To expand its budgetary reach and become a beneficiary of data, tech, and digital development initiatives, marketing must be involved from the beginning of digital transformation projects.
Marketing budgets are under immense pressure and scrutinized during times of business uncertainty, leaving marketing teams scurrying to alter their plans to accommodate for shrinkage while still delivering the revenue growth the business requires. According to Gartner’s CMO Spend Survey 2021-2022, marketing leaders are experiencing some of the steepest budget cuts in years, with some cuts as high as 15% of total marketing budgets.
Marketing is a crucial activity for any organization, and in today’s environment, digital marketing is a critical component of marketing, as a large number of customers either look online before purchasing or buy online right away. With the global pandemic, it’s more crucial than ever to plan an efficient digital marketing budget.
Also Read: Boosting CX and Driving Loyalty with Immersive Experiences
Marketing budget cuts
Aside from the obvious financial constraints caused by the global economic downturn, a number of other issues are contributing to cuts in marketing budgets. First, marketing dollars are being redirected to other areas of the organization, such as enterprise-wide, large-scale digital transformation efforts that promise everything from redesigned business models to best-in-class customer experiences.
Marketing must establish a claim in digital transformation efforts, demonstrating that the organization’s investment plan is on the right track through improved customer outcomes.
Depletion of skilled digital marketers
Marketing budgets are being depleted in more ways than one. It’s also the loss of highly experienced digital marketing expertise, which is being repurposed for large-scale digital transformation initiatives that are a top priority for CEOs and CIOs – and a promising career path for ambitious marketing executives. As more important marketing responsibilities are moved in-house, marketing leaders must evaluate how to structure in-house teams to foster cross-functional collaboration, manage career advancement prospects and provide great employee experience. To gain agility, work efficiently with other departments, and bring in new skills, marketing must reengineer its agency, in-house, and tech partner ecosystems.
Also Read: Imperative of an Omnichannel Approach for Excellent CX
More CMOs are incorporating experience, purpose, and service into top-funnel digital marketing activities, investing in insight-led customer journey transformation through advanced analytics, and funding it not through digital marketing budgets but through cross-organizational alliances with tech and data leaders. Marketing must change its own marketing spending patterns by focusing on improving the whole consumer buying experience rather than on creative activities that provide little business value.
Key aspects to focus on
CMOs must refocus their brand and marketing strategies on acquiring longer-term consumer value rather than on creative endeavors that are unlikely to result in growth. They must also examine the entire consumer buying funnel, from top to bottom, in order to discover performance enhancements that will result in a higher return on investment.
Marketing leaders must ensure that enterprise-wide digital transformation initiatives are equally focused on marketing use cases such as personalization, real-time analytics, and hyper-targeting capabilities in order to maximize digital marketing expenditure.
Forming funding alliances with the CDO and CIO, who can utilize brand and digital marketing KPIs to measure the efficacy of their data mobilization plans, technology upgrades, and digital platform implementations, is another critical action that marketing leadership should focus on.
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