How to Work Out Your 2022 Marketing Budget
Judging your marketing budget for a new year is never an easy task, and there is no one correct answer. However, there are ways to determine what you will need and how you should be spending your money to improve your business. It’s all about looking back to analyze patterns and looking forward to the upcoming trends.
A Look at the Trends in Marketing Budgets
Marketing budgets are growing at the moment. According to The CMO Survey, the average spending on marketing has increased by 5.2% this year alone. In the wake of the pandemic, this is a big leap. It’s also expected that marketing spend will increase by a massive 13.4% in 2022 across the board.
A closer look at the statistics shows that:
- B2B will grow between 11.4% and 16.9% for products and services, respectively
- B2C will grow between 11.7% and 13.4% for products and services, respectively
Another major trend noted by this survey is that digital marketing is the big-ticket for 2022. On average, businesses will be spending 58% of their entire marketing budget on digital platforms rather than more traditional methods. This includes websites, display adverts, PPC, social media, SEO, email marketing, and mobile applications.
That’s not to say that traditional marketing methods should get entirely ignored. Budget spend on those methods is also set to increase by around 1.4% next year. The idea is to be careful with spending your budget and ensure that you get the most out of your spending for each campaign.
Trends for Marketing in 2022
The focus is mainly on digital marketing strategies in 2022, and especially on making use of new technologies:
- Big Data – Information is a key to marketing, and there has never been a time with so much data available before. All online marketing efforts leave a trail that you can analyze to see what is working for your business and what isn’t.
You are missing out on important insights if you aren’t putting the budget towards reporting on your SEO, web traffic, social media, email campaigns, paid media, and PPC.
- Multichannel Campaigns – Paid media is a big part of online marketing, from Google Ads to display ads to Facebook and other social media platforms. Most businesses tend to focus on one or two areas for paid adverts, but that is no longer enough.
In 2022, the multichannel approach will expand as companies create campaigns that cover a range of platforms. The idea is to reach your audience at every point of their online experience so that your business comes up first in their minds when it’s time to make a purchase and that you are there with an advert they can click on when that time comes.
- The Importance Of Updating Your Online Presence – Having a website for your business has been an essential marketing element for the last 20 years. However, ensuring your website is as up-to-date as possible has become increasingly important.
Google is making regular changes to its search algorithm, and if you don’t keep up, your website could get left behind on the search results. One of the latest Google updates relates to user experience, meaning this should be a significant priority when looking at the design of your website.
How Businesses are Working Out Their Marketing Budgets
There are three main ways of determining a marketing budget:
- The Cost of Advertising – Work out how much it costs you in advertising to convert a lead into a paying customer on average. Then, look at how many new clients you ideally need to bring in during 2022 for your business to succeed. This equation will tell you how much you need to put towards advertising for the year.
- The Revenue You Make Per Customer – This is the inverse way of looking at the cost of converting a lead. Instead, focus on how much you make per customer to determine customer acquisition goals for your year ahead. The higher your revenue per customer, the more you can afford to acquire each one.
- Percentage of Your Business Revenue – This is possibly the most common method of working out a budget for marketing. Look at how much your company is bringing in or how much you want to bring in during 2022, and set your budget accordingly. Companies are generally looking at around 8.6% of their total revenue for their marketing budget.
Digital Marketing is Essential in 2022
The fact that businesses are looking to spend over half of their entire marketing budget on digital shows that this is where the majority of your attention should be going. But where exactly? The realm of digital marketing is fairly vast.
eCommerce has been growing steadily in the last decade as more people learn to trust the idea of shopping online and businesses are improving their delivery methods. In 2020, the growth in eCommerce was exponential, which is hardly surprising. Even though lockdowns are lifting and many cities are going back to some form of business as usual, there is still a significant shift towards online shopping that isn’t going to disappear. People have become accustomed to the convenience of getting their groceries delivered every week, having the specials arrive via email or mobile app, and being able to make a purchase right then and there.
Looking towards 2022, it’s worthwhile deciding if you need to invest in creating an online shop on your website or having your mobile app for eCommerce. You can start small, sending out your invoices and managing to ship, or it may be worth going through Amazon or other similar platforms. In doing this, you can see how your market reacts and if your dedicated eCommerce store is viable.
- Email Marketing
Email marketing is still one of the top digital methods of talking directly to your customers. Despite significant law changes around personal information protection worldwide, you can still do a lot with an email database. First, you need to ensure that you have the contact information legally and permission to use it. Then, you can use email marketing throughout the sales journey. You can use it to nurture new leads with personal messages about how your business can meet their needs. For existing customers, you can keep your relationship fresh in their minds by offering these people special deals or giving them a first look at new products or sales. It’s all about segmenting your database properly and tailoring your messages to each group. A major improvement to business being brought about by email campaigns is the “abandoned shopping cart” campaign. Setting up an email thread to remind shoppers that they have placed items in their shopping cart on your website but have not made the payment yet is a game-changer. It regularly results in a large percentage of those people heading back to your website and finishing the sale.
- Search Engine Optimization
Search engine optimization (SEO) should have been part of your online strategy when you decided to build a website for your business. Without it, you will never rank on the search engine results pages, and you will never get that all-important digital path for new customers to find your business. SEO is also an ongoing marketing method, where you have to continually monitor, test, and adjust what you’re doing to your website. You can also optimize YouTube videos, social media posts, and reviews to add extra weight to your SEO campaign. A major area to look at in 2022 is the user experience. Google has now started weighting things like the stability of a page as it loads and the speed it loads and equating this to the user experience. Make sure you look at Google’s Core Web Vitals to see if your website is working well.
There is no greater time saver than automation technology when using marketing technology to your advantage. There are so many ways to deploy automation in your business for marketing, and each one has some incredible benefits. For example, using tools like Google Optimize or MarketingCloudFX, you can use machine learning to analyze your website and your marketing campaigns to show the buyer’s journey from lead through to conversion. You no longer need to sit and go through your analytics to come up with answers about where people could be sticking or falling out of the sales funnel. Instead, the technology will show you where and how to fix it.
Including Market Research in Your Budget
As you can see, a lot is changing quite rapidly regarding the technology available and the consumer trends that come as a result. This is why it’s essential to invest in research around your marketing and your target market in today’s world. You should always put money from your marketing budget into research so that you can expand into new avenues easily and not get left behind on the trends. Doing exhaustive research is the trick to knowing how much to spend, where to spend it, and why.