How much does marketing cost in 2020?
2020 has proven to be quite a tough year for many companies both B2B and B2C with the rise of the COVID19 pandemic.
As the economy slowly starts to reopen where possible, brands needs to think hard about what their marketing plan looks like for the rest of 2020 with a focus on proper budgeting and making sure their brand is positioned well for a fall/holiday peak season of consumer spending.
There is no simple answer for how much your company should spend on marketing in 2020. Hopefully your business tracks as best you can how you have landed customers over the years with data showing how many are inbound, how many your sales team landed etc, which then makes giving estimates as to how many were acquired through other advertising activities easier.
Unless your company is in a truly dire financial situation with the ongoing pandemic, the worst single thing your company can possibly do is to stop advertising during this time period. Your competitors aren’t stopping and neither should you. Many firms are hoping their competitors drastically pull ad spending as it will give them an opportunity for a land grab of their competitors’ clients and customers.
Maintaining marketing and brand communications by leveraging social media is one of the absolute most important objectives your company should have throughout the rest of the year.
For small businesses, particularly those that sell to consumers, MAKE SURE to provide your customers weekly communications on upcoming offers and special deals. Also communicate clearly the steps you’re taking to provide a safe environment for customers and employees. You’d be surprised how much this will make a difference to your business. Brands that can effectively maintain marketing throughout the pandemic will reap rewards as it finally starts to diminish sometime in the coming months.
BROAD BUGET PLANNING
The SBA recommends for most firms to spend around 8% of company gross revenue on marketing and advertising. This is an average across all industries and business verticals and can vary dramatically depending on what industry you are in and how customers are typically reached in that industry.
This number has risen from 6% a few years ago, meaning that companies are finding the need to spend more of what they make on marketing than before. As an average, B2C spending will be higher than this and B2B marketing spending will be lower. This is simply a reflection of the industries and how B2B sales cycles are typically much longer, involve more planning and sales processes.
Keep in mind the more competitive your industry is, the more you might have to spend to differentiate your marketing from competitors.
USE DATA
It’s too easy to become focused on the granular details of marketing and advertising while loosing the larger picture of budget planning and data analytics. Nearly every company should be using some kind of CRM program that tracks where customers came from. That will make a big difference in your ability to track ROI on advertising campaigns. Without knowing where a customer came from, you won’t know where to focus your ad spend.
Make sure you are effectively using data from google analytics, your email marketing software to track email opens, a/b testing for digital ads, email marketing, and social media data to better plan what content works and where best generates engagement with your audience. This can be a learning experience with any brand but is important to not waste money on marketing to a audience that doesn’t exist or isn’t receptive to a type of marketing content or a specific product or service.
MOBILE WEBSITES, DIGITAL AND SOCIAL MEDIA
Mobile website traffic is now about 50% of overall traffic, sometimes more depending on the industry or social media platform. Your website is not serving you well if it is not optimized for digital viewing. This will be a major turn off to would be customers that google you on their mobile device. Make sure as much content as possible looks great on mobile.
Digital advertising is becoming as prominent as traditional media types such as TV and radio. Social media, ppc, seo blogging, facebook ads, instagram posting, etc all play a major part in how consumers find brands now. Make sure you are working with an advertising agency that can help get you on the right track with these outlets. Digital should be an increasingly large percentage of your overall budget.
Paid social media content is now virtually required for your brand to stay competitive. This is a frustrating move from social media platforms that want to increase their revenues, but it is a fact of life. Using Facebook’s business manager to build campaigns is a strong way to target very specific demographics. Just make sure you know what demographic to target. Many times it is wise to start with a more broad campaign with A/B testing then narrow your targeting over time as campaign results can be analyzed. Promoting posts is also useful, but it is critical you already have an audience that follows your page for this to be effective.
For B2B companies, utilizing linkedin’s paid marketing tools can put you in front of the decision makers you need to reach in order to make a deal happen. Linkedin’s marketing costs are higher, but for high magnitude B2B companies it can still represent a significant ROI and profitable lead generation.
ADVERTISING IS NOT SET AND FORGET
Tweaking campaigns and marketing materials is needed to maximize ROI of any ad spending. You need to always be exploring new content, new types of offers, new types of social media posts etc and see what works. Many times what we think won’t work will somehow generate positive ROI. Also through the months the environment around your company changes, you can’t keep running the same deal, if all your competitors have followed your lead and now offer the same sale price etc.
Particularly for broadcast radio and television, keeping the ads fresh every month or every quarter at minimum is needed to retain engagement. You are fighting hard to gain the attention of viewers and listeners and if they sense they are hearing the same thing several months in a row, it is impressive how fast they will tune it out.
BROADCAST TV AND RADIO
These are not a fit for every company, but companies that correctly utilize broadcast tv commercials and radio ads see a strong ROI on their spend. The trick is carefully tailor the visuals and message in the marketing to generate action from potential customers. Don’t just advertise your brand, advertise an offer if you can that really is good. We’ve worked with all types of clients big and small, and without a doubt one of the highest marketing ROIs is properly utilized broadcast content. For B2B companies, this doesn’t generally make sense unless you are running your ads as a pure branding play or on niche networks, but for B2C television advertising is the quickest way to reach a large audience.
We’ve worked on projects where literally within a day of airing a campaign new business was generated directly from in person visits or phone call ins following the ad airing.
CONTENT COUNTS
Having great targeting and a solid media buy spend doesn’t help if the content itself is uninspiring. We’ve consistently seen over the year, that spending a little extra to make your video, web or social media content look great makes a big difference to overall performance.
If your tv ad looks extremely low budget and share a visual identity that is similar to your competitors, it likely won’t move your sales needle very far.
Incorporating video content into email campaigns, social media and websites has become a major strategy that is backed by strong data to support that viewers will stay more engaged with your content when videos are involved. Clickthrough rates for video content are a dramatic 2-3X higher than static content. While video content can cost a lot more than standard content, getting a 2-3x higher clickthrough rate across your digital ad spend makes this a good investment, as it allows you to get more out of your standard media buy budget.
Volan Media has worked with dozens of clients on hundreds of different campaigns, if you’re marketing plan needs work or if you aren’t seeing the ROI you expect from your advertising give us a call or send us a message. We always provide no obligation consultations and will take a deep dive on how to take your marketing to the next level. Our services include branding, marketing strategy, video/media production, website design and seo as well as non traditional advertising content such as trade show design and virtual reality. Our focus is always on driving profitable growth by generating action!
