We believed it would be interesting to watch how other marketers are responding because the economy is in a state of flux as a result of inflation picking up steam, the war, rising interest rates, and other uncontrollable events. And we weren’t just interested in how American marketers were responding; we also wanted to know what firms of all sizes, in all significant industries, were doing globally (both for B2B and B2C).
So, at my advertising company, NP Digital, we made the decision to use site traffic to conduct a large poll in order to learn what other marketers are doing and the “why” behind their choices.
Here is what we discovered.
Earned Media
Let’s examine each earned media channel in more detail to observe how budgets are being redistributed.
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SEO
According to a report, 68% of businesses are boosting their SEO spending. The main justification given for this change is that it offers a greater return on investment than sponsored advertising. True, but results take longer to manifest.
11% of respondents stated they will keep spending money on SEO through 2023. The most common explanation for this is that there wasn’t much leeway in their entire marketing budget owing to financial constraints.
Regarding the 21% who indicated a decline… It was a tie between the two primary explanations why.
The first was that SEO wasn’t generating results, and the second was that the marketing team was forced to make budget concessions.
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Organic Social Media
32% of businesses want to increase their expenditure on organic social media. The main argument was that they couldn’t spend as much money on sponsored social media as they would want due to Apple IOS modifications.
With the main justification being that you need to be on the major platforms in order to engage with clients and new consumers, 26% of respondents stated they would maintain their spending in its current form.
A staggering 42% of respondents said that they will cut back as a result of organic reach steadily dropping and organic social media not offering the same ROI as it once did.
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Content
83% of businesses are boosting their spending on content creation. The necessity to provide material in a variety of media, particularly video, and the related costs were cited as the top reasons.
8% indicated they will stick to their spending plan. Their inability to spend more was mostly caused by the state of the economy.
And 9% indicated they are cutting back on their content development budget since AI solutions make it easier and more affordable for them to do so.
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AI Tools
Speaking of AI tools, they are currently all the rage. Many businesses use these APIs, such as GTP-3, Dall-E, and ChatGPT, to build their own solutions or improve the effectiveness of their marketing. in particular with earned media
A startling 98% of respondents claimed they would spend money on AI products in 2023. These three basic reasons served as the primary justification:
- Save money by automating content creation
- Reduce the amount of time spent on creating content
- Ability to reduce headcount in the content department
2% of respondents indicated they would not test out AI tools, and the major reason was that they believed the tools’ quality didn’t meet their expectations.
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Email Marketing
56% of companies said they would increase their email marketing budget. It was a toss-up on why marketers said they would increase their budget…
Because their list size is growing so their costs for housing email addresses are going up
Due to privacy laws, companies are spending more to make sure they are compliant with personal data
Companies are investing more in marketing automation
38% of companies plan on maintaining their email marketing efforts. The main response why were they believed email is an important channel to use to communicate with existing and potential customers.
6% said they plan on decreasing their email marketing budget. There were 2 main responses on why marketers said they would decrease their budget… it was between
Companies pruning their email list of inactive subscribers would allow them to save money
Companies are switching email marketing software providers to save money
Very few companies planned on reducing headcount related to email marketing efforts.
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UX/Conversion Rate Optimization
61% of companies plan on increasing their overall UX/CRO budget. It was a toss-up on the main reason they wanted to increase their overall budget in this category. The reasons were:
With the rising cost of ads, CRO helps provide a better ROI
UX important part of the overall marketing experience
26% of companies plan on keeping their UX/CRO budget the same primarily for the same reasons as above.
And 13% plan on decreasing their budget due to economic reasons as the main driver.
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Podcasting
Podcasting is one of those marketing channels that isn’t saturated yet. And the survey results show that marketers believe in it as a viable channel for the future.
92% of companies are planning to increase their podcasting budget in 2023. The main response was that they currently don’t have a podcast and are planning on creating one.
