Despite COVID-19, marketing transformation plans continued and even accelerated

In 2020, as the COVID-19 pandemic ravaged the economy, the majority of companies held steady when it came to their marketing transformation plans.

In Altimeter’s “2020 State of Digital Marketing” we asked digital marketers in the US, Europe and China to tell us how COVID-19 had impacted their marketing transformation plans.

The majority of companies (30%) are continuing their transformation plans for marketing, unaffected by the COVID-19 pandemic, with 22% even accelerating their transformation programs.

When the pandemic first hit at the beginning of the year, almost every company cut back on spending and prepared for the worst. However, by mid-year, most businesses had decided that spending on transforming marketing was more than a way to keep up with innovation, it was a survival tactic.

In a world where customers are now using digital channels to interact with businesses more than they ever have, sub-par digital experiences are a real threat to revenue. In addition, B2B sales teams, who were used to engaging with customers in person suddenly have to rely on digital marketing and virtual events to help them close the deals.

Essentially, COVID-19 is exposing the digital marketing maturity gaps in companies, and evolving their technologies and practices is their direct response to coping with the impact of the pandemic. It makes sense to accelerate the development of key practices, such as optimized web, mobile and e-commerce channels, personalized digital outreach, and virtual selling which are crucial in the pandemic caused absence of physical stores, or in-person selling.

Thus, companies who had invested in delivering great digital/virtual experiences can feel vindicated in the time of COVID, while others will scramble to jump start and accelerate their own plans.

However, just over a quarter of companies were continuing their marketing transformation, but with decreased investment due to the pandemic, implying that they now have to do more, with less resources. Our survey further illustrated this in another stat, which found that digital marketing spending had become polarized in the time of COVID. 

In 2019, we saw a normal distribution curve for digital marketing spending, with the majority of companies spending between 30 and 50 percent of marketing resources on digital.

However, in 2020, the curve has flattened in the middle and pushed out to opposite ends. The proportion of marketers who spend between 11 and 30 percent of the total marketing budget on digital has increased. So has the proportion of marketers who spend 60 to 90 percent of the marketing budget on digital.

This highlights how companies have responded to the COVID-19 pandemic, with some decreasing spending on digital, most likely as part of an overall reduction in spending to keep costs down. Other companies have stepped up their spending on digital, perhaps recognizing the need to accelerate their digital investments to reach customers who are even more likely to engage online than in-person.