2021 was a chaotic year. Businesses everywhere struggled to adapt to rapidly evolving changes due to pandemic restrictions and re-openings. How to service customers safely or navigate supply chain issues were top concerns in 2020 and early 2021, but the fallout extended even further. Business owners continue to struggle with creating adaptable annual budgets that allow them the flexibility to meet changing needs.
It's safe to say we have all learned a lot during the previous two years about planning in uncertain times. Flexibility has become a core part of business planning and budgeting. As we move toward 2022, it's vital to use the lessons we learned during the pandemic to inform our budgeting processes. Let's look at some actionable steps you can take to budget for the following year.
If this sounds familiar, there is a good reason. Those three words summarize 2020 and 2021. The rapid shifts, lack of consistency, and need to adapt quickly presented a massive challenge for businesses. It caused companies to shift from their exclusively in-person stores, outdoor ads, and traditional media toward a greater online focus, as evidenced by investments in their website and digital ads.
Digital spend increased to 64% in 2021, surpassing all other types of ad spend, and that number will likely increase in 2022. It is in direct response to the global shift toward eCommerce fueled by the pandemic and ongoing recovery. Even emerging economies, like Thailand, are seeing a remarkable surge, with a one-week increase in shopping app downloads up 60% in March 2020.
Although the outlook is slowly improving, 2022 brings much of the same sense of uncertainty that the following two years have had. Being flexible and adaptable should remain the core features of your marketing plan for the foreseeable future. Where budgeting used to take a more holistic, long-term approach, it now must be more agile, divided into smaller, more immediate goals. Establishing spending goals that encompass shorter periods will allow you to re-evaluate and adjust based on results and current events.
The adage "work smarter, not harder" is as appropriate as ever as we plan for 2022. The uncertainty of changing rules, restrictions, and events make strategic thinking more crucial. You must approach your marketing to increase ROI by choosing what strategies will have the most significant impact. Strategic planning means spending wisely and evaluating how your marketing efforts work together, such as using brand awareness campaigns with digital display ads, content marketing, video, OTT, or CTV, and Facebook ads, while paired with SEM for moment-of decisions.
Spending money on marketing without evaluating its efficacy is like throwing money out of the window. Would it get you a small amount of attention and possibly some goodwill? Perhaps. Is it a sound strategy? Not at all.
The analytics & data of your digital campaigns allow you to test the impact of your marketing strategy and provide actionable steps as your roadmap. The data lets you know where your marketing spend is effective and, more importantly, where it is not. This data helps you plan more effectively in the future. Analyzing performance trends can inform your investment decisions so that you can shift money from ineffective strategies to more successful ones.
Marketing has a more significant overall impact, as marketers were responsible for 44% of a company's overall revenue in 2021 compared to only 10% five years ago. Despite this trend, CMOs frequently faced marketing budget cuts. Analytics gives marketers and business managers the evidence to prevent ill-informed budget cuts by showing the executive team how marketing impacts the bottom line.
2020 showed us that anything could happen to change the world as we know it instantly, and we must be ready to adapt to unexpected changes. Through the fear and uncertainty, companies large and small showed up to lead the way, quickly pivoting to provide critical products and services in a new way. 2021 showed us the importance of staying adaptable as the world struggled to find ways to reopen and recover. The world's businesses observed and learned from each other to keep themselves and each other open for their customers.
If there is a bright side to the pandemic, it has made e-commerce a bigger priority, giving consumers worldwide the ability to get goods and services they need when they can't get out to acquire them physically. That gives digital marketing an even greater ability to impact more people. The valuable knowledge we've collectively experienced in the past two years can inform and improve your 2022 budgeting. To get the most impact from your marketing efforts, work with an experienced media partner.
Brittney Skoczylas is a Digital Marketing Consultant for Federated Digital Solutions. Her passion is helping to generate measurable results for her clients by creating customized & targeted marketing strategies that will engage a consumer wherever they are in the buying journey. Brittney’s #1 focus is to help local businesses improve their digital marketing footprint.