5% of companies are planning on maintaining their existing podcasting budget. The main response on why is they haven’t figured out how to drive meaningful revenue from their podcast so they don’t want to spend too much yet.
And 3% plan on decreasing their podcasting spending. The main reason was due to economic factors requiring marketing to make cuts.
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Community Building
84% of companies are increasing their spending on community building. The main reason was that marketers want to feel more in control of their destiny instead of being beholden to algorithms that they can’t control.
12% of companies plan to maintain their community building. The majority of the companies in this category felt it was important to increase their budget but they weren’t able to due to economic reasons.
And 4% plan on decreasing their community-building budget due to the economy.
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Paid Ads
There are a lot of different paid ad channels, for this category we looked at the main leaders. So, let’s start off with search ads.
Search Ads
With Google and Bing ads, most companies (59% and 47% respectively) are looking to increase their budgets. Almost all of the responses on why were that it provided a clear ROI compared to other marketing channels.
Both channels had roughly the same percentage for maintaining the budget at 18% for Google and 19% for Bing. The main responsibility for maintaining the budget as they haven’t figured out how to scale while maintaining profit margins.
And as for the decreases (23% for Google and 34% for Bing), the main responses were related to:
- The average cost per click for their industry is getting cheaper
- Fewer people were searching for the keywords they were bidding on so their overall spending is decreasing.
Social Ads
The percentages in the graph above are all over the place, but the story is consistent when you look at the responses.
With Facebook, Instagram, and Snap, the main responses for either maintaining or decreasing spending are related to the Apple IOS privacy changes. In other words, marketers aren’t able to generate the same ROI from Facebook as they used to be able to.
Some of the companies got lucky and were able to maintain their spending to generate a similar ROI and some had to decrease their spending in order to keep their ads profitable… again due to IOS privacy changes.
A smaller percentage on these 3 platforms were able to increase their budgets. The main response to increasing is that their campaigns are profitable so they plan on scaling.
As for YouTube and Pinterest, (28% and 35% respectively) said they planned on increasing their budgets. The main response was their ads are profitable and they want to scale them.
33% (YouTube) and 29% (Pinterest) plan to maintain their ad spend because their ads are profitable. The second most popular response for maintaining was they can’t scale due to it making the ads unprofitable.
As for the decrease in YouTube and Pinterest ad spending, the main response was related to the economy impacting their business and budget cuts in marketing.
With Tiktok, the majority of marketers, at a whopping 84%, said they plan to increase their overall spending on this platform because they see it as an untapped opportunity.
And with LinkedIn, the majority of the companies who responded about their LinkedIn ad spend were in the B2B category. 57% plan on increasing their budget with the number 1 response being that they feel it is the best platform to target their ideal customer.
35% plan on maintaining their LinkedIn ad spend with the main reason being that it is working but they aren’t able to scale due to a lack of inventory for their target demographic.
And 8% plan on decreasing their LinkedIn ad spending with the primary responsibility being due to their company slowing down for economic reasons.
Now I wanted to save the most interesting one for last, which is Twitter. I didn’t actually expect these results… and you’ll see why…
28% of companies plan on increasing their Twitter ad spend. The number one response on why they feel there is an opportunity to acquire customers for less on the platform due to companies pulling out after Elon bought them.
And 34% plan on decreasing their ad spending. When asked why the main response was they don’t agree with how Elon Musk is running the platform and the changes he has been making.
Other Online Ad Buys
Let’s dive into each of the channels as the responses were interesting.
With podcast ads, 78% plan on increasing their ad spend. The top reason was they planned on buying ads to promote their own podcast in order to make it more popular. 18% plan on maintaining their ad spend with the responses primarily discussing how it produces a positive ROI or that companies felt it was great for branding and cheaper than radio.
With the 4% of respondents saying they are decreasing their ad spend, the primary reason was that they are seeing a decrease in ROI from their podcast ad spend.
