As we move into 2021, data-based challenges are at the forefront of marketing decision makers’ minds.
Independent tech analyst, Benedict Evans, reiterated this fact in a recent trade interview when he said that “the pandemic has propelled companies to confront their digital future perhaps sooner than expected […] thrusting brands to fundamentally reconsider their route to business.”
The lessons learnt from this turbulent year will have a direct impact on budgeting plans for 2021. Therefore, Chapter 4 of our Marketing Budget Review will explore how businesses are preparing to make key marketing decisions to secure success in their futures.
The top-down effect
Within our research, 56% of marketers agreed that top tier management should be the ones to make marketing budgetary decisions.
Despite this, within Chapter 2, less than a third of senior management recognised the importance of greater investment to understand customer data, something that marketers had a strong understanding of.
In order to accelerate the digital transformation, it is therefore crucial that marketers are able to guide key budget decision-making processes for 2021.
To do so, marketers must employ technology tool kits which enable them to explore their customer data and report on the metrics that matter most to business growth.
Crucially, they must highlight how their marketing strategies are contributing towards securing greater customer loyalty.
From showers to thunderstorms: Saving for a rainy day
Marketers have more authority when it comes to deciding how the overall budget number is spent. Our research supports this, as 84% of marketers revealed they make the decisions on the allocations of spend.
2020 has had a clear impact on how marketers allocate their budgets, with 75% of businesses citing they have a “rainy day” fund in some form or another.
Importantly, this past year has also influenced how marketers plan to spend their future funds:
Spending of rainy day funds in 2021:
- 38% for additional marketing activity
- 26% for tech investment
- 25% for crisis
- 20% for team/HR
With a great deal of uncertainty underpinning 2021, it is no surprise that a quarter of businesses plan to use their rainy day funds to prepare themselves for future crises.
Importantly, in the UK, “marketing budgets were cut by their highest levels in the more than 20-year-history of the IPA Bellwether report, laying bare the impact the COVID-19 pandemic has had on the industry.”
Our own research supports this, as 74% of marketers said they had experienced a budget cut during the pandemic. It is therefore crucial that marketers set aside funds to deal with these challenges going forward.
Requesting more for success
In 2021, marketers need to allocate more budget to deal with specific marketing challenges. It is therefore positive to see that 77% of our marketers were able to request more budget during a cycle.
When asked what this would be spent on, marketers cited Marketing Technology within the top two areas for incremental budget investment.
In Chapter 3, marketers cited customer retention as the biggest anticipated challenge for 2021. Requesting additional budget for marketing technology will therefore be highly effective in helping them to address this challenge.
As mentioned in Chapter 2, investing in the right technology will grant marketers a better understanding of their customers and help to cultivate retention.
When it comes to budgeting, there is a clear top-down decision-making process in place. However, as we move into 2021, marketers will be expected to influence decisions by ensuring they can showcase the value of their budgetary investments in driving those important business KPI’s.
There is a strong understanding amongst marketers that investment in the right technology will be a vital allocation of future budgets, as this will ultimately help businesses to secure customer loyalty in the digital-first world.
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