Chloe Washington, HubSpot
COVID-19 impacted every business across the globe. Some saw a complete shutdown. Others experienced a significant slowdown. And lucky ones saw demand for their goods and services grow.
Regardless of how a business was affected by the pandemic, there’s no doubt that it played havoc with marketing plans and budgets. As part of our recent survey, Hindsight Is 2020: Game-Changing Marketing Lessons from a Pandemic Year, we asked marketers how their budgets changed during the pandemic. Around 39% of respondents said that they had to cut heavily, while 25% increased spending. About one third (36%) said that their budgets stayed largely the same.
These findings are already significant, but it’s worth digging a little deeper. The numbers mentioned above are based on the combined responses of managers, directors, and C-level executives. If you slice the data by job title, a different picture emerges.
When asked how their marketing budgets changed during the pandemic, 31% of marketing managers said that they had to cut heavily, 42% said there was no change, and 27% said they had to spend more.
Asked the same question, only 13% of marketing directors said that they had to make heavy cuts, while 61% said there was virtually no change to marketing budgets, and 26% said they spent more.
Now we come to VPs and CMOs. What did they say? A massive 65% said they cut their budgets heavily, while only 11% said that there were no changes to their marketing budgets. Around 24% said that they actually had to spend more.
How could the answers of C-level marketers be so different from those of the managers and directors who report to them?
One possibility is the difference between how managers, directors, and CMOs decided which programs to cut from their marketing budgets. We found that 62% of CMOs asked their teams to cut a specific percentage from marketing budgets across the board. This would ensure significant cuts across the team.
Around 64% of directors cut any budget item that wasn’t already committed with a signed contract. At the manager level, most of them (46%) cut in-person events to make space in their budgets.
With a CMO looking at cuts across their marketing organization, it’s understandable how they would classify that as heavy budget cuts. However, directors and managers view marketing budgets by program or department. There are more opportunities for budgets to have remained consistent or had funds redistributed.
Although, there is another finding in our report that suggests a major challenge behind this budget confusion.
The final question we asked respondents was what they would do to prepare for a future crisis. A mere 7% said they would have a more varied marketing mix with less of a reliance on in-person events, while 13% said they would build a contingency plan that allowed them to scale down budgets and resources as needed. Exactly one third (33%) said they would attempt to gain better insight into the ongoing performance of their marketing programs.
But the biggest proportion of respondents (47%) said that they would want better visibility into their marketing budgets at all times. Moreover, this number jumped to 72% when looking only at answers from VPs and C-level executives.
Budget visibility is crucial—especially when you find yourself in the middle of a crisis that upends your usual strategies and tactics.
It’s hard to pivot plans when you don’t know the exact state of your budget. To act quickly and make decisions on the fly, marketers at every level need detailed insight into what they’ve spent, what they’ve committed, and how much they’re forecasting.
Without clear budget visibility that stretches across the entire marketing organization, you run the risk of managers making important decisions based on the wrong info. And what are the implications of the budget decisions they are making on incorrect information?
Check out our report, Hindsight Is 2020: Game-Changing Marketing Lessons from a Pandemic Year to learn more about how marketing teams are organizing themselves for 2022.