For banner ads, 34% plan on increasing their ad spend with the main response being it’s profitable and they want to scale it. 52% plan on maintaining their spending with the main reason being around it being profitable. And 14% of companies plan on decreasing their ad spend due to mainly not being as profitable as they would like.
As for remarketing spend, 94% plan to increase their ad budget as they see it as one of their most profitable marketing channels. 5% plan on maintaining it as it is profitable. And 1% plan on decreasing their remarketing ad spend with the main reason being around lack of conversions.
Now for OTT/CTV… if you aren’t familiar with these terms, it’s related to streaming TV.
52% of companies plan on increasing their ad spend for OTT/CTV with the main reason being it provides more transparency and trackability than traditional TV ads. 35% plan on maintaining their spend for this category with the main responses being related to it providing great branding and or profitability.
As for the 13% that plan on decreasing their spending, the main reason was shifting the budget to Google ads and other channels that are more profitable.
Now looking at influencer marketing, which is mainly used by eCommerce companies, 41% plan on increasing their spending the main reason being is it provides a better ROI than other marketing channels that they are using.
17% plan on maintaining their spending with the main response being that it is profitable and cutting it would cause the company to lose money.
And funny enough 42% plan on decreasing their influencer marketing ad spend with the main response being that they aren’t able to produce a positive ROI.
If you look at the percentages you can clearly see influence marketing is either working for companies or isn’t. Roughly 58% of the companies that use this tactic are able to do so profitably.
Traditional Ads
With traditional ads, there was a big trend. Almost all channel companies responded with their plan to decrease traditional ad spending.
It was a toss-up for a few reasons. The main ones are:
- Lack of ability to track return on investment
- The economy causing marketing budget cuts
- A shift toward moving ad spend to performance marketing due to better results.
A lot of companies are still maintaining their budgets. When we dug through the responses very few companies are stopping their traditional ad spending together as they still believe it is an important channel to reach their customers.
Overall Marketing Budget
As you saw from all the graphs above there are a lot of budgets shifting around.
But we wanted to also know what companies are doing with their overall marketing budget. Are they increasing… decreasing?
I had anticipated that the downturn would cause many businesses to cut back on their spending, but generally, both B2C and B2B spending is rising rather than falling.
Only 23% of B2C organizations aim to reduce their spending, while 51% plan to keep it. Instead, 26% want to increase their spending.
The major arguments for expanding or sustaining their expenditures focused on the profitability or general effectiveness of their marketing.
Regarding the decreases, the economy and how it is already affecting their business accounted for the majority of the justifications.
Regarding B2B, many businesses in this sector generate recurring income and have significantly better financial performance predictability into the next quarters.
The main justification for 34% of them boosting spending is that their marketing is lucrative, or at least when viewed from a lifetime value viewpoint. 45% say they’ll stay put, with the aforementioned justification serving as their main motivator.
Additionally, 21% of B2B businesses anticipate reducing their total marketing budgets as a result of the economy’s negative effects on their overall performance.
Conclusion
Even though most marketers are worried about the economy and are making changes to their marketing, the majority of them are increasing their spending or maintaining versus reducing. From an earned media perspective most companies are looking to increase their budget due to it providing a higher ROI, other than organic social with the primary reason being organic reach is continually declining. And with AI tools becoming the latest craze, most marketers are at least trying them out.
From a paid ads perspective, most companies are planning on increasing or maintaining their search ads. But with social ads, many companies are planning to decrease. Not because of choice, but due to IOS privacy changes impacting the performance of their ads and companies not being able to scale their social ads as profitably as they use to.
Funny enough with it comes to Twitter it’s a bit polarizing as 28% of companies are planning on increasing ad spending because 34% of companies are planning on decreasing or stopping their ads due to their views on Elon Musk and the decisions he has made.
As for traditional ad buys, in all channels, the majority of companies are planning on decreasing their ad spend and shifting a lot of the money to performance channels like Google Ads or SEO which is more trackable.
So now that you know what others are doing, the real question is, what are you doing with your marketing budgets in 2023?