Great news! You can put your worries about a recession negatively impacting advertising spending on hold. According to The CMO Survey by Deloitte, Duke and AMA, marketing budget as a percentage of company revenue has risen from 8.7% in September to 10.9%! Also, social advertising is about to experience major growth. Here’s what you need to know.
Social Advertising Poised to Capture More of the Marketing Budget
Current Marketing Budgets
According to The CMO Survey, marketing budgets currently account for:
- 12.3% of overall budgets
- 10.9% of company revenues
So, there are still plenty of ad dollars to go around, despite worries of a recession. Additionally, overall marketing spend is expected to rise over the next year.
Small vs. Large Businesses
Businesses of all sizes are switching their marketing budgets to reflect their revenue instead of a flat overall budget. However, small businesses (those with fewer than 50 employees) are more likely to base their marketing budget on their revenues.
Traditional Ad Spend is Declining
Traditional ad spending hit an all-time high in February of 2022. However, its victory was short lived. Now, it’s once again in decline. According to The CMO Survey, the trend of negative growth among traditional advertising media has been ongoing for a decade. Small and large businesses in particular plan on decreasing their traditional ad spending in the future. Digital is set to take its place, particularly social advertising.
According to The CMO Report, brands are currently spending an average of 17% of their marketing budgets on social advertising. By this time next year, that percentage will grow to 20.3%. And within the next five years, it will continue to grow until it reaches an average of 26.4% of marketing budgets. Here’s the breakdown of the percentages of their marketing budgets businesses in each economic sector plan on dedicating to social advertising within the next five years:
- B2C services businesses: 30.5%
- B2B product businesses: 29.1%
- B2B product businesses: 25.2%
- B2C services businesses: 23.5%
How Businesses are Using Social
The top uses of social advertising, according to The CMO Study, are:
- Brand awareness and building: 92.9% of businesses use social for this purpose
- Promotions: 71.6%
- Customer acquisition: 69.2%
- New product and service introductions: 64%
- Customer retention: 59.7%
How does your client’s current social strategy compare? It may be time to make some changes in order to stay competitive.
Along with social advertising, mobile advertising spend is also expected to shoot up within the next five years. According to The CMO Survey, mobile ads now receive an average of 19% of brands’ marketing budgets. Next year, that will rise to 23.3%. Within the next five years, it will continue to grow until it reaches an average of 34.5%. So, if your client is looking for another media type to add to a multi-channel campaign based on social advertising, mobile is a great choice.
Your Client and Social
Social advertising encompasses A LOT. So, your client may have a lot of questions about expanding their social ad strategy. Are their target audiences even that receptive to social ads? Which platforms should your client advertise on? You can find all that information and more by looking up your client’s target audience’s profile on AudienceSCAN on AdMall by SalesFuel. With that information at your disposal, you can help them craft a social media ad campaign that will blow any of their competitors’ out of the water. But hurry, their competition may already be boosting their social ad spending and crafting a more intensive social ad campaign already. Don’t let them get too far ahead.
Photo by Airam Dato-on