Marketing Outlook 2024

Why you will see a steep rise in marketing budget in 2024 and 2025, primarily ad spends?

According to 2023 survey, global ad spend was $680bn, out of which North America spend was $364bn, EMEA spends were $113.5bn, APAC spend was $197bn and MENA spend was $5.5bn with some overlaps.

2024 kicked in with incredible World Economic Forum Summit in Davos. From #AI to #human capital, from #equity to cashflow, from #ESG policies to #technology infrastructure, from #leadership in digital ecosystem to security concerns, and #war, everything that could affect macroeconomics as well as microeconomics was on the table.

One thing that stood out in all conversations combined was the fact that consumer market will be more challenging than before with people's lives being heavily dependent on AI but at the same time increase in digital fatigue. Thus, companies and government agencies in 2024 would need to find a new paradigm to support economic growth transformation.

Why is this literature important for us marketeers? Well, that is because all of this has a direct or indirect impact on marketing practices and budget to make our products and services in 2024, as well as 2025 stand out.

Digital is marketing's staple and no matter how I say this, it will only grow more and more. More brands, more dynamic user base, more changing priorities, less retention, more need to be infront 24X7. This is exactly why there is so much competition.

It's become tougher to come infront of target audience and influence them. Not only would a marketeer need to be more creative this year in terms of methods and platforms they will use to sell, but also would need higher digital marketing spend to supplement the effort.

I happen to observe that CEOs and CFOs are reluctant to put money into marketing because the business has been slow from past years. And, it's hard to justify the cost. But if you or your companies vision is to accelerate and cover losses, or may be to convert leads from last year, then instead of pulling plug on budget, CMOs, CEOs, CFOs - every leader need to be on same page and go all in.

Let's throw some statistics!

*I am only going to talk about ad spends because total digital marketing spend is projected to 1.8tr with multi-channel engine and increase in #partner marketing.

According to this Forbes article (that carries information from various marketing giants and think tanks), we will see YoY increase of ad spend in between 4.6% to 7.2%.

Through recent conversations with marketing and sales leaders from big, mid-size and startup organisations, the conclusion drawn is that this number doesn't show the full picture. The maturity and variety of existing marketing programs plays a huge role in the YoY ad spend % and may lead upto 57.4% increase. Simply put, if your optimal bidding in Google remarketing ad was $100 in 2023, expect it to go upto $125-$159.

A side note: 2024 will be the year of performance max ads. The earlier you start, the quicker you will gain advantage.

When cost is concerned, we all want to remain nimble. But no matter how much we want to escape the truth, the reality will remain the same. The brands, organisations and leaders who will accept it quicker will be able to create a competitive advantage. Others, may end up grappling for results throughout the year.

A technology startup founder from silicon valley spoke very candidly. He said, "Last two years, we were moving slowly and wanted to go organic due to fund shortage. But I understood it hard way, I may survive and be able to create stuff with my coders working overtime but I won't be able beat market if I don't put money. It's all a dog & pony show. If I am not part of it, then as a result my product will stand alone with nobody looking." [Anonymous]

I was moved by a wonderful post put by Kathleen Booth , SVP, Pavilion. She spoke on the lines of CMOs' struggle to prove ROI in marketing and ways to justify every dollar spent. This completely resonates with the fact that when it comes to marketing budget, the stiff competition on digital ecosystem makes it difficult to explain and bring other stakeholders on same page due to departmental priorities.

Going back to the core of this outlook article, marketing and product/service priorities need to be rehashed, with emphasis on spend metrics.

2024 Marketing Budget Vision

By Organization Size

Founders and investors would have to understand & accept the fact that every startup funded in next two years would face stiff competition. No matter how much the inside network will help, they no longer can let go of paid side of marketing.

So whether you are in Pre-seed,1st round or consecutive investment rounds : Ask for investment with a clear division of 60::40, with 40% markup for marketing, instead of traditional 20-25%. Also, remember it's not just %, but the actual numbers.

*Courtesy: BlackRock , Moody's Corporation , vangaurd , 摩根大通 , 摩根士丹利 , Allianz , Mirae Asset Global Investments , 三井住友银行 , and others.

I have always felt it's a bit tricky for mid-size organization. While startups revenue goals are comparatively small and have investments for a 2-3 years runway (unless you are bootstrapped), big firms have good cash flow to back up their marketing programs. For mid-size organization, its a double whammy! They need to accelerate faster to fulfil revenue goals but at the same time they need to invest in better branding to create market trust.

Having said that, it's a good news. All it means is that the leaders in mid-size organizations need to break away from traditional structure of investment and need to emphasis on things like partner marketing, better content syndication, display ads. Along with it also empower sales and pre-sales team with new tool and tech.

If you are a CMO or Growth Leader in mid-size organization, ask for a 25% higher budget and put majority of it in new tech. "Proactively Creative" will be your saving grace.

Considering Large-cap organizations like 谷歌 , Meta , 甲骨文 , 凯捷咨询 , Big 4s: 安永 , 德勤 , 普华永道 , KPMG , 苹果 , 三星电子 , 赛默飞世尔科技 , 亚马逊 . And, similar companies on both B2B side as well as B2C side.

The rigid digital competition is a direct result of the excessive spent done by large corporations. It's time to direct marketing programs more towards quality than quantity. While partner marketing with new, small and mid firms would be fruitful, what will increase ROI is up-skilling employees to cover the gaps. Whether that gap is lack of personal network, languages, executive presence or creative solution building for current trends, thats where the marketing budget alignment would create desired results.

A bare minimum markup of 5%-7.5% should be enough to run programs smoothly and in most streamlined manner.

Pertinent questions marketing leaders must ask to gain leverage.

1. Does my company's vision match with market trends?
2. Does my current program/s correspond to the change in consumer behavior?
3. Do I have enough budget to run marketing programs through various channels, across all geographies?
4. Are leaders from other department living in a bubble or are they aware of macro or micro level changes coming from economic lowdown of last years?
5. Do I have right technology that can help me aggregate data and justifies ROI in a better way?

I leave you with these questions. These will help you to have conversations with your teams and stakeholders. Remember, bridging gap is the first step towards asking for budget.

Conclusion

Why you will see a steep rise in marketing budget in 2024 and 2025, primarily ad spends?

Because with a higher number of brands being present on digital ecosystem and micro-influencers blossoming, it is difficult to cut through the noise. Therefore, the increase in budget is to beat the competition. At the end of the day, every one is fighting for the same space!