Forrester expects the investment plan for marketing automation will see a lift,
even if the marketing spends globally keeps on falling through 2021.
With the widespread COVID-19 outbreak, the US economy has been severely impacted and staggering to rise again. The country is suffering from unprecedented unemployment rates as organizations undergo shutter spanning different industries.
As of now, it is difficult to understand the next steps, until businesses begin to re-open once the restrictions are lifted. Despite this uncertainty, Forrester found that many CMOs are confident and planning to invest more in marketing automation amid the crisis. The report titled “The 2020 COVID-19 Crisis Will Stun US Marketing” noted that – “The world turned upside down for all of us in March 2020…CMOs can’t help but ask: What in the world do I plan for now?”
The study outlines three primary possible recovery scenarios for the marketers –
1. A late-2020 recovery,
2. A mid-2021 recovery, and
3. A late-2021 recovery.
The most likely probability is the “mid-2021 recovery”, and even in the best-case scenario around the late-2020 recovery, the CMOs are most likely to lose $222 billion of their marketing budget.
Basically, marketing programs for most businesses are likely to be cut. Forrester predicts a nearly 28% drop in US marketing by 2021. The advertising budgets were already slashed in the uncertainties, and many brands put an end to their virtual SaaS investments. Experts have noted that even prominent brands are holding back payments to control cash flow at this point. And luckily, it appears that the cash crunch is ending, and the SaaS investments for B2B brands are about to pick up.
Forrester expects that CMOs will trim down spend on the marketing technology and ad technology solutions like DSPs into 2021. Besides, they will reduce internal headcount and marketing services, leaving on the whole marketing spend at the beginning of 2022. It is about 30% less than what it was in 2019. Many marketing services will be losing nearly $15 billion by the end of 2021. Consequently, marketing companies will also lose about 30% of their staff, and with salaries reduced by 30% in 2020. Even in 2021, they will encounter a salary reduction of 5%.
As mentioned in the report, “These steep cutbacks will test customer experience (CX) and
marketing program quality…Consistently demonstrating brand promise at scale could be difficult with smaller teams.” Despite the new low of the marketplace, CMOs still hold tight to their marketing automation platforms. Most of them are hopeful and continue to invest in the marketing automation platforms – as per Forrester’s mid-2021 recovery scenario. The study claims that automation will save martech from a downturn. Martech is forecasted to see a 4% decline overall, while the marketing automation platforms will surge by 3%.
The CMOs will lower the investments in demand-side platforms and data management
platforms. Instead, the focus will be shifted to the solutions that can deliver optimization
and efficiency, and Forrester has already noticed this emerging trend.