The COVID19 environment is encouraging businesses to revisit their marketing approach
For some, this means WAIT AND SEE: do as little as possible in the hope that things stabilise. Others sense opportunity and are taking A BOLDER APPROACH: increasing marketing investment to generate more leads.
Whatever the case, businesses should properly measure marketing investment and outputs. As accountants, we can help business owners make the best decisions based on their data.
Here are some points to consider:
1. Defining Marketing Spend
A starting point is to properly define what constitutes ‘marketing spend’. Marketing personnel, marketing technology and paid advertising are obvious components. Perhaps you also invest in content creation or marketing training? All one-time and recurring marketing costs should be captured.
2. Trend in Marketing Spend
How much will you spend on marketing this year? How does this compare to the last three years? And how does it compare with your competitors? Understanding and explaining the trends in your business is important.
3. Marketing Spend as a Percentage of Revenue
A recent CMO study shows that different industries invest very differently in marketing. At the low end, Health & Pharma spends 2.6% of revenue while Retail averages 21.9%. Other big spenders include the Automotive and Financial Services industries (around 12%) while Entertainment and Media spend around 6%. How much do you spend and where do you rank relative to your peers?
4. Spending on Marketing Knowledge and Technology
According to Gartner, companies have increased spending on training, research and consulting to build their knowledge base. There has been a similar increase in investment in marketing software, both on-premise and cloud-based. Have your spending priorities shifted?
5. Spending on Digital Marketing
The CMO survey projects that spending on digital marketing will increase from the current 44% to 54% by 2024. The largest portion is allocated to social media, followed by online video and then search. What’s the trend in your business?
6. Content Marketing
A study by the Content Marketing Institute suggests successful B2B marketers spend 40% of their total marketing budget on content marketing. This number is expected to grow since many marketers believe it will have the biggest impact on their business in the near future.
7. Campaign Measurement
Many marketers run ‘campaigns’, which have a budget and specific targets. Measuring campaign success is important to enable constant improvement.
8. Link Marketing to your Business Goals
Marketing activities should be designed to help the business achieve its goals. Let’s say you want to grow revenue by 10%. How many quality leads do you need? How many leads do you need to convert into sales? What is the expected average revenue for each of these new customers? Tracking this data will establish whether you are on track to meet your revenue goal. If not, you need to change something.
We look forward to discussing how we can use data to help you make smart decisions in marketing. Please get in touch with the Salisbury Team in Albury-Wodonga on 02 6041 3014.