Why is now the time to invest in marketing (even if sales are up)?
Traditionally, a company’s marketing budget has often been the first thing to get cut during down times, and the last thing to get (fully) restored during booming times. The last couple of years have been a case in point. In 2020, many CMOs reported cuts above 15%; and despite initial optimism from marketers for 2021, this year has seen a drop of almost 5 percentage points in budgets throughout the advertising world (11% in 2020 down to 6.4% in 2021).
With these figures in mind, why is now actually the right time to invest in your marketing efforts (even if your sales are trending upward)?
A Balanced Marketing Mix Fuels Short-Term and Long-Term Growth
Perhaps it’s understandable why many executives subscribe to the logic of cutting the marketing budget first — after all, not all marketing efforts come with a highly visible ROI. However, what may seem like an easy financial decision may come with long-term repercussions. Even though maintaining a strong marketing presence may not be as “urgent” as addressing other business areas, it is vitally important to fuel sustainable growth.
B2B brands must define and prioritize the marketing goals that matter most to their audience, and then optimize their marketing mix to reach their prospects at the right time, through the right channels, with the right messaging. At the same time, companies have to give due attention to all stages of the sales funnel in order to prevent costly bottlenecks in their pipeline (e.g., prospects aren’t transitioning from one funnel stage to the next on a consistent basis).
Upper-funnel marketing may not seem like it needs to be a top priority, but don’t underestimate the impact it can have on your strategy’s overall effectiveness. In fact, a Nielsen study found that the correlation between upper-funnel brand metrics and marketing efficiency was “significantly strong” (0.73). In other words, upper-funnel content, paired with video and offline media, is very efficient at driving not only long-term, but also short-term sales. (Of course, lower-funnel messaging, non-video content, and online media are key in generating short-term sales as well.)
The bottom line? A robust, balanced marketing mix contributes to both immediate results and long-term growth. For that reason, consider pre-pandemic budget levels for marketing as a key objective — and all the more so since competitors may still be operating on a reduced marketing budget.
The B2B Landscape Continues to Thrive
Another factor to keep in mind is the resilience of the B2B market in general. Stepping up your B2B marketing game in 2021 isn’t a matter of trying to convince drowning companies to spend their last dollar on your product or service. On the contrary, the B2B landscape is experiencing its third consecutive quarter of growth, with American businesses alone were projected to spend an additional $140 billion in Q2 of 2021.
As more and more organizations begin to emerge from the shadow of COVID-19, competitive positioning is going to become an urgent priority. Marketing and advertising will become more important than ever as consumer spending continues to rise to pre-pandemic levels. Increasing brand awareness now to gain a significant edge over the competition — and rejuvenating your marketing efforts — to take advantage of this opportunity.
U.S. Companies Will Spend More and More on Advertising
By the end of 2021, American companies will almost certainly have spent more on advertising than they did in 2020 — up to 15% more, according to one study. In fact, business intelligence expert Brian Wieser says that “the current rate of ad-spending growth is likely to be the fastest in the postwar era.”
As ad spend increases, businesses will direct the largest allocation of their marketing resources toward digital channels. There are a number of reasons why CMOs and their marketing teams prefer to keep digital marketing in first place:
- Higher ROI. Digital marketing channels offer unsurpassed ROI in terms of cost and reach. For example, research has indicated that Google Ads may yield as much as $2 in return for every $1 spent. That’s not to mention the cumulative effect that organic SEO-driven content, social media marketing, and other forms of advertising can have on brand awareness and customer engagement.
- Expanded reach. Many marketers are shifting money toward digital ads because consumers are spending more of their time on digital media (Internet browsing, social media platforms, etc.) than more traditional mediums, like cable TV.
- Greater flexibility. A strong digital marketing strategy allows for scalability both up and down, and enables marketers to quickly pivot their messaging and delivery methods according to current needs.
U.S. businesses are working to return their marketing budgets to pre-pandemic levels as soon as possible. Setting this goal for your organization, and then implementing a plan of action to reach the goal, will likely pay significant dividends as individual consumers and businesses alike return to pre-COVID levels of spending.
How Nichols Brand Stories Can Help
There are many compelling reasons to invest in your marketing mix right now, even if your sales have been trending upwards since the end of 2020. If you take decisive action now, you will likely gain a strong competitive position in the market, boost your short-term sales, and set up your company for long-term success.
Our team of marketing experts at Nichols Brand Stories can help you to achieve those goals. We will work with you to develop a logical, coherent, and scalable marketing strategy that will take your company to the next level as markets progressively return to some sense of normalcy over the coming year. We’ll also help you to identify and focus on the top marketing goals that will “move the needle” in terms of customer engagement, lead generation, and sales. Reach out to us today to learn more.