Still coping with the aftermath of the recent recession, companies are reluctant to increase marketing budgets in 2014, according to a new report from Forrester Research. Of those surveyed, 45 percent reported plans to hold budgets flat, and only 32 percent said they would increase budgets for the upcoming year. Among the biggest roadblocks to bigger budgets, Forrester analyst and report author Laura Ramos says, is pressure to tie marketing goals directly to business objectives and revenue results.
"Following some of the economic challenges of recent years, companies have become more cautious about the way they're spending their budgets," Ramos says. "There's more scrutiny when it comes to how each marketing decision affects revenue and the business at large, so companies are being careful about moves to 'turn the faucet on' drastically. Marketing budgets are expected to increase by six percent on average, and I think this represents a very cautious optimism for the time being," she adds.
With only modest budget increases, marketers are still expected to do more with less; the role of the modern marketer continues to expand and many are tackling new responsibilities, such as data analytics. B2B marketers see the advantage of using data to drive deeper insight across the customer life cycle, according to Ramos, and 25 percent plan to increase spending from the 1 percent currently allocated to the task.
"What we'll be seeing is marketers using data to determine what makes a good customer, and relying on those attributes as a model for prospects. [In doing so,] marketing executives will be able to take that data intelligence higher up into the funnel and drive better results," Ramos says.
In addition to pinpointing a deeper focus on data analytics, the report also predicts that investments in new marketing technology will grow in 2014. Sixty-one percent of marketing executives expect the ratio of technology spend to marketing program spend to increase, according to the research. Despite an interest in new technology, however, many marketing executives are slow to innovate--most will only dedicate 3 percent of overall marketing budgets to experimentation, with approximately 25 percent setting aside nothing for innovation. "Marketers are very quick to embrace new tactics, but need to spend more time thinking about innovation on a deep level, and re-evaluating how buyers buy," Ramos explains.
Having written the report back in 2010 as well, Ramos reflects on some of the changes that have occurred since then, and says it's true that the more things change, the more they stay the same. Though marketers are prioritizing their budgets differently than they did back in 2010--there's a bigger focus on digital advertising, for example--the most significant chunk of a B2B marketer's budget is still allocated to in-person trade shows, conferences, seminars, and industry events. Though Ramos says the consistently high spend isn't necessarily surprising given the cost of participating in these types of events, she cautions marketing executives against approaching them in outdated ways.
"In-person conferences and events are among the most effective methods of B2B marketing, but companies need to ensure they're leveraging social media and other technologies to make the most of these opportunities," Ramos recommends. "Taking advantage of the digitalization and mobilization of the events can help companies get the biggest bang for their marketing buck," she says, and make long lasting business networking connections that can turn into leads.