to existing customers.

When asked how they will approach new product development, 36% said they will do this through strategic partnerships, while some 32% cited creating products that are better suited for customer needs and 32% said it will be done through research and development investments.

Brand strategy has become one of the top of marketing capabilities, rising from its position near the bottom of the list in 2019. About one-third of CMOs now place it in their top three.

Some 29% of respondents still consider marketing analytics a top-three capability.

Personalization lost emphasis in 2020. Only 14% of respondents reported personalization and testing among their top-three capabilities

Some 57% of respondents across all industries believe performance will return to “business-as-usual” in the next 18 to 24 months, but confidence varies among specific industries. Just 22% of respondents in travel and hospitality believe they will see a “marked or significant positive impact.”

Respondents from consumer products brands also show some concern about the future. Only 34% believe that during the next 18 to 24 months, business will be very positive.

Credit: Media Post

You might also like More from author

Leave A Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.