Industry Insights

How to Plan the Right Level of Marketing Spend For 2018

According to Forrester, US digital marketing spend will reach nearly $120 billion by 2021, but it also projects this spending will slow overall and the areas of focus for marketing investments are expected to be search marketing, display advertising, online video, and email marketing. In parallel to this prediction, Gartner expects budget stagnation will hit more marketers’ budgets heading into 2018 and claims that marketing leaders will be asked to do significantly more with only incremental increases in budget. Considering securing more budget has always been a pressing challenge for marketing globally, working with smaller budgets doesn't mean marketers should settle for reduced marketing performance. In fact, there are so many ways to Promote Content Organically Without Paying a Cent. Therefore, this article will shine a light on expected marketing investment patterns for 2018 to help marketers plan the right level of spend for their business objectives. 

“We are seeing a shift away from quantity, toward quality. Within the next five years, we anticipate investment in ad impressions going down. Instead, marketing budgets will go towards brand experiences, CX and in-store experiences and knowledge of sales agents – the things that will help demonstrate brand promise,” said Shar VanBoskirk, principal analyst at Forrester, in a statement. “Many companies now are wasting impressions, which can annoy customers. It is important to determine user needs and tailor content appropriately. In addition, the structure of marketing and digital teams will shift as agencies take a more holistic and integrated approach to planning.”

Outspending is no longer taking marketers to the next level but, outmaneuvering can go a long way. VanBoskirk says that Forrester has been sizing spend on online and digital media for nearly twenty years, and based on data collected, the experimental marketing strategy pattern they saw between 2008 and 2012 has completely changed, as today’s modern marketers are more mature with capable measurement practices. In other words, marketers do not have the luxury to throw a bunch of marketing efforts against a wall and wait to see what sticks anymore. 

To Win Millennials’ Wallets You Need To Win Their Hearts First 

Forrester also reminds marketers that Millennials now have settled into a high-spending life stage as they establish careers, homes and families. To give some idea of the stakes involved, Accenture claims that there are roughly 80 million Millennials in the United States alone, and each year they spend approximately $600 billion. By 2020, Accenture projects that their spending in the United States will grow to $1.4 trillion annually and represent 30 percent of total retail sales. Good news, Millennials demonstrate the most brand loyalty of all the generations said a survey of more than 1,000 consumers conducted by Yes Lifecycle Marketing. What’s more, the study suggests that as long as brands keep their promises and deliver personalized experiences, Millennials are the most open to the marketing messages. One of the most effective ways of engaging with these brand loyalists is sending personalized emails. In fact, Millennials value email more than any other generation and it makes sense as this age group has utilized email as a primary engagement channel since they were writing their school papers. Besides email marketing, social media is very influential for this digital native generation. To be more specific, Millennials prefer Facebook more than any other generation, based on the same survey. So the takeaway from these results for marketers is that to tap into this unique new breed of plugged-in, they should court them actively via tailored content through their favorite channels such as Facebook and email which all are aligned and consistent.  

US Digital Video Ad Spending Will See Double-Digit Growth

Forrester states that spend on online video is up 114 percent since 2014  The data from eMarketer backs it up as it found that U.S. adults watched 67 minutes of online video a day in 2016, whereas they watched just three minutes of online video a day in 2009. Additionally, Vice Media Inc. and BuzzFeed Inc. have raised millions from investors at valuations surpassing $1 billion due to their potential in video. 

A HubSpot research unveiled the breakdown of what people pay the most attention to versus only skimming for information. The breakdown illustrated that 55% of respondents stated that they pay close attention to video content. In recognition of this emerging trend, in late June, 21st Century Fox Inc.’s sports department, Fox Sports announced that it would eliminate about 20 writing and editing positions and replace them with a similar number of jobs in video production, editing and promotion. MTV News has also followed suit as it announced that they would shift from the long form editorial work, which the media company has been promoting in the past two years, to short-form video content as they believe it is more in line with young people’s media consumption habits. 

While these figures portray the good state of video ad spending, the predicted data encourages markets even more. eMarketer, for instance, expects US digital video ad spending will see double-digit growth annually through 2020. Research firm Advertiser Perceptions found that 72 percent of marketers planned to invest in those digital video ad dollars with YouTube in the next 12 months. Since less competition is established for video content than a text article, an SEO-friendly video on YouTube is 52 times more likely to show up in one of the Google search result pages. More importantly, a study by shows that using video on landing pages can increase conversion by 80 percent.   

Even though video is still going strong, today it may not be enough to send a plain video because it needs to include some interactive elements such as games or, it should be a shoppable video which is great influence driver as it blurs the line between moments of inspiration and actually buying. How it works is that consumers are able to click on the product that appears in the video to purchase it right away. Some social media platforms such as YouTube have already adopted this trend whereas Facebook is also rumored to be exploring shoppable video ads. On that note, Google ran a test for its in-store visit measurements feature last year, and as a result, nearly a million people visited Wendy’s and ordered a square-shaped hamburger or some nuggets after viewing the commercials on YouTube. Google expects to see a significant increase in advertisers’ margin with utilizing this feature as Virgin Holidays claims that a customer purchasing in-store after clicking on a search ad is also three times more profitable than an online conversion.

