With Terry Arnold, Vice President of Marketing, True Influence
If there’s one thing B2B sales and marketing pundits agree on, it’s that the COVID-19 pandemic accelerated a spending shift to digital channels that was already well under way before the world turned upside down. Most observers believe that trend will continue well into 2022, with a heavy focus on branding, and it may become the norm moving forward.
This “new reality” will demand that B2B marketers make data-driven, strategic decisions as they maintain their revenue pipelines in the coming year. And regardless of what the experts are saying, that will mean putting your resources behind integrated, multi-channel programs. You can’t just run branding display advertising campaigns forever – sooner or later, you have to engage more deeply with prospects and move them toward one-on-one conversations with marketing and then sales.
In this post, I’ll look at what we learned in 2021, what this tells us about 2022, and how intent data and advanced data-driven B2B marketing methodologies will be the key for maintaining and growing your revenue pipeline.
Let’s get this out of the way: 2021 was not pretty for B2B marketing budgets.
Gartner’s annual CMO spending survey reports that as a percentage of overall revenue, marketing fell to 6.4 percent this year. That’s down from 11 percent in 2020, and marks the first time since 2014 that number has been less than 10 percent. This finding is even more jarring when you consider that in 2020, marketing actually went up slightly as a percent of overall revenue.
Now, some context that’s missing from most headlines:
- First, 2020 was an incredibly difficult year for most everyone, so “percentage of total revenue,” year-over-year, can be a misleading measuring stick – a marketing budget that’s cut by 20 percent still looks like growth if total revenue drops by 40 percent.
- Second, the Gartner report reflects spending trends for all marketing teams, not just those focused on B2B. So findings about core B2B channels (including lead gen) are probably a little skewed. But …
- Third, consumer product marketing budgets fared best, at 8.2 percent of total revenue. B2B verticals dropped even harder, typically to between 6 percent and 5 percent.
So, there’s simply no way to spin those Gartner numbers as great news for marketing budgets.
When the pandemic hit in 2020, many companies in our core B2B verticals at True Influence saw marketing spend as an essential springboard to winning at least some revenue in a chaotic time. We experienced spending to drive attendance at virtual conferences – anything to maintain some sense of marketing continuity. And observers predicted that marketing budgets would continue to grow, at least nominally, throughout last year.
But in 2021, spending began to correct itself back to actual revenue. We’ve seen “zoom fatigue” set in as vendors decide to wait out the return of in-person conferences. The big shortfall in 2020 made sales reset expectations for closing big deals in 2021, so spending moved to branding and mindshare in anticipation of the next healthy buying cycle, hopefully in 2022.
Gartner’s survey for 2021 bears out these observations. Demand generation claimed only 8 percent of marketing budgets in the survey (again, the report covers B2C and B2B budgets), behind marketing analytics (11 percent) and customer insights (9.5 percent). And most observers think that branding will continue to be where B2B marketers put their dollars in 2022.
This year was a chance to learn. Next year, B2B marketers must put what they’ve discovered to work in maximizing return under what are sure to be tight spending constraints.
Across the board, digital channels – particularly programmatic display advertising – are predicted to dominate marketing spend for 2022.
eMarketer expects digital ad spend in the U.S. will reach $12.65 billion next year, up about 17 percent year-to-year. That actually is a slowdown from the explosive growth digital advertising has seen since 2018, but in a year where overall budgets are expected to drop, it’s still pretty impressive.
In the broader Gartner survey, paid digital display ads were near the top of the budget allocation pyramid, claiming 11.2 percent of marketing spend. Only earned social (11.3 percent) was slightly higher. Paid search accounted for 9.7 percent of budgets.
In total, CMOs spent 72 percent of their budgets on digital channels, paid and earned.
This major focus on digital has led Gartner and many other observers to suggest that brand will dominate the marketing mindspace for 2022, But “brand” is a pretty broad term. In its recent survey of CMOs, Delottie found that “brand equity” ranked as the least compelling success metric for marketers. The big winners? Engagement, sales lift and, of course, ROI.
It always comes back to revenue.
Clearly, budgets are going to be tight in 2022, not only for marketers but also B2B sellers. There’s still uncertainty in the economy, and sellers are not going to push hard on product launches or refreshes in Q1. So keeping your brand and general value in front of prospects for a few months will be job one. And the ability to scale up or throttle back programmatic display makes it a perfect platform when every dollar counts.
We’re seeing a spending shift to programmatic in Q4 among our own multi-channel customers. So brand and very high-funnel engagement will likely be the focus in early 2022.
However, you can’t generate B2B SQLs with just LinkedIn posts and banners ads. By mid Q2, B2B marketers are going to look around and ask “Where is my revenue? What do we need to do to get back the number that we really need?” So I certainly see spending on classic demand-gen like email and content syndication growing as a spend category in Q1 and Q2. Programmatic will still be a vital part of the mix, but it will serve to reinforce and lift other marketing and, by Q3, sales efforts.
Wherever you are putting your limited marketing dollars, you will have to be smart about it. And even if display ads are cheap, 10,000 empty impressions is still money wasted.
The key to maximizing any marketing channel is finding prospects who are in-market and then speaking to them on their terms. That’s true of your content marketing strategy, and it’s also true in digital, including programmatic.
This requires two sources of clean, comprehensive data:
- Contact and firmographic records that can meet demanding B2B audience segmentation requirements.
- Purchase intent intelligence that maps research activity to individuals within your active target accounts.
Customers for our DisplayBase programmatic advertising service routinely tell us how pleased they are with our ability to build audiences that match their Buying Group and other key prospect profiles, at the volume they need. When layered with purchase intent intelligence for even more advanced segmentation and content personalization, the results can be remarkable – so much so that we are actually able to guarantee CTR on qualifying programmatic campaigns.
Getting in front of the right people always matters, of course, but it’s particularly vital when budgets are tight. In the early part of 2022 this level of precision will help stretch your brand and high-funnel engagement dollars. In Q2 and Q3, you will be able to transition that interest into the one-on-one relationships that drive to ABM and B2B revenue methodologies.
Everyone agrees – B2B marketing budgets look to be tight for 2022, and digital channels, particularly programmatic display, will be the main spending priority for the year. But that doesn’t mean sinking your budget into display views that aren’t likely to convert into B2B revenue when the buying cycle restarts. With a clear strategy and the right contact and intent data, you can use programmatic to build a foundation for demand gen and sales efforts as the economy begins to warm up.