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Marketing budgets climb in 2022

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Marketing budgets climb in 2022

Marketing budgets are swelling in 2022, up from the previous year, when high hopes were dashed by a pandemic that wouldn’t quit. In 2021, marketing budgets claimed 6.4% of the average company’s total revenue. This year, it’s up to 9.5%, according to the Gartner 2022 CMO Spend and Strategy Survey.

This brings the spend level, relative to revenue, up to pre-pandemic budgeting, where it held between 10.5% and 11.2% in 2018, 2019 and 2020. (Budgets were already locked in before the pandemic spread globally in 2020).


2022 MarTech replacement survey

Over the last two years, organizations have been grasping for any sign of normalcy. The lower percentage in 2021 marks a tentativeness in the timing of the recovery and, in many industries, pent up demand that might not have required big spending. Fast forward to the end of 2021, and supply chain issues and COVID subvariants added new question marks that kept spending lower in the new year.

Read next: 5 tips for building customer trust during a supply chain crisis

Digital-first. The report also looked at the digital-first shift accelerated by the pandemic. Digital channels claim 56% of budgets this year, with social media the top digital channel for spend. Paid search and digital display were a close second and third.

Why we care. Comparing marketing budget to annual revenue attempts to track two moving targets during unstable times. Some industries, not to mention individual companies, were hit unevenly. One surprise is that Tech Products, as a category, dropped all the way down to 5% of revenue in 2021, and came back to 10.1% in 2022. That was even lower than Travel and Hospitality, which dropped to 5.4% in 2021 and has come back up to 8.4% this year.

Holding more steady is Healthcare, which only dropped to 7.4% of revenue in 2021 and is back up to 9.7% Consumer products were at 8.3% of revenue in 2021 and dropped slightly this year to 8%, perhaps because of the lingering supply chain issues. Every CMO has their own reason for waiting and seeing, but that’s the pattern across the marketing world at the moment. The relative rise in spend this year shows a careful optimism as marketing teams wait for a full rebound.


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About The Author

Chris Wood draws on over 15 years of reporting experience as a B2B editor and journalist. At DMN, he served as associate editor, offering original analysis on the evolving marketing tech landscape. He has interviewed leaders in tech and policy, from Canva CEO Melanie Perkins, to former Cisco CEO John Chambers, and Vivek Kundra, appointed by Barack Obama as the country’s first federal CIO. He is especially interested in how new technologies, including voice and blockchain, are disrupting the marketing world as we know it. In 2019, he moderated a panel on “innovation theater” at Fintech Inn, in Vilnius. In addition to his marketing-focused reporting in industry trades like Robotics Trends, Modern Brewery Age and AdNation News, Wood has also written for KIRKUS, and contributes fiction, criticism and poetry to several leading book blogs. He studied English at Fairfield University, and was born in Springfield, Massachusetts. He lives in New York.

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MARKETING

Build-A-Bear using data to make itself into an all-ages brand

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Build-A-Bear using data to make itself into an all-ages brand

Build-A-Bear is remaking itself for the 25th anniversary of its founding this year. This means using its experience and its data to appeal to older customers and create stronger online connections.

“The goal that was stated for us was to diversify our brand, evolve our retail portfolio and build stronger relationships with our consumers,” said Ed Poppe, Build-A-Bear’s vice president, loyalty and performance marketing for Build-A-Bear, in a presentation at The MarTech Conference.

That’s why they launched HeartBox, an e-commerce play which the company says will let it move into “the adult-to-adult gift-giving and gift box market which has been meaningfully expanding over the past few years.” This goes along with its new Bear Cave line of “adult” bears (in this case adult means they have alcohol in hand). The brand has also expanded through partnerships with film, entertainment and streaming TV properties like Harry Potter, Pokémon, The Matrix and the Marvel series WandaVision.

These efforts are designed to give more options to customers who buy online, and increase options for engagement. This has required integrating new teams and new sources of data.

Connecting customer data and teams

“Over half of businesses now say that they expect the majority of their revenue to come from digital channels,” said Loretta Shen, senior director, product marketing, marketing cloud intelligence for Salesforce. “To meet changing consumer behavior, marketers are adopting digital channels like video, social media and digital ads across search and paid media. But it’s not just adopting these channels, but how you use them, and in particular how you use them in tandem.”

Build-A-Bear adapted to customers’ increased digital use by adding new digital experiences while also reorganizing customer data to better understand what customers want.

“We have to understand our guests at Build-A-Bear,” said Bryce Ahrens, Build-A-Bear’s senior analyst, CRM, loyalty and performance marketing. “How do they engage with our email, our websites, our advertising and, of course, how do they engage and experience our in-store environment?”

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They keep a large CRM database made up of loyalty program members, website customers, retail customers and sales prospects. Additionally, through access to the CRM, the organization is pulling together different teams: web development, analytics, marketing and also data privacy people.

These teams have to remain connected because data is coming through different systems. Build-A-Bear has a first-party data warehouse, a commerce cloud storefront, an order management system, marketing cloud, an email platform and different analytics solutions, not to mention ad platforms for campaigns.

“We need to be able to bring this information together, prioritize what we look at, and identify strategies to move quickly,” said Ahrens.

Read next: What you need to know to grow your e-commerce business

Count Your Candles

Data and digital experience come together in an ongoing Build-A-Bear effort called “Count Your Candles.”

The promotion is a special offer for customers to order a discounted bear (regularly priced at $14) that costs a dollar amount that matches their age.

The dedicated webpage for this promotion also allows customers and gift-givers to buy gift cards and become loyalty members. Additionally, there are a number of other ways that customers can celebrate birthdays, including in-store birthday parties and special birthday gift boxes that can be ordered and delivered.

These strategies came from marketers looking at the data and seeing what sparked their customers’ interests. In this case, it was birthdays.

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“We’re lucky to have a team up here who wants to jump in and help drive our business forward,” said Poppe. “But it also brings us back to where it’s important to aggregate data, identify patterns, see your opportunities, and pick your path forward.”


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Optimizing digital experiences with marketing and commerce insights from Third Door Media on Vimeo.

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About The Author

Chris Wood draws on over 15 years of reporting experience as a B2B editor and journalist. At DMN, he served as associate editor, offering original analysis on the evolving marketing tech landscape. He has interviewed leaders in tech and policy, from Canva CEO Melanie Perkins, to former Cisco CEO John Chambers, and Vivek Kundra, appointed by Barack Obama as the country’s first federal CIO. He is especially interested in how new technologies, including voice and blockchain, are disrupting the marketing world as we know it. In 2019, he moderated a panel on “innovation theater” at Fintech Inn, in Vilnius. In addition to his marketing-focused reporting in industry trades like Robotics Trends, Modern Brewery Age and AdNation News, Wood has also written for KIRKUS, and contributes fiction, criticism and poetry to several leading book blogs. He studied English at Fairfield University, and was born in Springfield, Massachusetts. He lives in New York.

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