The Impact of COVID-19 on B2B Marketing Budget
Every year some or the other company does a report on B2B marketing budgets and investment trends, however, with the pandemic, as the world around us has changed, all those trends and historical data have become completely irrelevant.
I recently came across a report on “State of Spend” – an analysis of B2B marketing investment in this new normal with data from several enterprise marketing teams. This marketing investment benchmark report has been put together by Allocadia based on actual data on how their B2B clients have been investing their marketing budgets in this current market scenario. Here are some interesting facts from the report –
An Overall Cut in Marketing Budget
56% of the companies surveyed lost more than 10% of their over marketing budget.
15% lost more than 30% of their program spend
Events – The Biggest Loser
Not really a surprise here.
Event spend plummeted by 46% from Q1 to Q2 of 2020.
There’s an 85% correlation between decreases in event spend and decreases in overall marketing spend, meaning every time a marketing team saw a cut in the overall budget, chances are that the event budget took the largest cut.
However, when looking at the forecasted spends, it seems marketers have not given up on events completely.
From Q2 to Q3 there is a 24% increase in forecasted event spend.
This could be because we are hopeful of things getting normal or marketers are doubling down on virtual and hybrid events, webinars etc. (If you are looking for a good webinar platform, check out Demio, a really user-friendly and value for money webinar platform with advanced features)
Digital Advertising Sees the Upside
As events spend decreased, digital programs and advertising saw a clear increase in spending.
28% of the companies had a more than 30% increase in ad spend Q1 Vs Q2.
There’s also a huge increase in forecasted ad spend for all sizes of companies from Q2 to Q3. Quiet possible that companies used Q2 to test new channels and advertising programs and use Q3 to scale the ones that perform.
Want to find out how your competitors are spending on ads? Try this!
Demand Gen Programs Get More Budget Compared to Brand Campaigns
During a pandemic situation it is normal to think that brands will spend more money on awareness so that when the market is ready to buy, they have a strong brand recall with the buyers. However, in reality, brands cut down on their awareness spend and PR initiatives while increasing spend and focus on demand gen activities.
Demand Programs Increase More than 20% while Awareness Programs Drop
Overall, direct marketing increased from Q1 to Q2 by 23%
This clearly indicates that brands are renewing their focus on expanded email nurture programs, telemarketing initiatives, ABM efforts, and other demand gen programs.
Content Marketing Programs See an Increase in Spend
As marketers, particularly B2B brands continue to spend more on their demand gen programs, content marketing gets a shot in the arm.
Overall there was a 12% increase in content marketing spend from Q1 to Q2, with a further 8% increase forecasted for Q3
39% of companies had more than a 20% increase in their content marketing spend.
The growth in content marketing can probably be directly attributed to the growth in demand programs and digital advertising.
This year is indeed different and while these numbers are interesting I don’t think these can serve as a benchmark for the post-COVID world. Some of these trends will likely continue while others will turn on their head as the situation gets back to normal. If you are interested in more details, you can download and read the full report on Allocadia’s website.
Allocadia provides best-in-class money management capabilities for marketers and gives them the confidence to know where to invest their next dollar. Its award-winning marketing performance management platform enables marketers to plan strategically, invest with purpose, measure the performance of their activities, and ultimately maximize marketing’s impact on the business.