Why are marketing budgets the first to be cut… and the last to be restored?

Image of various things that lead to marketing attribution

[ad_1]

Doing more with less is a common theme for modern marketing organizations. And the numbers back it up. According to our most recent State of Email report, 60% of marketing executives said they planned to send more email. But in that same report, more than 40% of marketers also said they were under-resourced when it came to email. Our organizations want us to drive the business forward by amplifying brand awareness, leading business strategy, attracting new customers, creating customers for life, and delivering up-and-to-the-right pipeline and revenue charts that delight our stakeholders. To carry this load, it’s logical to expect that our marketing budgets would be as hefty as our responsibilities.

Oh, to dream big.

The current state of marketing budgets and what to do

A recent Gartner survey illustrates the current state of play, finding that marketing budgets as a percentage of revenue have fallen from 11% in 2020 to 6.4% in 2021, their lowest level in the history of Gartner’s CMO Spend Survey.

When the global business landscape shifts to unfavorable economic trends, marketing budgets are the first to be cut and the last to be restored. As modern marketers, we’re hard-wired to solve problems, and we quickly adapt to changing conditions by curbing spending on in-person events, external agencies, and awareness advertising. While these tactics might address near-term business challenges, they create a wealth of long-term risks that threaten brand awareness, new customer acquisition, new product development, customer loyalty, and pipeline & revenue growth—the exact business mandates we have been entrusted to deliver for our organizations.

At this difficult juncture, marketers need to build a rock-solid business case that clearly demonstrates how marketing investments drive positive business outcomes and deliver long-term business value.

If you are juggling sky-high revenue goals with smaller budgets this year, here are steps you can take to bolster your business case and replenish your marketing coffers.

Get a Customer Data Platform (CDP) and collect first-party data

Managing prospect and customer data is a challenge in every organization. The bigger and more mature the organization, the higher likelihood that it exists in multiple silos, is incomplete, has duplicates, and doesn’t connect with all core systems of record, making it nearly impossible to measure marketing’s impact across channels and deliver actionable insights. If these attributes sound familiar, you are not alone. A recent study from the Demand Gen Report and Terminus found that 46% of marketers said that their data is a mess and 51% said they were unable to connect and analyze data across applications and platforms.

That’s why so many marketing organizations are deploying CDPs to create a unified view of customers and prospects, generate segments and insights, and make those available to other people and systems. It starts with integration, bringing together all the information that exists about individuals and accounts. It connects to first-party data—this means sources like your customer relationship management (CRM) software, marketing automation, email service providers, and more. It also integrates third-party data. This typically includes web visits, ad impressions, firmographic and demographic data, etc. All of this gives a single view of the account and the associated people tied to it. This type of information is marketing gold, which brings me to my next point.

Put a marketing attribution model to work

Determining which parts of your marketing efforts drive conversions and sales can be one of the messiest areas of marketing. But it’s also one of the most important to help you increase your return on investment (ROI), revenue, brand awareness, conversions, campaign success, and build your business case.

This is where marketing attribution comes into play. It tells you which marketing tactics and touchpoints are leading to conversions, engagement, pipeline, sales, and movement through the buyer’s journey.

While there are many flavors of attribution models, here are some common examples:

  • First-Touch Model: A first-touch model assigns all of the credit to the first webpage or digital asset that led a customer to your site. This model is great for understanding what brings people to your door.
  • Last-Touch Model: Last-touch attribution is the inverse of first-touch. It gives 100% of the credit to the last thing a customer sees before making a purchase. This model is great for evaluating bottom-of-the-funnel content like CTAs and landing pages, but it’s not much help at the start or in the middle.
  • Full-Path Model: A full-path model gives weighted credit to every touchpoint in the customer journey to provide a comprehensive, omnichannel view of engagement and conversion.

Bring it all together to model your marketing mix

Of course, all marketers know that information alone and tracking pixels (including those 3P cookies that are going away in 2023) won’t get you anywhere. You have to be able to turn your analytics and insights into something actionable for it to be valuable. With a CDP and attribution in your toolbox, you can tap into new segments and audiences, create profiles of high-fit accounts in your ideal customer profiles, engage accounts that are showing high intent, and so much more.

At Litmus, we leverage our customer data and multi-touch attribution model to forecast pipeline from marketing programs. To build this forecast model, we analyzed historical yield from all of our marketing channels and conducted a regression analysis to create a baseline. Each quarter, we compare our forecast to the actuals and optimize the model, making it more accurate over time. The pipeline forecast model enables us to analyze our current marketing mix and determine if we need to make changes to hit our quarterly pipeline goals. Additionally, it’s become an invaluable tool in building business cases to increase marketing investments in programs and technologies. I can’t imagine managing a modern marketing organization without it.

Where does that leave us?

In a do-more-with-less world, you should steel yourself for more bumps in the road and some trying times ahead, especially when it comes to your marketing budget. This, at least, will be familiar terrain. Fortunately, there are things you can do now to get more from your existing technology investments, understand more about customers, and build better marketing programs that deliver higher ROI and positive business outcomes. In doing so, you can build a compelling business case for the budget and resources you need to take your business to the next level.

[ad_2]

Source link

Leave a Comment

Your email address will not be published. Required fields are marked *

Integrately - Integration platform
Share This