As the global economic downturn persists, many businesses are cutting down on their budgets across digital marketing functionalities – but is this the right approach?
As per experts, investing in marketing and advertising amid a recession period, businesses can increase their market share and make progress quicker when it ends.
In light of the widespread pandemic, it became apparent that the repercussions would have a significant impact on the marketplace. To keep up with the evolving consumer behavior, many brands have had cut back on ad spend and resources at the early stage of COVID-19.
Lately, different studies have been published focussing around the current market scenario and business models. The CMO Survey came up with its special edition, “COVID-19 and the State of Marketing” and came up with crucial insights.
A survey of 274 senior marketers from US companies was conducted to understand how the marketing budget had been lost or gained in March and April. The average change in the marketing budget is reported by +5.2%.
The study found that the marketing budget has instead increased for most organizations – with 41% of the marketer indicating the same.
Nearly 30.3% of the respondents noted that their budget had no chance at all, while 29% reported having decreased their marketing budget. However, there was a critical variance among B2B organizations.
The marketers from the B2B product organization reported a budget increase of +2.82% (on average). And the respondents from B2B services organizations noted an average budget increase of +8.74%.
Basically, this unprecedented time has led marketers to focus more on customer experience and social media. Businesses can enhance their digital campaigns by optimizing different channels and tools – this can help in scaling up and saving time.
Currently, consumer priorities have altered dramatically, and that is affecting category growth. With modern consumer habits, many brands noticed that it is changing their loyalty as well as channels where most conversions used to take place.
As per the survey, respondents said that they were putting 16.7% (on average) of their marketing budget into customer experience plans. This is up from 15.2 % of the marketing budget from the January 2020 survey. Similarly, the budget allocated for social media initiatives is 23.2% – which was only 13.3% in January.
Clearly, more market leaders are maximizing their performance on digital ad platforms like Google, Facebook, etc. in order to achieve better efficiency from their existing digital media budget.
Hence, it is safe to conclude that many businesses have recognized the significance of continuing investment – despite market depression to stay ahead of their peers.