With 2014 right around the corner, marketers are actively working to develop budgets that bring multiple business elements together in harmony. Yet, as channels continue to expand, companies find it increasingly difficult to allocate spend in a manner that leverages emerging technologies and supports traditional media simultaneously.
According to Forrester's "B2C Marketers Must Turn Fragmented Marketing Budgets Into Business Budgets" report, marketers must develop budgets that balance programs with infrastructure in order to deliver efficient ROI. The study, which polled 52 senior marketers, highlights that today's marketing budgets must include allocations for projects that enable the overall business to operate more effectively, with special attention paid to improved marketing technologies and analytical tools.
The following statistics demonstrate the average marketer's plans for 2014 and how these updated budgets will impact operations across numerous disciplines:
- While 41 percent of marketing leaders expect to see an increased budget in 2014, 20 percent predict that their budgets will decrease. Thirty-seven percent anticipate no change.
- Seventy-seven percent of respondents met or exceeded revenue goals in the previous year. Yet, while 40 percent of consumer-focused companies spent 5 percent or less of revenue on marketing during the last fiscal year, more than one-third invested 10 percent or more.
- Traditional advertising methods, such as TV, print, and radio, will continue to occupy the biggest portion of the marketing budget pie (20 percent) in 2014, with direct marketing following close behind (15 percent). However, 73 percent of marketers agree that their budgets continue to fragment across varying media channels. For instance, 52 percent of marketers plan to increase their digital advertising spend in the coming year.
- On average, IT accounts for two percent of marketing budgets despite the increased demand for technology. Only one in 10 marketers plan to increase spend in this department in 2014.
- If respondents were given an additional 5 percent on top of their marketing budgets, 46 percent would invest in testing new marketing innovation, 46 percent in digital advertising and marketing, and 29 percent in market research and consumer insights.
- Social media will secure 20 percent of the average digital marketing budget, though 63 percent of respondents would like to invest more money in this channel. Mobile, however, will become the fastest-growing digital category, with 12 percent of digital marketing budgets.
- When pinpointing the three biggest challenges in setting their marketing budgets, 62 percent of marketers agree that securing incremental spend for experimentation and innovation remains their primary obstacle, followed by connecting marketing goals with business objectives to justify spend (54 percent) and allocating spend across different channels (48 percent).
Key takeaway: As the CMO's role grows to encompass everything from IT to analytics, marketing investments must also begin to reflect this evolution. Thirty percent of marketers, for instance, devote only 3 to 5 percent of their overall marketing budgets to experimentation and innovation-two elements essential for growth and development. In the coming year, marketing teams must look to such spend as an investment in the company's future for, as Forrester highlights, marketing innovation cannot be sustained without funding to execute. CMOs will also need to accept that, if they are to integrate new technologies, they must be willing to allocate funding to IT, as that department's budgets are frequently overloaded and understaffed. Only then will marketers be able to invest in the tools and strategies necessary for continued success and customer engagement.