- Request a demo
- United States
Staying on top of trends that might influence your 2024 marketing budget is almost a full-time job. Many chief marketing officers (CMO) started working on their marketing budgets last October. But think of all that’s changed in just that brief span of time.
Inflation has slowed but is still running high. Shrinkflation is real — and not just for snacks. Interest rates are stuck at their highest levels in two decades. And despite job growth in sectors like healthcare and retail, the tech sector has already seen significant layoffs this year. Technology, like artificial intelligence (AI), virtual reality (VR), and augmented reality (AR), continues to advance at lightning speed. Geopolitical volatility seems off the map. Meanwhile, half of the Earth’s population is poised to vote in national elections this year.
The dynamic nature of marketing has always made budgeting difficult. Your budget is a sizable commitment by your company that marketing is too often called on to defend. So, staying ahead of the latest trends is critical. In this post, we offer some suggestions that can help you stay ahead of the curve, make the most of your 2024 marketing budget, and leave your many stakeholders feeling satisfied.
First, let’s get the basics out of the way, just in case you’re new to marketing or getting hands-on with creating a marketing plan and estimating advertising spend and other costs.
A marketing budget is the annual monetary commitment made by a business to operate a marketing department. The budget covers everything from staff salaries and the cost of office space to annual allocations for specific marketing projects and delivery channels.
So, if your marketing plan calls for a digital ad campaign, for example, your budget should cover the entire cost of creating the ads as well as the cost of running them on the digital channels you select.
Later in this post, we’ll provide some reference points for how big your budget should be, based on industry standards. First, we’ll explore 10 key trends that can have an impact on your 2024 marketing budget.
Variables make budgeting an art, not a science. These are unpredictable factors — things you can’t control but need to be aware of. They may impact budgeting significantly over a long period, or not at all. We touched on a few of these variables in the intro, but here’s a closer look.
Creators partner with brands to build a social presence by developing content and then pushing it out to their followers. Creator marketing is an increasingly significant component of marketing budgets, and it’s only going to get bigger. In 2024, 92% of brands plan to increase their spending on creators, with 36% intending to allocate at least half of their entire digital marketing budget to creator marketing.
The biggest challenge for brands is finding the right content creator partnership, which can be a time-consuming and potentially risky process. One top tip is to align with a creator who has more than just a broad reach. Brands should select a creator who shares the same values and has a strong knowledge of the target audience and their wants, needs, and preferences.
Another trend that is destined to deepen in 2024 is the use of marketing science. Marketing science is the process of using scientific methods to understand customer needs. Companies that prioritize market research and integrate sales funnel and other data into their research can make smarter marketing choices and optimize their budget allocation across marketing channels.
Here are some examples of the tools that are used in marketing science:
Various industry standards and benchmarks offer valuable reference points for organizations trying to decide how much to allocate to marketing, including their digital marketing budget, in the year ahead. However, every business is different and there is definitely no one-size-fits-all approach when it comes to developing an appropriate digital marketing plan.
Gartner, which conducts an annual CMO Spend and Strategy Survey, found in its 2023 research that marketing budgets were unchanged from the prior year at 9.1% of total company revenue. Other resources, such as The CMO Survey, confirm this number. While it’s a good guide point, you should also consider factors such as how much your competition spends on marketing and what your specific marketing goals require in terms of resources.
One trend making budgeting much easier for marketing departments is the rapid proliferation of advanced technologies such AI. Artificial intelligence is developing far faster than Moore’s Law, which holds that chip capacity doubles every two years. AI capacity is doubling every three months!
This means computers can do more with less, and faster. Machine learning, a subfield of AI, is used to collect, sort, analyze, and group huge amounts of data, including conversation intelligence from phone calls. Machine learning can do this quickly and accurately without burdening human resources.
AI-driven approaches allow marketers to optimize budget efficiency — from macro-level budget allocation to micro-level targeting — in a way previously not possible. That allows marketers to use available resources more effectively.
Invoca’s State of AI in Digital Marketing Report highlights this trend: 90% of the marketers we surveyed said they plan to increase investment in AI this year. And just as many respondents reported that they will dedicate budgets to AI-powered martech in 2024.
Many marketers are allocating more budget to digital marketing so that they can make better use of the mountains of data and digital insights collected from customer interactions. Marketers use this data to drive personalized services and higher returns on investment than they might see from traditional marketing.
Even in the digital sphere, analog sources play their part in creating a complete picture of marketing’s performance. For example, call tracking enables marketers to attribute marketing leads that convert via phone interactions, eliminating a huge “dead zone” of data.
More than two-thirds of consumers make a phone call during their buying journey. In the healthcare sector, for instance, three-quarters of consumers prefer to make a call. Tools like Invoca’s call recording and analysis software can help you optimize your marketing budget research by helping you determine whether marketing leads are converting from phone calls to a call center or other business premises. Armed with that attribution, you and your team can confidently allocate marketing resources when developing your marketing budget.