Reduce Costs and Minimize Waste 

Due to incremental increases in marketing budget, markets also should focus on reducing costs and minimizing waste. A study shows that mid-to-large B2B organizations lose an estimated $958 million each year because their content marketing has gone wrong. Additionally, 65 percent of content is unused mostly because the content is not findable or relevant. To tackle this issue and minimize the waste, marketers need to assess their marketing programs in light of data to make sure that the investments are delivering value to the business and based on the results of the assessment, marketers need to cut away long-cherished programs if they don’t deliver against marketing’s objectives and business goals. To put this into a perspective, email and the website, which are supported by the most widely deployed marketing technology capabilities, can be the target programs for budget cuts. Since these channels are mature, marketers can either divert funds which are initially allocated for these channels to another emerging area such as mobile marketing. In short, divest marketing programs that are not working, allocating budget elsewhere.

Divesting marketing programs without a budget to test is easier said than done. Gartner suggests to develop a data-driven approach to media cost optimization instead of relying on gut feel alone. The research firm gives marketers from Vodafone as an example as the U.K.-based telecom company worked with data scientists to understand the value different channels bring to their customers’ journeys. It tested channels in isolation and in combination with each other, examining how different levels of spend impacted sales volume across regions in the U.S. It found that TV delivered strong impact, illustrating that traditional media — even though it’s an easy candidate for optimization — can still yield positive results for a brand. 

Procter & Gamble Co., one of the leading companies in the consumer packaged goods (CPG) industry, said that its move to cut more than $100 million in digital marketing spend in the June quarter didn’t result in a reduction in the growth rate, meaning the spending they cut was largely ineffective. Chief Executive David Taylor said in an interview that the digital spending cuts are part of a bigger push by the company to more quickly halt spending on items -- from ad campaigns to product development programs -- that aren’t working. “We got some data that said either it was in a bad place or it was not effective,” Mr. Taylor said of the digital cuts. “And we shut it down and said, ‘We’re not going to follow a formula of how much you spend or share of voice. We want every dollar to add value for the consumer or add value for our stakeholders.”

When it comes to reducing cost, Automation can save a good deal of time when it is used wisely. However, it is also quite important to map out which tasks within the organization can be automated and which tasks can’t be, as the only thing worse than not automating is trying to automate too much. There are a plethora of tools that content creators can use to spread the word so they can focus more on content creation. The good news is, many of these tools offer trial runs for free or minimal investment. Buffer, for instance, schedules social sharing with a content calendar and offers plug-ins to curate content from anywhere on the web. It is free with limited features; $10/month for one user; $50-$250/month for larger businesses. Or Hootsuite offers pretty much the same features, plus integrates with a few other social channels and also offers basic social listening capabilities. It is also free with limited features; $10/month up to 9 users; deeper analytics capabilities are available at an extra cost; its pricing for an enterprise solution requires contact with them.  

Strip Away the Redundant Systems

According to Gartner’s Marketing Technology Survey 2016, marketing organizations use an average of two digital marketing analytics systems, making digital marketing analytics No. 1 out of 29 martech categories with the highest rate of redundant systems. The reason behind this is not that marketing analytics technology doesn’t yield lucrative results, yet it’s considered to be one of the marketing organization’s top capabilities supporting business goals. The issue, however, is that it requires investments in people and data. Considering martech now accounts for 27% of the marketing budget, it is very prominent to spend time upfront to figure out a potential premium that would be added to the cost of the platform, before making a purchase decision. 

Without tapping into the results powered by analytics, all the marketing efforts are almost randomly executed. Data and analytics light up the map so marketers can navigate daunting waters. That being said, in Walker Sands’ study, while some marketers responded that they are satisfied with the value they’re getting from their martech stacks, only 3 percent say they’re getting full value. When the study digs deeper into the reason Marketers most commonly cite a lack of technology strategy (39 percent), analytics (36 percent), and training (33 percent) as standing in the way of them fully harnessing the power of their tools. 

Do not only strip away the redundant marketing technology but also stop promoting your content on every medium you can think of because it won’t work and you’re wasting your time. Divert the resources to make sure that your messaging is aligned and consistent across the channels that resonate with your target audience most.  


Considering emerging trends cited above such as video, the demand from Millennials for real-time brand interactions, the rise of data-centricity, and so on, it is safe to say tools driving real-time customer interactions are poised for a remarkable bloom in 2018. The premise of these tools is developing a contextual understanding of customers which is really what organizations focus on more and more. Taking into account that back-to-school is in full swing and the winter holidays are just around the corner, it’s the perfect time for marketers to assess whether their marketing programs are aligned with the right level of spending for achieving their business goals. 

Venus Tamturk

Venus Tamturk

Venus is the Media Reporter for CMS-Connected, with one of her tasks to write thorough articles by creating the most up-to-date and engaging content using B2B digital marketing. She enjoys increasing brand equity and conversion through the strategic use of social media channels and integrated media marketing plans.

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