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How To Spend Your Marketing Budget in 2024: Tips & Forecasts by Promodo
March 18, 2024
10 mins
Along with Promodo experts Ksenia Mykhailenko, Media Director at Promodo, and Pavlo Kapelyushny, Head of the Customer Success Department at Promodo, we are sharing insights on how to create a marketing budget in line with digital marketing spending trends for 2024 to meet your business goals.
Essentially, to many businesses, the budgeting season began at Q.4 2023.
The best-fit approach is to allocate a budget for marketing as a percentage of target revenue. According to Gartner, marketing budgets are close to the 9% range for two years in a row compared to the lowest cap of 2021.
Budget planning related to revenue and defined targets allows you to expand your marketing capabilities with the consideration of growth goals, and create an effective sales funnel. This is a result-oriented approach while businesses are primarily focused on ROI. It also helps to create a cost-based budgeting framework.
According to the McKinsey survey, the companies that are gaining market share increase spending even in unstable times:
As they plan for 2024, CEOs and CMOs are facing new challenges:
🔴 Rising economic and geopolitical uncertainties
🔴 Rising inflation, compensation, and margin threats
🔴 Changes in the customer journey and expectations from omnichannel marketing, including the need for hybrid sales models and sophisticated eCommerce tactics
🔴 Reducing marketing technology costs while implementing increasingly complex omnichannel strategies.
It's a classic planning principle to start with the performance channels* that deliver clear and tangible results in line with the marketing goals set for your campaigns.
*Performance channels embrace contextual advertising, social media advertising, SEO, and any other digital marketing channel aimed at sales and conversions.
Among the marketing spend trends for 2024 is an increased cost for audience acquisition, also referred to customer acquisition cost (CAC). It is getting more and more expensive to buy traffic, while the cost per click is growing and competition at auctions is rising.
The acquisition will get more expensive in 2024. To tackle rising costs, companies should do their best to motivate users to make more repeat purchases. To manage repeat purchases effectively, you need to start with a proper digital valuation and accurate accounting of such interactions. The key step is in planning and allocating extra budget for Analytics purposes.
To achieve these results, you should strive for individual client adjustment and utter customization. In 2024 and on, we foremost recommend intensifying the Analytics budget. Companies should implement end-to-end analysis. This will allow the integration of online and offline data, management systems data, and web or app analytics. Pavlo Kapelyushnyi, Head of Customer Success Department at Promodo.
With its pros and cons, Google Analytics 4 allows you to customize reports generated in various configurations. The data will allow you to better understand your target audience, interaction channels, the outcomes of ad campaigns, as well as other activities that influence user behavior, repeat visits, and purchases.
With a better understanding of your customers, the way they interact with you, and the cost you pay to attract and retain them, you’ll better encourage them to make more repeat purchases.
First and foremost, you should build omnichannel communication on all platforms used by your customers. You should also leverage retention marketing tools ranging from your corporate website to Viber, social networks, chatbots, and mobile apps among others.
Omnichannel communication allows you to retain users within your platform ecosystem by motivating them to interact repeatedly. The interaction goes beyond making purchases, while it involves such actions as browsing for products, learning about new products, or taking part in promotions. Pavlo Kapelyushnyi, Head of Customer Success Department at Promodo.
Further, you should shape consumer knowledge about your brand, your values, products, and services. Leverage display advertising to accomplish these tasks, while the tool promotes first and repeat purchases through branded rather than paid (commercial) traffic.
In 2022, many brands neglected display advertising budgeting for obvious reasons. Then, the assortment was decisive - customers were buying where they deemed it was necessary. The situation started to change in 2023 while more and more companies continued to invest in their brands. In 2024, the trend will only intensify because branded traffic is always cheaper and shows higher conversions. Pavlo Kapelyushnyi Head of the Customer Success Department at Promodo.
While among the marketing budget trends for 2024 is the cost of customer acquisition (Google and Meta), it is more than reasonable to invest in your brand development. The media component solves a huge number of goals and objectives ranging from launching a new product to maintaining brand awareness during a high season.
For instance, if you enter the market during the high season, you need to maintain your share of voice so that the customer remembers you at the right time.
Creative budgeting should always accompany media budgeting. Launching a media campaign without solid creativity is impractical.
How we speak and what we say - these are the questions answered by creativity. Whom we speak to and how much - these are the questions answered by the media strategy. Pavlo Kapelyushnyi Head of the Customer Success Department at Promodo.
At this stage, you need to determine your position, goals, and objectives, namely:
🔴 What is the message of the creative campaign you’d like to deliver?
🔴 What indicators do you want to improve?
🔴 What patterns of user behavior would you like to change?
Proper answers will help you develop a creative idea and determine which digital platforms will best realize your campaign.
With a strategic focus on your best platform, you need to develop:
🔴 Ad message formats
🔴 Creatives
🔴 Banners
🔴 Videos
🔴 Integrations with influencers.
Once you have the right creative idea that meets the goals and objectives of your business, you are ready to build a media strategy in line with specific performance indicators. These include engagements, as well as performance indicators to achieve a share of voice at a certain time and in a certain location.
Properly configured analytics will allow you to understand a full user journey on your website and track the effectiveness of marketing activities across channels.
Concerning user retention, it is crucial to track all their repeated interactions with your site, namely: visits, micro-conversions, transactions, an increase in the average checkouts during a repeated transaction, and an increase in the frequency of purchases over three months, six months, and a year. We measure how purchase frequency grows per user. There are also more complex configurations that will allow you to measure how users "flow" across the categories. Namely, a user may come to you to buy a laptop or a smartphone, though may later switch to regular purchases of pet or home products. Pavlo Kapelyushnyi, Head of Customer Success Department.
Analytics allows us to systematically observe user interaction. In the context of digital media, we may study specific actions taken by users on the platform after they have seen our media message. In the context of non-digital media, we can determine the effectiveness through research, while there are no such measurements as in digital media. To do everything correctly and efficiently all the way round, it is important to constantly measure the results.
At times of uncertainty, you should consider how quickly brands fade and reemerge. Competition across niches is unstable. Despite growing predictions that most businesses will close and only the strongest will survive, the opposite is true: new players emerge and change the market. In particular, during the last crisis period, LC WAIKIKI appeared in the clothing category by having occupied a very profitable retail space and grabbed a considerable market share owing to its price positioning. Therefore, it is vital to monitor changes and strengthen your brand. Ksenia Mykhailenko, Media Director at Promodo.
Particularly in shrinking markets, those players who make non-standard and creative decisions in dynamics to capture more audience attention at a definite moment will win. So what can we do about it?
The hyping trend for 2024 is flexibility. In any planning and budgeting, you need to ensure flexibility and counterattack your competitors. You need to develop strategies, knowing that your closest rivals will follow suit while trying to grab a bigger market share. In addition to plan A, you should always have a plan B. So, do your best to reallocate the budget. Experiment with moving from clicks to clicks, including outdoor advertising and direct communication channels. Pavlo Kapelyushnyi, Head of the Customer Success Department at Promodo.
Take budget as an intention. Budget planning will help you define your intentions, whether it's to enter new markets, increase market share, or improve core metrics. Your budget should always reflect your goals.
Strive for a reasonable mix. The higher the revenue target, the more diverse your marketing mix is. Startup companies with limited budgets should carefully choose where to invest and think about 3-4 holistic campaigns. In turn, established companies should consciously add channels to diversify their reach and improve customer experience.
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