As the threat of recession drags on, marketers everywhere are sharing the same thought: How do we stretch our dollars?
After a tough 2022, it’s more important than ever to see returns on your investment and prove to your boss (and your boss’ boss) that your team is worth investing in. Read on to learn how to optimize your marketing spend in 2023.
What is marketing spend?
Marketing spend is the sum of all costs used to promote and advertise your business and brand. Old-school marketing spend might have included billboards and radio ads, but now it’s more likely to include digital ads, a tech stack, and email or text message marketing. To put it simply, it includes any expenses that fall under the marketing department, or your specific team within the department.
Marketing budget strategy
When it comes to strategizing how to stretch your dollars, you’ll need to account for the must-haves including paid digital advertising, SEO, design and creative services, events, sponsorships, gifting, and more.
“Across industries we’re experiencing the intersection of increased scrutiny on spend, potentially less resources, and the need to still produce highly impactful marketing experiences,” says Maddie Zingeser, Senior Director of Field Marketing at Wunderkind. “Staying laser focused on customer acquisition and meeting your audience where they are is the best way to ensure you’re aligning your budget to meet your goals.”
In 2023, traditional revenue streams aren’t cutting it. During the pandemic, cost-per-click increased up to 50% for some advertisers across Meta platforms, forcing them to look elsewhere for guaranteed revenue.
Here are our six top tips for getting the most bang for your buck this year.
How to optimize your marketing spend
1. Align your marketing goals
Step one of ensuring your marketing budget goes far is aligning with your fellow marketing leaders to ensure everyone is on the same page. Lay out common objectives and a shared vision for your marketing goals for the year ahead. Whether that’s focusing on growing your first-party data, expanding to text message marketing, or moving into a new market, be clear on the tangible goals your team can all work towards (and put budget towards).
Part of this effort includes identifying what your team is currently falling short on. Point out your weak points as a group, and think about how best to solve them. For example, many marketers are struggling with reaching their customers in the new privacy landscape (the result of the deprecation of Chrome and iOS 14), so your team may agree that 2023 will be the year to focus on growing owned customer lists.
2. Use performance marketing channels
Performance marketing refers to online campaigns where brands pay marketing companies or advertising platforms (such as Facebook, Google and Instagram) for measurable results. Most companies have a budget for performance marketing with the hopes of seeing their investments returned, which is called return on investment (ROI) or return on ad spend (ROAS).
So what are the benefits of performance marketing channels for optimizing your marketing spend? While traditional digital platforms, such as Meta, are becoming more expensive to achieve the same conversion and click-through rates, many brands are turning to solutions that give them a guaranteed return on their investment (instead of guaranteed clicks or site visits).
This guaranteed revenue is called RaaS (revenue as a service), which is elbowing its way into the SaaS market. Forget worrying about how clicks will translate to revenue. Instead, certain digital marketing companies can guarantee ROI with your marketing spend. (Hint hint: Wunderkind is one of them!)
3. Update your tech stack
Often the culprit of wasted marketing dollars is legacy SaaS tech. Given how quickly the marketing landscape is changing, marketers are somewhat wary of evolving their tech stack and risking spending with a new company. And yet, only 9% of CMOs believe that their tech greatly enables marketing performance. But it doesn’t have to be like this: Your tech should work for you and enable marketing budget optimization.
Looking ahead to the new year, go back to the drawing board and see which of your platforms are actually producing results, and what’s just there because it’s always been there. Ask yourself: Is your tech directly attributed to revenue?
4. Own your data
Privacy has been a hot topic this year, as Apple introduced iOS 14 which greatly restricts how apps can track their users, as well as the deprecation of third-party cookies coming next year, which means 87% of users won’t be addressable in the way they’ve always been. This is bad news for advertisers, as it makes it much more difficult for them to reach relevant audiences.
However, investing in email and text marketing is a brilliant way to connect with loyal customers and build your own first-party data. There’s no need to rely on third-party data when you have your own fully scalable, ever-growing lists. This allows for workarounds such as contextualized ads, which allow you to show prospects and customers relevant ads based on the content they’re looking at, rather than their previous browsing history.
5. Segment your audiences
Mass messaging won’t cut it anymore; customers will no longer stand for blanket emails and irrelevant spam. While it has its place in a marketing strategy, segmentation and personalized messaging has much stronger results. Mailchimp found that segmented email campaigns had an open rate over 14% higher than their non-segmented campaigns, and clicks were 100% higher within segmented compared to non-segmented.
You may want to segment your audience by data such as intent to purchase, demographics, and technographics, and tailor your message accordingly. While more granular targeting can be more expensive, the payoff is significantly higher.
6. Boost customer loyalty
As acquiring customers is getting more and more expensive, 2023 is going to be all about retaining existing customers. Forbes reported that 57% of consumers spend more on brands to which they are loyal, while Harvard Business Review found that ‘loyalty leaders’ grow revenue 2.5x faster than other companies in their industry.
Boost your number of repeat customers with personalized communications, discounts, and granular targeting. Personalized emails and text messages help build customer loyalty by proving that you know who your customer is, what they want, and when they want it.
Want guaranteed revenue?
This year it’ll be more important than ever to ensure you’re generating return on ad spend by optimizing your marketing budget. External factors may rear their ugly heads in marketing departments this year—so make sure you’re prepared to make the most out of the least.
Want to bring guaranteed revenue back to your marketing leaders? Wunderkind does just that. Learn more here.