After spending 2020 in crisis mode, marketers are ready to boost their investments in 2021.
A survey by the CMO Council of 200 global members revealed 65% of marketers plan to increase their marketing spend in 2021 after conserving cash for the past year. Global ad spend declined by 5.8% in 2020, per GroupM’s December forecast.
Just 10% plan to reduce their marketing budgets from 2020, and 24% expect to keep their investment stable. The survey was taken under the premise that an effective vaccine rollout will be completed this year.
“2020 was a recalibration,” said Donovan Neale-May, founder and director of the CMO Council. “Everyone was rethinking and redirecting spend.”
CMOs found major savings last year as events and trade shows, which typically take up 25% of marketing budgets, were canceled, Neale-May said. “All of a sudden, those budgets are freed up.”
Marketers are now reinvesting that money in technology, automation and transformation — a priority that remained consistent across companies of different sizes and regions. But they’re also investing in talent with proficiency in data and technology to make those tools work for their business.
Seven out of 10 marketers reported a significant and growing investment in marketing technology, while just one in four plan to downsize or restructure their marketing organization this year.
“Even though they're automating, they need higher levels of competency in technology and digital,” Neale-May said. “Those folks are more expensive and require more investment.”
As marketers lean into automation, they’re looking to leverage customer data to not just acquire new customers, but also drive loyalty.
Marketers surveyed flagged customer data, effective campaign execution and improving operations and performance as the most important areas for transformation this year. And more than one in two marketers said they want to optimize the customer journey, while more than one in three want to boost acquisition and retention using data and digital innovation.
“You have to be smarter about how to generate revenue from existing customers,” Neale-May said. “Some of the biggest [customers] are also the least profitable. How can you upsell, cross sell or add more value?”
That requires more collaboration across lines of business and departments including sales, experience, logistics, procurement and purchasing. Marketers ranked cooperation between lines of business as the number one priority for their organizations this year, followed by lowering costs, increasing efficiency and better localizing global campaigns.
It’s still unclear whether marketers will have an appetite to return to events and trade shows as robustly as they had before the pandemic, and many are measuring the impact on their business this year. If there is no material change, many plan to reinvest those budgets into automation and digital transformation.
Marketers were already frustrated with the lack of transparency and measurability of events and felt the pressure to do so to “keep up with the Joneses,” Neale-May said.
“Huge sums of money are thrown at these events,” he said. “If companies can redirect that spend to demand generation, automation or insights and analytics, there's more value to be obtained.”
As marketers become more customer-centric, agencies are starting to lose their prominent place in the marketing organization because they don’t own the customer dataset, Neale-May said.
“Marketers have figured out that their area of authority has got to be the customer, and it's not going to be delegated to [other] organizations,” he said. “Agencies don't have access to all of the data that internal stakeholders do.”