2023 Budgeting: Invest in Digital, Content to Win B2B Business

It’s the B2B marketer’s dilemma. Business performance expectations remain high while companies are challenged by risks from inflation, economic recession, geopolitical instability, and chronic supply chain issues.

Indeed, 50% of marketers surveyed in October said they are currently tasked with achieving more than they did a year ago —with fewer resources. And the rapidly shifting economic environment is impacting 2023 strategic plans and operating budgets for companies across industries. As a result, it’s more difficult to know where to invest marketing resources and how much to spend.

Nevertheless, there are lessons learned in 2022 that show B2B marketers the way forward. They’re built upon what we learned amid all the unpredictability of 2021 and 2020 before that.

Reflecting Economic Realities With Flat Spending

We continue to move forward from the pandemic but still wrestle with its effects. Marketing budgets in 2022 reflect that. 

Thirty-three percent of B2B marketers surveyed said their budgets are lower now than in 2021; more than 21% report marketing spending is flat. Most affected are content strategy and creation and customer marketing, communications and field or event marketing.

Marketing budgets climbed from 6.4% of company revenue in 2021 to 9.5% in 2022, but still lag behind pre-pandemic spending, according to Gartner. Marketers responding to a survey by Integrate and Demand Metric expect the flatness to continue into next year:

• 33% say their marketing spending will be slightly higher
• 33% say it will be the same as 2022

The business decisions behind these number have less to do with competitive forces or changing opportunities than they do with mega-trends that B2B marketers say worry them and the rest of the executive leadership teams within their companies. Three major pressures on profitability have started to hit home, according to Gartner: persistent high inflation, scarce and expensive talent, and global supply chain risks. 

“Chief marketing officers (CMOs) must prepare for the tough decisions required to address the economic headwinds that lie ahead,” Gartner advises. 

We couldn’t agree more. But we also see more upside for B2B marketers if we base our decision-making on how we successfully adjusted course through the pandemic shutdown, shifting customer behavior, and rapidly rising prices experienced during the past two years.

Going Big on Digital

For example, we expect the strong spend in digital marketing to continue. Online channels represented 56% of 2022 marketing budgets. Social advertising ranked first among the tactics used, followed by paid search and digital display advertising.

We anticipate B2B companies will extend this multi-channel approach in 2023 for three simple reasons:

• It targets influential customer personas and individual B2B stakeholders.
• It’s highly effective at converting B2B buyers.
• It can be significantly more cost effective compared to traditional communications and event marketing strategies. 

Extending or expanding the level of digital marketing activity equips B2B marketers with ways to optimize their budgets in the face of economic uncertainty heading into 2023.

Digital marketing tools and techniques also provide the technology solutions companies need to respond to the “great resignation” of talent. Plus, they enable greater flexibility to respond when marketplace conditions and business priorities shift again in unexpected directions next year.

Helping B2B Buyers Learn With Your Content

The foundation for all digital marketing needs to be content and messaging about B2B products and services. It represents 7.8% of marketing budget allocations. 

More is spent on digital techniques such as advertising (social, search and display), video, audio, paid search and email. However, no digital marketing approach will succeed without a robust content program that answers customers detailed questions about features and benefits. 

The best digital marketing can build brand awareness. It can also link back to unique informational assets that help B2B customers better understand marketplace trends and issues or how they can evaluate options for equipment and process solutions. In 2023, B2B marketers should continue to invest in proven content formats including articles, reports, ebooks, infographics and other media including video, webinars and podcasts. 

And the best content marketing clearly explains how a B2B company’s products and expertise can enable customers to successfully complete their projects and meet their business objectives. That adds real value for B2B buyers because they’re just as pressed for time and budget as the B2B marketers trying to reach them. Going big on digital marketing and content will address both group’s needs in 2023.

Gaining Market Share With Hybrid Approaches

Inflationary pressures and predictions of a recession understandably dampen B2B companies’ enthusiasm for spending more on marketing. Historically, marketing is among the first functions whose budgets are reduced when company spending must be reduced to withstand economic downturns. 

That shouldn’t be the default position to budgeting for 2023. Here’s why: 

• Omnichannel or hybrid marketing that includes digital, on-demand techniques outperforms traditional marketing. 
• 31% of B2B companies believe omnichannel or hybrid marketing is more effective at reaching and serving customers compared to 9% before the pandemic began.
• 72% of B2B companies that utilize more channels grew their market share in 2021.

Here’s the new bottom line for 2023: Marketing strategies that emphasize digital but incorporate traditional approaches in a hybrid mix better serve B2B customers and address how they want to do business. 
And they drive business growth: 48% of market share winners utilize hybrid sales models compared to only 35% for market share losers. It just makes sense to closely align B2B marketing to what we know works for B2B sales.

Aligning Your Marketing Budget to Business Needs

Many B2B businesses have completed 2023 budget planning and have begun their fiscal year. Other companies are deep into their budgetary review cycle, so for them it might be helpful to share the following marketing budget recommendations.

Picking a percentage of gross sales and using it to develop arbitrary marketing budget allocations without accounting for your real needs is bad business. It can also leave you under- or over-funded.

With that in mind, begin by estimating a Marketing Budget Ratio (MBR). Divide your marketing investment by your total revenue, which is expressed as a percentage of gross sales to calculate your MBR. Your total marketing spend can include any of the following:

• Internal marketing resources (some even include sales)
• Outside spend with agencies, exhibition companies or other external resources
• Technology platforms
• Research
• Industry memberships
• Training

Fund Your Strategy, Not a Budgetary Rule

The MBR should serve as a guide, not a hard-and-fast budgetary rule. It provides context for developing your marketing budget so long as also you’re accounting for and aligning resources with your business strategy and changing marketplace conditions.

Avoid applying standardized percentages or duplicating existing allocations. That approach is still too prominent among many B2B companies. Instead, make sure you build your marketing plans from the ground up because so much of what we expected to happen this year changed in ways few of us saw coming. Expect that can happen again in 2023.

It’s time to move beyond current-year versus prior-year comparisons. Examine market drivers, trends and environmental changes. Re-examine the marketing strategies and tactics that enabled your B2B company to succeed during the past three turbulent years. They were hard-won lessons. They worked. If you believe they will continue to drive sales and market share in 2023, budget for them again. If not, prioritize the new initiatives that can deliver value to your business.