2020 flipped most marketing teams’ plans upside down. Allocadia analyzed investment trends from their customer database to determine how marketers pivoted and thrived. Based on those insights, we recommend these four areas be considered when planning for a successful 2021:
- Take scenario plans seriously, so you’re prepared for anything.
- Digital advertising will continue to rule, and companies need to innovate and iterate to stand out from the noise.
- Brand awareness and demand generation are often perceived as being at odds with each other in times of financial difficulty, but teams shouldn’t take an “either/ or” approach.
- Don’t forget to pay attention to your current customer base while you pursue new opportunities.
It would be the understatement of the year to say 2020 didn’t turn out as expected for marketers. As we look toward 2021, most teams are trying to plan for success in a market landscape that they know will continue to shift.
My team analyzed how marketers invested their budgets in 2020, hoping to understand trends in how marketers were pivoting previous spend strategies to achieve success despite the obstacles.
Based on those insights, there are four areas marketers should focus on as they plan for organizational success in 2021: scenario planning, innovative advertising, customer marketing, and evaluating how to invest in brand and demand.
2021’s most important task: Scenario planning
Marketing budgets are the ultimate expression of strategy, and, after pushing our way through 2020, we all know how hard it can be to stay on track when funds and channels are disappearing.
Scenario planning is paramount in our current shifting business climate. To prepare for conversations with executives, marketers need to come (Read more...) with plans of action for different budget scenarios to save time and pivot quickly in the future.
McKinsey recommends having at least four different scenarios of all kinds so you have realistic options from which to choose, but I tend to think three are enough.
Teams need to look at which planned activities can be scaled up or down, how quickly that could happen, and which, if any, are time-sensitive.
Event spend plummeted by 46% from Q1 to Q2 amid shelter-in-place orders and strict regulations on group numbers, and many marketers had to scramble to decide what to do next. Teams with alternative plans in place were able to pivot faster than those who were scrambling to identify other channels.
Where to start? Make sure each plan is connected to your strategic targets. Look at whether it helps or hurts other programs you need and whether you will hit your mark. Next, partner with the finance team on marketing’s investments so they will be on the same page about what your impact is and how your team complements the company’s investment portfolio.
Get innovative with advertising spend
With event spends cut, many companies reallocated their budget to advertising channels. When faced with the issue of how to drive demand without events, many businesses have turned to advertising to fill the void.
In fact, 28% of companies had at least a 30% increase in ad spend from Q1 to Q2, and there was a forecasted increase in ad spend of around 25% through the end of 2020. Digital advertising will undoubtedly be a crucial driver of growth for at least the next 12 months, so many businesses will be investing heavily in that area.
However, it’s important to test which advertising channels are driving the most efficient business impact for your organization before investing the entire budget. Ensure that you have the insight you need before making major financial decisions, and, once you do, move forward confidently and make the right major investments.
Companies’ perceived tough choices: Brand or demand
Early on in the pandemic, many analysts recommended continuing to foster positive brand associations with customers, but we found that many firms went the opposite way. Demand programs increased more than 20%, while awareness programs dropped. In fact, 45% of all companies surveyed cut PR budgets by more than 20% from Q1 to Q2.
We found that brand spend is more dependent on company size than other categories of spend, with mid-sized companies increasing investment in Q2 and bigger companies choosing to focus on short-term gains, as their brands are already established. Smaller firms had to make a choice between the short-term and long-term goals.
The brand vs. demand debate shouldn’t be thought of as an either/or approach. Consider what stage your business is at and how much brand awareness and equity you have in the market.
If yours is a young, fairly unknown company, you can’t expect your demand generation efforts to thrive if you’re not also investing in brand and creating market awareness to help pull more people inbound.
If you’re a mature organization with an established brand, you still need to maintain a strong brand presence in your market to avoid being drowned out by rising competitors.
Consider your business’ current position, and, if budgets are slim, get creative with more cost-effective ways to continue to invest in the brand to support your demand generation and longer-term company goals.
To invest or not to invest: Customer marketing
This year, despite analyst recommendations to place importance on loyalty, investment in loyalty and advocacy programs decreased by 4% from Q1 to Q2. This drop was likely the result of immediate worry due to budget cuts, as we saw a forecasted increase for Q3.
The rebound shows that companies realized that COVID’s impact would be long-term, rather than being resolved by the summer like many hoped. The importance of protecting your existing customer base can’t be overestimated.
Customer marketing should never be ignored, and marketing organizations should look at KPIs throughout the full life cycle of the customer to be maximizing revenue potential. Ensure that your organization is continuing to fund this established revenue stream, whether you fund it with staff or programs.
How is your 2021 marketing plan shaping up?
Marketing organizations always need to focus on how best to invest their budgets to drive strategic impact — whether or not they’re operating in the midst of a pandemic.
At Allocadia, we will continue to advise companies to innovate and iterate on their planned budgets and then watch them execute with confidence.