Only 9% of Companies Have a Clearly Defined Budget for Next Year
Only 9% of brands have a clearly defined budget for 2021. Seven months into the coronavirus pandemic, and brands are still grappling with uncertainty—so it shouldn’t come as a shock that the 2021 business budgeting readiness is low. Yet, the trend that continues amidst all of the uncertainty is the rise of digital advertising offset with reductions in traditional advertising spend. Traditional media spend is predicted to decline by over 30%, while total U.S. ad spend is predicted to decline by 8% as the pandemic weighs down overall budgets. (For more information on this topic, take a look at this survey done by IAB, here: https://www.iab.com/wp-content/uploads/2020/06/IAB-BuySide_Ad_Spend__3_FINAL.pdf).
Since companies are highly uncertain on the lasting effects of the pandemic, it is no surprise the percentage of brands with a defined advertising budget for 2021 is so low. However, agile brands that use agile marketing measurement analytics can use pandemic-period data to run multiple what-if scenarios to “war game” different budget allocations. By running different scenarios and spend assumptions, agile brands can do two important things: (1) narrow down a set of options and budgets that have the highest confidence of success, and (2) have ready-made plans available to rapidly adapt and deploy as pandemic-driven business conditions evolve.
To do this, agile brands need marketing measurement models that are tuned specifically for the pandemic window and do not rely on historical data that is no longer accurate (traditional marketing mix models have these issues in spades—for more information, read OptiMine’s “The Pandemic Has Made Traditional Marketing Measurement Obsolete” guide, here: https://optimine.com/wp-content/uploads/2020/08/OptiMine-eBook-Pandemic-has-Made-Traditional-Marketing-Measurement-Obsolete.pdf).
OptiMine is currently helping its clients with these types of agile-based planning efforts, with the goal of driving rapid-response budgeting flexibility and the ability to re-run scenarios on the fly using the latest market conditions. This is the key to successfully navigating the pandemic and recovery periods: agility, flexibility, and speed. Interested in learning more about how OptiMine can help YOU plan your marketing budget and so much more? Contact us today at https://optimine.com/contact/.