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Your company’s overall goal is to grow but to achieve that, you have to invest in marketing to stay ahead of your competitors by continuously creating brand awareness, qualifying leads and keeping current customers engaged. B2B companies roughly spend 9% to 11% of their revenue on marketing.
How much should your company spend on your marketing budget? That all depends on your goals, resources, industry and the economy.
Based on this Gartner report, marketing budgets as a percentage of revenue have fallen 4.6% from 2020, a dip from previous years and the lowest at any point in the history of the survey. On the surface, this may seem like bad news for marketers.
At Kuno, we’ve actually seen an uptick in the demand for certain forms of marketing, so before you start slashing your marketing budget, let’s take a dive into some of these trends, what they might mean for your business, and how you can maximize your marketing budget to ensure you don’t damage your long-term revenue in favor of quick wins.
Leaders are using digitization to reach growth goals. According to Deloitte’s 2021 CMO Survey, digital marketing budgets grew 15.8% over the previous year. At 73% of companies, marketers are leading the organization’s digital transformation.
Rather than spending money on trade shows, print ads and other offline forms of marketing, companies are investing in digital marketing. The Gartner report shows that pure-play digital channels comprise just over 72% of marketing budgets with a big focus being on owned digital.
Considering that 45% of employees are now working remotely at least part of the time and will likely continue to do so in the future, how we do business has drastically changed and so has the way we target customers. Digital marketing is getting the funding as companies invest in Google ads, social ads, SEO web copy, SEO blogs and more.
We’re definitely seeing the demand for digital marketing at Kuno. More and more, our clients and prospects are seeing the need to increase their web presence and are seeking our help creating and implementing an inbound marketing strategy.
Whether it’s to communicate their sustainability story through a series of videos, create awareness around a new product line through webpage optimization, or to engage current customers and prospects through social posts and ads, our team is finding creative ways to help our clients get noticed amid the increasingly busy web traffic.
Now more than ever, content rules. While there are no guarantees, if your budget is tight and you can’t afford to take huge risks, investing in social marketing, SEO and digital advertising is a safer bet than other investments. As the Gartner report shows, they have a history of benefiting from increased marketing budgets and that initial investment can pay dividends for months to come.
Take SEO, for example. Most web searchers don’t look at anything beyond the first page or two of Google, so to get that coveted Page 1 ranking, and especially that Page 1 spot, you need a good SEO strategy. By strategically optimizing certain webpages and producing consistent, good-quality SEO content in the form of blogs, your business can draw organic traffic — visitors to your website who can then become leads and customers — generating gold at a modest cost.
If your website is your company’s digital front door that shows potential customers what you have to offer, social media is how your company interacts with current and prospective customers, giving them a human experience of your brand. Done correctly, happy customers will gladly share your content, serving as brand ambassadors.
Paid search exposes customers to your brand who may not have otherwise found you through organic search or social channels. It also gives you credibility and allows you to benefit from the repeated exposure effect, which can positively influence potential and current customers. People want to do business with brands they trust, and they don’t trust brands they’ve never heard of, so a paid search budget is often a worthwhile investment.
While you have needs unique to your company, there are a couple of things every company should keep in mind as they plan their marketing budget:
It’s easy to have a knee-jerk reaction to the pandemic and ensuing budget constraints. This means it’s more important than ever to spend strategically. Companies should evaluate what their team does well and what makes sense to outsource due to lack of time, training, interest, etc., among staff. They should also look at their customer journey and how that has changed. This doesn’t mean spending less money, necessarily, but it might mean allocating it differently.
If you’re fortunate enough to have a marketing budget surplus at the end of the year, use this as an opportunity to try new marketing channels or creative campaigns so that you head into the new year strong.
Marketing is a long game, much like chess. It’s strategic versus merely tactical. With sales, the process is more linear and the ROI is easier to measure. Both are important, but if you stop feeding your marketing budget, leads and sales will dry up along with your brand awareness.
Be realistic about growth goals. Are you setting your team up for failure by aiming too high? Are you not stretching your team enough? Can your current staff handle sudden, exponential growth? Companies that grow quickly but are unprepared can face negative consequences in the long run.
In addition to deciding how much you want to grow, determine which areas you’ll target for that growth. Should you limit your dollars to a digital campaign for a product launch or is it time for a brand refresh?
Whether you’re wanting exponential growth or need to grow more conservatively right now, marketing is essential for keeping brands top of mind and for collecting data that sales teams can use to turn prospects into leads. Even current customers could go elsewhere if they aren’t continuously nurtured along with leads.
One way to ensure you don’t drop the ball is to invest in a CRM to help you track analytics, qualify leads, manage content and more. As HubSpot Diamond partners, we’re trained in onboarding new clients and using data to help our clients make informed decisions.
If you’re still unsure about your marketing budget strategy, consider these digital solutions to help you strategize your marketing presence and get the most bang for your buck.