The digital landscape is comprised of many different channels and platforms. The budget allocation across this landscape is influenced by market research, consumer preferences, and the specific objectives of a marketing campaign. Broadly speaking, the most popular channels and platforms can be categorized as:
You can maximize paid search budgets by accurately tracking conversions. Conversions are easy to track online. Call tracking software allows you to quickly capture information on sales conversions occurring over the phone. Invoca’s AI software marries online conversion data call conversion data to provide a complete picture of marketing mix attribution. This lets you see which campaigns and channels are driving the most valuable traffic, helping you make more informed decisions about how best to utilize your marketing budget.
Shifts in consumer behavior are always occurring — and they can have a significant impact on a marketing budget. Consider the major shift away from a mass market approach and toward more micro, demand-based marketing to consumers. The reason for this change is that online access has given the consumer the ability to buy something immediately from almost anywhere — a convenience they’ve embraced.
As a result, more companies are personalizing and localizing their products for consumers. Give them what they want, where they want it, when they want it, is the mantra. In India, for example, you’ll find crispy paneer makhni tacos on Taco Bell’s menu, but (sadly) you won’t find them in the United States. At least, not yet.
Consumer behavior also influences pricing. Brands must often adjust their marketing communications and product strategies to align with evolving consumer preferences and purchasing patterns.
Issues like climate change and environmental sustainability are issues of concern for today’s consumer. This has companies across industries focusing more on setting and communicating goals for carbon reduction, energy conservation, and waste diversion from landfills. Many are formally shifting to sustainable marketing and CSR practices to align with societal expectations — and because they see it as the right thing for a modern business to do.
Companies also see an embrace of CSR as contributing to their future, long-term brand value and enhanced customer loyalty. That’s led to a rise in green branding by companies aiming to position themselves favorably in front of their target audiences — especially Gen Z, which is more heavily invested in sustainability and will pay more for green products.
Just make sure that if you claim something is “green,” it truly is. There is a growing backlash among consumers against companies they believe are greenwashing, or making false or exaggerated environmental promises.
The generally accepted rule of enterprise finance is that marketing budgets drop during economic downturns and rise slowly during recovery. However, some experts urge brands and their marketers to turn that rule on its head. They argue that cutting marketing during a downturn can lead to missed opportunities to grow market share. After all, if much of your competition is cutting back, it could leave a void for your company to step into.
So, instead of spending less on marketing, it pays to spend smarter. Marketing teams that are prepared for downturns can react more quickly to take advantage of opportunities. It is also imperative to stay in tune with consumer behavior during a recession and listen to the voice of the customer for insight that can help determine when and where to make new marketing investments.
So, there you have 10 trends to consider when developing or updating your marketing budget. And as you prepare your budget, you will want to take a structured approach to ensure effective allocation and management of resources.
There are plenty of marketing budget templates out there to help guide you. These five key steps can also help move you toward developing an appropriate budget.
Don’t operate in a silo. Make sure you fully understand the overall goals for the business so that you can align your marketing objectives and the 2024 marketing budget with your overall strategy.
What are you really spending on marketing? Conduct an audit, fully review existing marketing expenditures, and use relevant technology tools to help you establish a baseline for the budget. Only then can you spotlight areas of concern and make adjustments to create a more efficient marketing effort that can boost your return on investment (ROI).
Don’t just set marketing goals — make sure they are SMART goals. SMART goals are specific, measurable, achievable, relevant and time-bound, and they can keep you and your budget on track.
You can never know enough about your target audience or the competitive landscape when making marketing budget decisions. There are several types of market research you can use, depending on your needs. (Often, you’ll find you need to consult several types of research findings to make the best marketing plan.)
Here’s a tip for 2024 marketing budget success (or for any year, really): Strategically allocate most of your budget to strategies that have worked well for you in the past, but also devote some of your budget to new avenues you want to try (and that seem to be working well for those you are competing against). The often-used 70-20-10 rule is a good guidepost for how to allocate your digital marketing budget and other resources.
Not every trend outlined in this post will be relevant to your 2024 marketing budget. But you should strive to stay on top of what’s happening throughout the business, economic, and consumer landscapes to make the most informed decisions. Businesses must remain agile and flexible in their budget planning because circumstances can change overnight. (Think of the recent pandemic and all of its disruption, or the global financial crisis of 2007-2008.)
Technologies like Invoca can provide marketing teams with an edge at budget time. The solution tracks how many phone call conversions each marketing campaign generates, allowing teams to understand their full ROI. Armed with this intel, marketers can prove each campaign’s full impact on revenue, and double down on their highest-performing programs. This gives them the data they need to make smarter optimizations, defend their spend, and build an ironclad case for more budget.
Want to find out more about how Invoca can help you make the most of your marketing budget? Check out these resources:
To learn more about how Invoca’s conversation intelligence and other capabilities can help your business achieve better results from your marketing spend, get in touch with us today to schedule a demo.
