BY Kathy Crosett
What percent of revenue will the average business spend on marketing this year? The latest CMO survey from Duke’s Fuqua School of Business says it will be 9%. Some verticals will spend more than others, as highlighted in our State of Media Sales survey. In addition, new complexities are leading businesses to outsource for expertise in digital marketing.
The 35th edition of the CMO survey includes responses from over 300 respondents representing businesses of all sizes from multiple sectors. Significant findings include a new emphasis on digital marketing, artificial intelligence and a focus on retaining clients.
Businesses see opportunity in digital marketing
The percentage of businesses saying that digital marketing has highly impacted performance in the last year increased significantly. Over 70% of companies rate it as a 5 or above on a scale of 1–7. Digital marketing is seen as increasingly complex and requires technical skill that existing employees may not have.
Marketers already outsource one-third of these activities and that is expected to increase going forward. B2C companies reported a higher rate of outsourcing their digital marketing needs. Offering your expertise in digital marketing means sharing your success stories with your clients.
Many media sales reps have used AdMall data to help sell their proposed digital campaigns and deliver success to their accounts. You can start the journey by checking AdMall’s Digital Audit. This tool shows how well a business’ digital outreach is connecting with the target audience.
How will businesses allocate their ad spending?
Your accounts have plans about how they’ll allocate increases by type of marketing spend in the next 12 months. Here’s how the details break out:
- Brand building 5.9%
- New product introductions 5.9%
- Customer relationships 3.5%
- New service introductions 3.2%
- Customer experience 3.0%
It’s noteworthy than B2C product companies will boost their new product introductions spending by 9.3%. Meanwhile, B2B services companies anticipate increasing their brand building marketing spend by 8.3% this year.
Much of the spending increase will go to digital. While overall marketing spend may only increase 7.6% in the coming year, the portion allocated to digital is expected to grow by around 10.4%.
Outlook for traditional media
The typical marketing budget for traditional advertising will drop another 1.5% this year. This follows a 0.3% drop last year. Energy is one of the few verticals that plan an increase in traditional ad spending. Verticals with the biggest planned drops in traditional advertising include transportation and consumer packaged goods.
Social media advertising plans
Meanwhile, another digital media format, social media will likely account for 14.3% of the marketing budget in 2026. Last year, it amounted to 11.3%.
How advertisers are using AI in marketing
Your accounts are using AI in at least 22.4% of marketing activities. Top uses range from content creation to content personalization. Nearly half of businesses are using AI-powered automation tools to streamline their marketing processes.
When you pitch your services to these businesses, highlight your AI knowledge along with your expertise in digital marketing.
How optimistic are marketers?
Businesses are feeling economic pressure. Their optimism has dropped from 62.2 to 56.8 on a scale of 1 to 100 in the past year.
They’re allocating around 9% of their revenue to marketing expenses this year. This number hasn’t been as low since August 2021.
However, some businesses are spending more than average and will make good targets for digital media sellers. Businesses that are devoting a higher percentage of revenue to marketing activities include online selling companies, smaller businesses and B2C product companies.
Researchers also found that businesses have a plan for what to do when profits aren’t as high as expected. 45.4% will cut their marketing expenses.
Verticals with opportunity for media sellers
Some businesses plan to spend more than average on marketing. These verticals include consumer services and education industries.
Media sellers should take note. Our State of Media Sales survey indicates that 70% media sales managers are very or slightly optimistic about home improvement services. And 45% say the same about sales from the education vertical.
How long do marketing expenditures influence prospects
Business leaders were also asked how long their marketing expenditures impacted customers. Around 10% said six months. But 21.8% said the impact lasts up to a year. At that point, it will be time to develop or update campaigns.
Top goals for marketing this year include getting better ROI (78.2%) and speeding up marketing actions (65.5%). With a tool like AdMall and its related audience profiles, you can show your accounts your expertise in digital media.
Image by Vlada Karpovich on Pexels.
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