Disconnect between marketers’ description of strategy and budget reality, study finds
Despite the majority of marketing investment now being put into performance channels, less than a fifth of marketers would describe their organisation’s strategy as performance led.
Almost three-fifths of marketing budget is being invested behind performance channels and media, despite less than a fifth of marketers describing themselves as “performance-led”.
According to research from Adobe and MMA Global, which surveyed 389 senior marketing professionals globally, 57% of marketing budget goes towards performance marketing. This reality represented in the data presents almost a reversal of Les Binet and Peter Field’s famous 60:40 rule, which guides brands that the optimum split for marketing budget is 60% on brand-building activities and 40% on sales activation.
There has also been an increased emphasis on performance marketing in recent times, the research suggests. Over the last year, almost a quarter (23%) of marketers have increased the proportion of their budget they spend on performance activities, while 70% remained stable. Just 7% reported a decrease.
The majority of marketing budgets are being invested into performance, yet the research suggests that most marketers would prefer not to class their organisation as being led by performance. Indeed, just 19% of marketers surveyed describe their organisation as “performance-led”.
The preferred way for marketers to describe their business’s overall marketing approach is “balance/hybrid”, with 42% of respondents classing their organisation as such. “CX-led” is the second-most popular, with over a quarter (28%) of marketers stating this is their business’s marketing approach.
Interestingly, very few respondents say that their business’s marketing approach is “brand-led”, with just 15% describing their organisation as such.Over half of marketers say campaigns ‘too focused’ on performance
The research suggests that around four in five marketers intend to balance their strategic planning between long-term brand equity and short-term performance, however, this is clearly not panning out in budgeting, with almost three-fifths of spend going towards sales activation.
This disconnect could be down to planning cycles, suggests the report from Adobe and MMA Global. Its research suggests that 50% of marketers conduct budget reviews based on performance data quarterly, while over one in four (26%) conduct them monthly. Meanwhile, 6% conduct these reviews weekly and 4% do it “in real time”. The remaining 14% conduct reviews annually.
“These behaviours risk causing overcorrections based on limited information given the measurement and attribution challenges,” the report authors write.
The other factor identified by the report authors as driving a culture of short-termism is what influences budgetary decisions. Over a third (36%) of marketers identify C-suite priorities/business goals as “the most important” factor impacting budget allocation.
The priorities of business leadership trumps customer trends and behaviours (27%), market conditions and competitive activity (23%) and innovation and martech advancements (15%) as the most important factor in influencing budget decisions.
According to the authors of the report, this focus on what the C-suite wants could mean that objectives of success are more focused on quarterly results and KPIs as opposed to long-term thinking.
Indeed, among companies that self-describe their marketing approach as performance-led, marketers are more likely (43%) to say C-suite priorities are the most important consideration over budget versus the general sample (35%).
