Analyzing Marketers' Budget Allocation in 2023: Insights from a Survey of 8,032 Professionals

Analyzing Marketers' Budget Allocation in 2023: Insights from a Survey of 8,032 Professionals;

Given the uncertain economic landscape characterized by inflation, rising interest rates, geopolitical tensions, and other uncontrollable factors, understanding how marketers are adapting their strategies becomes crucial. Our curiosity extended beyond the United States, prompting us to investigate global trends across industries, catering to businesses of all sizes in both B2B and B2C realms.

At our ad agency, we capitalized on our website traffic to conduct a comprehensive survey, aiming to uncover the actions taken by fellow marketers and gain insights into the underlying reasoning.

Here's what our research revealed:

Earned Media: An In-depth Look at Budget Reallocations

SEO:

- 68% of companies indicated an increase in their SEO budget, citing its superior return on investment (ROI) compared to paid advertising. The delayed gratification associated with SEO implementation was acknowledged.

- 11% opted to maintain their current SEO budget due to limited flexibility resulting from economic constraints.

- 21% of companies reported a decrease in SEO budget, citing either unsatisfactory results or budget cuts necessitated by their overall marketing spend.

Organic Social Media:

- 32% of companies expressed plans to boost their organic social media budget, primarily driven by the limitations imposed by Apple's iOS changes, hindering investment in paid social media.

- 26% decided to maintain their current budget, recognizing the necessity of a presence on major platforms to engage with existing and potential customers.

- A significant 42% decided to decrease their organic social media spend, citing declining organic reach and diminishing ROI.

Content:

- An impressive 83% of companies intended to increase their content production budget, attributing this decision to the demand for diverse content formats, including video, and the associated costs.

- 8% aimed to maintain their current content budget, acknowledging economic constraints limiting their capacity for increased expenditure.

- 9% planned to reduce their content creation budget, citing the availability of affordable AI tools for content generation.

AI Tools:

- Notably, 98% of respondents expressed a willingness to invest in AI tools in 2023. Their motivation revolved around three key factors:

?- Enhanced advertising capabilities using AI-powered platforms

?- Streamlined content creation, resulting in reduced time investment and costs

?- Potential workforce downsizing within the content department

Email Marketing:

- 56% of companies anticipated an increase in their email marketing budget, driven by growing email lists and associated costs, compliance with privacy regulations, and investments in marketing automation.

- 38% planned to maintain their email marketing efforts, recognizing its importance for customer communication.

- 6% intended to decrease their email marketing budget, driven by either pruning inactive subscribers to reduce expenses or transitioning to more cost-effective email marketing software providers.

UX/Conversion Rate Optimization (CRO):

- 61% of companies intended to increase their overall UX/CRO budget, acknowledging its role in delivering a higher ROI amid rising ad costs.

- 26% aimed to maintain their UX/CRO budget, driven by similar considerations as those choosing to increase spending.

- 13% planned a budget decrease due to economic factors.

Podcasting:

- Podcasting emerged as an untapped marketing channel, with 92% of companies planning to increase their podcasting budget. The main motivation was the intention to create their own podcasts.

- 5% opted to maintain their current podcasting budget, highlighting the need to explore revenue-generating opportunities before scaling further.

- 3% planned to decrease their podcasting budget due to economic constraints.

Community-Building:

- A significant 84% of companies intended to increase their spend on community-building. This inclination stemmed from a desire to exert greater control over their destiny, reducing dependence on algorithms.

- 12% of companies planned to maintain their community-building budget, expressing the importance of budgetary increases but citing economic limitations.

- 4% expected a decrease in their community-building budget due to economic factors.

Paid Ads: Focus on Key Channels

Search Ads:

- Search ads witnessed budget increases among 59% and 47% of companies for Google Ads and Bing Ads, respectively. The primary driver was their clear return on investment (ROI) compared to other marketing channels.

- 18% of companies planned to maintain their search ad budget, highlighting challenges in scaling while maintaining profitability.

- Decreases in search ad spend (23% for Google and 34% for Bing) were primarily due to cheaper average cost per click or reduced search volume for targeted keywords.

Social Ads:

- Facebook, Instagram, and Snapchat exhibited varied responses, but the common thread was the impact of Apple's iOS privacy changes. Return on investment (ROI) on social ads suffered, prompting marketers to maintain or decrease spend.

- YouTube and Pinterest witnessed increases in ad budgets for 28% and 35% of companies, respectively. The main driver was profitable campaigns that warranted scaling.

- Maintaining ad spend on YouTube and Pinterest (33% and 29%, respectively) resulted from profitability concerns and the inability to scale profitably.

- TikTok garnered considerable attention, with 84% of companies planning to increase ad spend, recognizing its untapped potential.

- LinkedIn, popular among B2B companies, saw 57% planning to increase their ad budget due to its efficacy in reaching their ideal customers.

- Twitter displayed polarizing results, with 28% intending to increase ad spend and 34% planning to decrease or halt their campaigns due to their views on platform management and recent changes.

Other Online Ad Buys:

- Podcast ads witnessed a surge, with 78% of companies planning to increase their ad spend. The primary reason was promoting their own podcasts for increased popularity.

- Banner ads attracted budget increases from 34% of companies, driven by profitability and scaling potential.

- Remarketing spend experienced significant growth, with 94% of companies increasing their ad budget due to its profitability.

- OTT/CTV ad spend increased for 52% of companies, driven by enhanced transparency and trackability compared to traditional TV ads.

- Influencer marketing witnessed increases in spend for 41% of eCommerce companies, citing its superior ROI compared to other channels.

- Traditional ad spends faced reductions across various channels due to challenges tracking ROI, budget constraints, and a shift towards performance marketing for better results.

Overall Marketing Budget:

- Surprisingly, despite concerns about the economy, more companies reported an increase or maintenance of their marketing budgets in both B2B and B2C sectors compared to those decreasing spend.

- For B2C companies, 26% planned to increase their budget, 51% aimed to maintain current levels, and 23% decided to decrease spend, citing profitability and overall effectiveness as main drivers.

- B2B companies, benefiting from recurring revenue and greater predictability, witnessed 34% planning to increase budgets, 45% maintaining current levels, and 21% reducing spend due to economic influences.

In conclusion, although marketers expressed concerns about the economy, a significant majority opted to increase or maintain their marketing budgets. Earned media, especially SEO and content, witnessed substantial investment. AI tools garnered widespread interest. Paid ads displayed varying trends across different channels, with social ads facing challenges due to privacy changes. Traditional ad spends faced reductions, redirecting budgets towards performance marketing. Ultimately, marketers' actions must align with their specific goals and circumstances in 2023.