B2B marketing budget 2013 — hard times continue

Now that we’re almost one quarter into the new year, it might be time to take a look at how your B2B marketing budget 2013 will develop. No great surprises here—the situation is not much different from 2012.

The backdrop, at least in Europe, is that 2013 will clearly not be the best of years for the economy. The European Central Bank has lowered its forecast for the EU area’s GDP, now expecting a decline between 0.1 and 0.9% instead of the up to 0.3-per cent increase it said as recently as in December 2012.

What this means for marketers is that the plight they’ve been grappling with for the entire last year will continue.

A blog post written by Kaon Interactive lists the top three B2B marketing problems:

  1. Marketing budgets continue to decline
  2. Complex solutions are difficult to explain
  3. Inconsistency in the message

Although Kaon operates in the United States while I’m in northern Europe, and although the blog post is now several months old, their conclusions fit well into what I’m seeing in the European market today. Add to this the rather dismal economic outlook for the next nine months, and you’ll see why marketing in every B2B should get its act together quickly.

Marketing budgets continue to decline

Reading about the future of marketing in Finland, Sweden and Estonia—to start from the small economies in the farthest corner of Europe—it is clear that most companies are planning to either freeze their 2013 marketing communication investment at 2012 levels, or decrease it.

For the UK, Marketing Week says,

But while company targets may be increasing, marketers will not have more resources to help turn aims into reality. A worrying 60 per cent of those marketers expecting increased company targets in the year ahead report that their marketing budgets will either remain static or be cut.

In Germany, Mindshare’s CEO says,

Das Konjunktur-Barometer des deutschen Werbemarktes steht für 2013 bestenfalls auf Stagnation. (The economic barometer of the German advertising market for 2013 is stagnating at best.)

Even on the basis of this small sample, it looks like marketers are continuously compelled to do more with less regardless of the size of their market.

Complex solutions are difficult to explain

Particularly in B2B contexts, a company’s offering in most cases is not as straightforward as it might be in a B2C market. That’s why the benefits of doing business with you will often get buried under a convoluted effort to explain what it is you’re selling.

Another common problem is that the more complex a company’s offering is, the more marketing messages seem to focus on what “we” do, instead of explaining what “you” could benefit. This focus on “we” is one of the most detrimental factors affecting the efficiency of B2B marketing, as I’ve said a number of times before, even questioning whether marketers are a breed alienated from real life. No wonder CEOs are disappointed with marketing’s contribution to creating revenue.

What is most alarming is that the non-existing contribution of marketing efforts to the bottom line will inevitably strengthen the C-suite’s belief that marketing is nothing but an expense. In bad times, expenses are always put under a magnifying glass, and it doesn’t require a lot of imagination to see that more marketing budget cuts are just round the corner. That’s a huge disservice to any company’s success, despite many authoritative opinions that you absolutely should not decrease your marketing spend in a slow economy.

Inconsistency in the message

If, as the Kaon post tells us, a company finds that sales is using 64 different messages explaining the company’s offering, it’s obvious marketing isn’t doing its job.

All marketing must use the company’s strategic goals as its ultimate guideline. Marketing must always be systematic, and there is no other way to achieve that than knowing your target audiences, their needs and their purchasing paths on the one hand, and the real benefits your offering will bring on the other.

Only then will it be possible to create customised marketing messages that, despite the different needs of the different target audiences, systematically display the core value your company offers.

Stay alive—destroy silos, align goals

Now is high time for companies to take a hard look at their different functions. Everything a company does should point to its defined business destination. If no goals are defined, no wonder important spending decisions are made based on a gut feeling or last year’s numbers, totally forgetting the “where do we want to be a year from now”. In the worst case, even contradicting other departments’ work or creating unnecessary friction between them.

Marketing is too important to be left in the hands of marketers. Every single marketing action must be derived from the company strategy, and marketing messages must support the strategic goals. As different as the messages may look on the surface.

That’s why top management must make it clear across the organisation where we are heading, and the different functions must align their operations with that goal. Used correctly, marketing is a muscle car, but even a muscle car won’t do any good if it’s just left idling.

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