07 Jul The End Of Marketing?
The End Of Marketing?
With 55% of consumers learning about new brands on social media alone (Sproutsocial), through posts likely crafted by expert marketeers, we think it still holds a prominent place in any business strategy. However, last week Marketing Week and the BBC reported that the government are pushing brands to cut back on their advertising activity in order to pass on the discounts to customers.
Not only does it seem strange considering a lot of businesses are struggling to recoup finances lost during Covid, but as a marketeer writing this, it’s reminiscent of struggling organisations looking to cut costs who almost always start with the marketing department which is seen as an ‘extra’ rather than an ‘essential’.
Costs can admittedly vary in terms of marketing spend depending on the industry you’re in, but in the US Deloitte carried out a survey which calculated how much revenue was spent on marketing, the results are below. In the UK the amount spent by organisations also varies but several sources state that between 2-20% of revenue on average goes towards marketing. The report also showed that 38% of organisations named marketing as their biggest contributor to revenue growth. Would these companies consider marketing to be an ‘extra’?
Here’s a quick breakdown of several SaaS companies from Vital who prioritise marketing:
- MindBody (FY 2017) – 39% of revenue invested in marketing, 31% revenue growth year-over-year
- Salesforce (FY 2018) – 46% of revenue invested in sales and marketing, 25% revenue growth year-over-year
- Tableau (FY 2018) – 51% of revenue invested in sales and marketing, 32% revenue growth year-over-year
- Manhattan Associates (FY 2018) – 8% of revenue invested in sales and marketing, 1.6% revenue decrease year-over-year
- Bottomline Technologies (FY 2018) – 21.8% of revenue invested in sales and marketing, 12.8% revenue growth year-over-year
As Marketing Week correctly state, “it’s well documented that brands which invest in a recession emerge stronger”, this only makes the whole suggestion of removing marketing even more baffling. As many things with the UK government, perhaps we should take this with a pinch of salt too, but for those considering it, have a good think about whether removing the main channel of revenue growth is the best idea.
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