Your competitors may be unwittingly cutting off their noses to spite their face.
The latest Gartner CMO survey reports that marketing budgets have fallen 15% YoY. Why? The adoption of AI and macroeconomic uncertainty. There are over 60 countries entering elections in 2024. Turbulence is an understatement. These factors are making long-term investments hard to justify. As a result, spending is falling and what remains is often focused on short-term demand generation only.
Many of your competitors will be falling into a trap of cutting costs, and cutting off their noses as a result. And this gives you an opportunity.
B2B marketers targeting a niche don’t have much to cut in the first place
Marketers are reputed to spend 8.4% of total revenue on marketing. However, when you target a niche, this isn’t true. It is more likely to be 0.84%.
A 15% drop on a low base doesn’t leave much to play with. Good marketing needs insight, creativity and strategy. They all need a minimum level of investment as they amplify the effectiveness of your marketing. When competitors cut back on them, you’ll outperform them significantly if you don’t.
MarTech costs are out of sync
The report shows that spending is divided equally into:
- Agencies/services (22.9%
- Paid media (24.4%)
- Staff (24.3%)
- MarTech (25.1%)
The minimum fees for many MarTech platforms are inappropriate for those targeting small audiences. Picking the wrong platforms sucks your budget dry. Need to cut budget? Start by reviewing the effectiveness of your stack as there will be opportunities to remove part of it which is underperforming, or not providing enough value. IP look-up services are a good example. They should live or die based on their accuracy for your micro-audiences. These services vary massively in quality
Paid media spend is up but in the wrong place for many. Brand is vital.
Demand generation activity should be balanced with brand building, but the report shows an imbalance. Brand activity is at 28.6% which, although up by 1% YoY, it is a long way away from the proven logic by the LinkedIn B2B Institute that shows the importance of a 46%:54% split (brand: sales activation).
Brand building leads to longer-term success. Why? It builds brand preference and reduces price sensitivity. It is the main driver of long-term growth and profit.
Expand your share of voice
As others around you reduce their activity, keep yours higher or consistent. This is the moment to buck the trend and lift your share of voice. It will lead to brand preference, which leads to future sales. The LinkedIn B2B institute proved the link.
Those competitors who cut back on brand are leaving you an open goal to get a higher share of voice and build brand preference. Competitors who cut too much today, will suffer tomorrow.
723 impressions and 54 touch points. There is a minimum amount of activity.
Buyers are conducting self-service research in larger buying units. Often, they have their preferences based on reputation and select from their initial three choices. There is more democratic decision-making and a reluctance to take responsibility for a large decision.
The result? The number of touch points needed to drive an opportunity is more than you expect. HockeyStack shows that the exact figures vary based on deal size but show a minimum too which is higher than you think. The trend is clear: cutting activity beneath this will cut effectiveness. There is a minimum amount of activity needed. Many of your competitors will drop under this threshold without realising.
Events are back, but they need to be done properly.
Good event marketing is a real skill that needs creativity before, during and after campaigns. Making up 17.1% of off-line budgets, they’re really important. Judging by our recent analysis of several niche events, many companies are still rocking up with a roller banner, some free pens, and a big smile then crossing their fingers and hoping for the best. For many, the event is the great hope for lead generation. Sadly, it won’t work like this.
Remember, most buyers have built their shortlist before they attend – and, before they speak to you. An event needs to be an experience so you connect with people, often on a personal level – it is not just for handing out pens. Give it more thought and knock it out of the park. Use those pens to build a better plan.
Spend with agencies is falling
Yes, I am biased, but the report shows spending with agencies falling by 7.3%. With AI and increased in-house skills, a lot of production work is being done in-house, so some of this is understandable. And, to be honest, it is encouraged by agencies like ours.
However, strong, original creative and considered strategy based on solid insight drives better impact. Why would you not want to surround your team with experience, to do this as well as you can? It amplifies performance. I’d recommend that any cuts to agency budgets are considered carefully and are only in the right place.
If you’re under pressure for results and to cut costs, work with your agency principles to find a way forward. They’ll have ideas such as different approaches. They’re running businesses too.
The Gartner report suggests many of your competitors are making the wrong choices giving you an opportunity. Make the right choices, right now, and you’ll cut off competitors.
