The impact of COVID-19 on marketing plans
According to Gartner’s latest survey of over 400 Marketing Executives from large businesses (businesses with revenues from $500M to $20B) across the US and Europe, business-to-consumer (B2C) digital advertising spend is expected to grow by 78% in 2021. Key findings from the survey include a 78% rise in budgets for social in 2021, 71% for mobile, 71% for websites, 69% for SEO, 65% for partner and affiliate marketing, 64% for paid search, 63% for email marketing, 58% for offline advertising, and 57% for event marketing. Budget allocations for broke down into 13.5% on digital advertising, including display, video or ads on platforms like Amazon and YouTube, while 9.4% went to offline channels and 9% went to event marketing. Some 11.3% went to social marketing, 10.4% went to websites, 9.8% went to search engine optimization, 9% went to affiliate channels, 8.9% went to email marketing, and 8.6% went to paid search.
Founded in 1979, Gartner is recognised as one of the world's the leading research and advisory companies with specific expertise in technology research.
The survey findings also include analysis of the immediate impact on marketing strategies as a result of COVID-19, as well as how budgets, spending and strategic priorities will evolve heading into 2021. Of those surveyed 73% expect COVID-19's short-term negative impacts to be short-lived. However, despite their positive outlook, 44% face budget cuts this year as a result of the pandemic and 11% expect their budgets to face cuts of more than 15%.
“There was an expectation by Chief Marketing Officers that COVID would be short lived, initial cuts were really a response based on cash flow.” Stated Ewan McIntyre, the Gartner analyst covering marketing leadership and management, adding that although it's great to be positive, caution heading into the second half of the year is required.
The impact of COVID-19 also placed an emphasis on digital channels especially during the early months of the global pandemic as consumers turned to online for information and entertainment. Before COVID-19, marketing budgets had been strong at the start of 2020, slightly up compared with 2019. The average budget of CMOs surveyed in North America and Europe was 11% of company revenue.
There were inevitably budget cuts as a result of the pandemic with 44% cancelling events while 41% delayed campaign launches and 37% reduced headcount. Although counter actions included 61% who launched special COVID-19 communications initiatives, 47% who deployed listening tools, and 42% who developed new scenario plans.
Looking forward, Marketing Executives said they would continue to pursue relatively conservative strategies that look at how they can fuel growth, with 79% primarily relying on existing markets. About 45% said they will fuel growth through the introduction of new products to existing markets, while 34% look to drive growth by increasing the sales of existing products to existing customers. When asked how they will approach new product development, 36% said they will do this through strategic partnerships, 32% stated creating products that are better suited for customer needs and 32% said it will be done through research and development investments. Brand strategy has become one of the top of marketing capabilities with about one-third of CMOs placing it in their top three, but personalisation lost emphasis in 2020 with only 14% now placing it as a top three priority.
Inevitably confidence about short and mid term prospects varies significantly among specific industries with only 22% in travel and hospitality believing they will see a “marked or significant positive impact.” Respondents from consumer products brands also voiced some concern about the future with only 34% believing that during the next 18 to 24 months, business will be very positive. The Gartner report concludes that, overall, there is optimism for 2021 despite numerous challenges, with nearly 60% of respondents across all industries believing business performance will return to “business-as-usual” in the next 18 to 24 months.