With rising media costs, evolving consumer behaviors, and increased competition, you really have to go big or go home. So, the next time you're told your marketing budget is being cut, counter with facts and ask for more. Here’s why.
Marketing expenses are projected to grow by 4.7% this year, a significant jump from the 2.5% growth seen last year. A key driver of this increase is the anticipated growth in social media spending, expected to rise from 11% to 12.2% this year and to 16.3% over the next five years.
With this logic and understanding, brand marketing is imperative; this is case one for why budgets should increase, or at a minimum, stay where they are.
Increased marketing budgets are likely to be funneled into several key areas:
Source: The CMO Survey
Media costs through 2024, are expected to surge across various advertising platforms. Digital ad spending in particular, according to eMarketer’s April Report, is projected to hit $302 billion, marking a 7% increase from previous estimates.
In 2025, this "media inflation" will challenge advertisers even further since they will be simultaneously tasked with finding ways to keep pace with evolving consumer behavior.
Advertisers are increasingly required to adapt to changing consumer behaviors by leveraging multiple channels and sophisticated advertising strategies. Delivering the right message at the right time and place has become more complex, necessitating higher levels of spending to maintain effective communication with target audiences.
Premium ad placements are also contributing to increased costs. High-impact ad units and premium environments, such as large-format video ads or interactive digital out-of-home (DOOH) displays, command significantly higher CPMs compared to standard units. These placements are favored by advertisers looking to stand out in a crowded market but come at a premium price.
The competition for advertising space has never been fiercer. Forbes reports substantial CPM increases across major platforms, with Facebook seeing an 89% rise, TikTok 92%, and Snapchat 64%. TikTok, in particular, has experienced a year-over-year revenue increase of 26%, underscoring its growing dominance in the digital ad space.
Changes in data privacy, specifically Apple's App Tracking Transparency (ATT) feature, have also impacted advertising effectiveness. With ATT limiting data collection on iPhone users, marketers now face the challenge of reaching their audiences with less precise targeting, requiring additional spending to maintain campaign effectiveness.
As digital advertising evolves, different programmatic channels are experiencing varied cost trends. Understanding these trends is crucial for optimizing your media budget and ensuring efficient allocation of resources. Here's a breakdown of current cost trends across key programmatic channels:
With rising media costs and evolving consumer behavior, optimizing your media budget is more important than ever. Implementing effective strategies can help you maximize your investment and ensure your marketing efforts yield the best possible results. Here are key strategies to consider:
By implementing these strategies, you can better manage your increased media budget, ensuring that your spending is aligned with both current market conditions and future growth opportunities. This approach not only maximizes the efficiency of your budget but also enhances your overall marketing effectiveness.
Focus on data-driven decision-making, target audience segmentation, and channel optimization. Invest in sophisticated CRM systems, data analysis tools, and customer journey mapping to enhance personalization and improve customer experiences. This will help ensure your marketing spend is both effective and efficient, driving better results in a competitive market.
In an era of rising media costs and shifting consumer behavior, maintaining or increasing your marketing budget is not just a strategy—it's a necessity. The market is evolving rapidly, with new challenges and opportunities arising across various programmatic channels. By understanding cost trends, adapting to global media inflation, and implementing targeted budget optimization strategies, you can ensure that your marketing efforts remain effective and competitive. Investing wisely in both established and emerging channels will not only maximize your return on investment but also position your brand for sustained growth and success in the constantly changing digital advertising environment. Embracing these strategies will help brands stay ahead of the curve because in the budget battleground, scaling up is the only path forward.
Sources: Clearbit, 2022; Forbes, 2022; eMarketer 2023; CMO Survey; eMarketer2; Hubspot, 2024