Businesses of all sizes scrambled to reorganize their marketing budgets because of the turmoil caused by the 2020 global pandemic. CMOs, marketing directors, and small business owners adjusted their spending priorities in all categories, from technology to their hired contractors.

A recent report from Gartner cites that in 2020, 80% of budgets were allocated for digital channels as companies shifted away from in-person events.

Now, as we see signs pointing towards a slow but steady recovery across most industries, marketers are cautiously planning for growth. Let’s take a look at where marketers plan to invest their dollars online and off as we ease out of the pandemic.

Budgets Were Affected Across Most Sectors

Demand fell as the pandemic tightened its hold on almost every industry. Hospitality, travel, and retail suffered some of the biggest losses as consumers stayed home. For more traditionally stable sectors, many businesses enacted hiring freezes, layoffs, and furloughs.

Marketers and creative contractors also experienced significant losses. Over a third of businesses utilizing external agencies brought these services in-house to cut costs.

CMOs list these as the top services that they normally outsourced but shifted gears due to economic uncertainty:

– Social media marketing
– Creative Production/Content Marketing
– Video/Podcast/Photography Production
– Creative Concepting

Even though many businesses did this in 2020, not all experienced a positive benefit. Marketers were stretched to their limits as they were given heavier workloads and fewer resources.

Marketing Budgets Still Favor Technology

There was one sector that didn’t experience a downturn at all during the pandemic—marketing technology. As part of their marketing budget plan, over 70% of businesses expect to invest slightly to significantly more in customer data, mobile marketing, and digital commerce platforms.

But this breaks down further into digital and traditional marketing channels as the recovery continues.

Digital Advertising
Companies spent over a quarter of their budgets on this channel. There’s no sign of this slowing down as they increase their spending for display and video ads on platforms like Amazon and YouTube.

Owned Channels
At the beginning of the pandemic, people flocked online to get news updates and connect with friends and family. As a result, businesses concentrated—and spent almost 60% of their budgets—on social marketing, SEO, and mobile.

Event Advertising
In the past year, most events were either canceled, postponed, or completely moved online. Normally, face to face events get a smaller share of the pie, with less than 10% of marketers allocating their budgets towards it. However, marketers are optimistic about what relaxed restrictions and the widespread use of vaccines will mean for in-person conferences and events.

Optimism About the Future

For B2C marketers, they’re feeling incredibly excited about what’s to come. The current data shows that e-commerce is about to experience a boom, which may, unfortunately, hit brick-and-mortar retailers in their pocketbooks.

Analysts predict that online purchases from new and moderate shoppers will increase by 169% after the pandemic is over. Much of this is attributed to consumers turning towards home delivery, curbside pickup, and online storefronts.

Businesses are ready to capitalize on this stat as B2C marketers intend to invest more of their budgets in digital advertising and paid search.

On the flip side, B2B marketers remain cautious and anticipate a slower recovery as different sectors rebound from the past year. But for those who are prepared to pour money into their marketing budgets, email and paid search will take up a big portion of it.

Smaller Companies Play it Safe

Small businesses were hit especially hard in 2020, and many were quick to reduce their marketing budgets like their larger, corporate cousins. But social media continued to be a revenue driver for the small businesses. Over 40% of local businesses depended on social media to get the message out about their services.

As word spread online about restaurants and local businesses struggling to keep their doors open, social proved to be a sound investment.

But it’s unclear how much smaller companies will increase their budgets post-pandemic as 47% of them spend less than $10,000 on digital marketing. However, it is known that the small percentage of companies spending more than this will invest in technology, data, and other digital initiatives.

Preparing for a Resurgence

We’ve all had to change how we communicate not only as individuals but as businesses. Moving forward, companies have to figure out which channels make sense to invest in and which technology and people to utlize.

We’re optimistic that those who survived the economic impact of the pandemic will continue building better businesses while strengthening relationships with their customers.