For a long time, marketers had a routine: Set up for annual planning, make incremental changes, and try to do a little better than the previous year. Now, that routine has been entirely upended — the market is volatile, the labor market has been disrupted, AI is changing the game, and the pressure on budgets is higher than ever.
According to Gartner’s most recent annual CMO Spend and Strategy Survey, 71% of CMOs felt their enterprise lacked sufficient budget or resources to successfully deliver its marketing strategy this year. At the same time, 75% of marketing leaders report being asked to do more with less.
But marketing is an investment, not an expense. The only way CMOs can protect their teams, budget, and brand is by demonstrating changes in real business trends influenced by marketing — putting “points on the board” that the CFO and rest of the C-suite understand and can endorse.
With all this in mind, the only way to step into marketing budget planning for 2024 is to approach it with a transformational mindset. And the good news is, business has never been more ready to hear new ideas. (After all, 86% of CMOs say they’re under pressure to make significant changes to how marketing works to achieve sustainable results, according to the Gartner report.)
Let’s not waste this crisis; let’s lean into it. There’s more room than ever to innovate and transform marketing.
Here are three prescriptions for marketing leaders as they build out their 2024 budgets.
1. Rethink budget efficiency by outsourcing your non-core competencies to lower costs, reduce risk, and invest deeper in your core competencies.
Every CMO’s budgeting struggle usually boils down to the marketing resource paradox: We never have enough resources — time, capacity, technology, skills, or people — to generate enough impact. But we need resources to generate impact … but we need to generate impact to pay for resources.
Right now, that paradox is all the more acutely felt: Marketing budgets are down from 9.5% in 2022 to 9.1% in 2023; 75% of CMOs are under pressure to cut marketing technology (martech) spending; and most enterprises have cut at least 10% of their staff, while 92% of employers plan to downsize further in 2024.
It’s impossible to budget for 2024 without thinking transformationally about efficiency. Marketers need to innovate on the engine of how work gets done by thinking radically about what can be outsourced and what can be done in-house. If you want to be the best in the world at what you do — your core competencies like product marketing, strategy, and customer engagement — while also streamlining your non-core competencies such as execution and run work, something has to give.
Take a look at everything from workflow, productivity and unit cost economics to tech stack management and routine operational tasks. Often, the non-core competencies are what destabilize marketing teams and divert the focus from the higher-level work. By outsourcing many of these tasks, you may find that 30-50% of your work could be fulfilled in a different operating model that costs 70% less, while bringing in standardized processes, best practices, and shared knowledge.
For example, if you outsource marketing operations (MOps), you’re bringing in a team of experts with proficiency in a wide range of martech tools and platforms, vs. your one in-house person who holds all the tech stack knowledge (a huge risk if they leave your company). Or, let’s say you want to move from Hubspot to Adobe Marketo: An outsourced team can handle the setup and implementation while your in-house team stays focused on the campaign and customer engagement strategies.
When you rethink how work gets done — and who does the work — you gain flexibility and focus while lowering your costs and your risks.
2. Modernize marketing by utilizing and integrating the technology you already have to its fullest value, bringing down labor costs and increasing impact.
If we’re being asked to do more with less, then let’s start with what we already have. A recent Gartner survey reports that marketers are using just 33% of their organization’s martech capability this year, down from 42% in 2022, and only 11% of respondents increased their utilization of martech by more than 10% this year. Another study found that just 23% of martech stacks have fully integrated data that flows between systems without manual input. (Not to mention, underutilization could cost companies with a revenue size of $250 million up to $4 million.)
One of the roots of the underutilization issue is that we’ve innovated on tech so quickly but haven’t brought our people along with us, or we’ve burned them out. Some 57% of marketers report difficulty in finding martech and MOps talent with the necessary skills and knowledge, and for those that do find it, turnover is high: 72% of MOps professionals leave their company within three years. Meanwhile, the cost of hiring and retaining MOps talent has risen. Take, for instance, Marketo — hiring and retaining the necessary five dedicated in-house marketers will run you $880,000 annually. Hiring and training junior MOps professionals will run you upward of $55,000 over the first seven months, as well.
Once again, it’s time to think differently about your organization. If you’ve already invested in a best-of-breed tech stack, it’s high time to ensure all the platforms talk to each other. When you have integrated technology, you’re not just automating workflows to save time on manual input; you’re unifying and centralizing customer data so that you can gather intelligence and understand what that data is telling you. Consider reducing your tech stack by 10%, then using that saved money to then integrate the other 90%. Last year, we saw that 72% of marketers with fully integrated data witnessed more revenue growth than 53% of those not fully integrated.
And with the current state of the labor market, we need to think outside the box when it comes to talent. What if you could access martech expertise, stability, tech stack unification, troubleshooting, and increased impact at one-third of the cost of the Marketo example? By outsourcing MOps, your in-house team’s focus remains on your core competencies, while certified, already-trained professionals identify and integrate siloed martech tools, standardize processes, perform ongoing maintenance, and offer scalability — all while reducing your labor costs by about 50%.
One key reason to fully utilize your martech is to be able to measure and analyze your impact — to know which factors are contributing to the outcomes you want to achieve. When you have account-based marketing (ABM) research, campaign reporting and analysis, dashboard creation and visualization, SEO progress reports, lead-to-revenue analysis, and impact articulation, you can knit everything together to prove to your CFO that your budget is worth it. And once you can measure and quantify the tangibles, you’ll gain the freedom, trust, and investment to work on the intangibles you know are just as crucial.
3. Employ AI as a means to more marketing vs. a means to less work, ensuring your productivity gains help you reduce your total resources.
AI is a tremendous opportunity — 75% of marketers increased spending on AI initiatives in 2023 than the previous year, and 78% have integrated AI into their marketing workflows. But as CMOs are feeling the heat of “more, more, more” with far less (especially considering 25% of marketing leaders are reducing staff as a result of AI spending), we need to prioritize how AI can best help us get work done.
Yes, AI can help us produce content better, and it can help us do five times as much work with the same human — but how do we use it in an area of constraint? The value of AI is the impact of the work, not the productivity saved. It’s imperative to think about AI as a means to more marketing, not just a means to less work. We need to find use cases that will specifically create a business outcome and value.
Take ABM, for example. We know personalization leads to better conversion and a better customer experience (and 66% of B2B consumers expect personalization when buying a product or service), but it often costs time, money, and resources we don’t have — so we only personalize so far. In fact, Forrester’s 2022 State Of ABM Survey found that 26% of initiatives don’t follow any tenets of ABM best practices.
AI can help us with this constraint, allowing less people to create more personalized content more quickly, leading to marketing campaigns that will convert better and have more lift. Now, you can run five more campaigns you couldn’t otherwise, generating more results and greater impact, while reducing the burden on overworked, close-to-burnout employees.
When it comes to paring down our budgets, reexamining and honing our use of AI — using it as a strategic lever to produce more output, then measuring the value of that greater output — is the way forward. Put another way: Unless your productivity gains allow you to reduce your total resources, you didn’t actually save any time or money.
As you build out your 2024 marketing budget, think transformationally. By rethinking efficiency, martech, and AI, you’ll demonstrate that your marketing delivers on the investment, earning the buy-in to take more innovative risks.