What to spend on marketing in 2020

As 2020 gets into its stride, several prominent trends inform on the future of marketing. Total marketing spending will increase by around 9% this year, as methods used to deploy marketing investment will undergo a seismic shift. The trends described in this White Paper are based on the 2019 CMO Survey published by Duke University, Deloitte and the American Marketing Association.

Movement towards improving productivity

There is movement from developing new products (as one would expect in an up-cycle) toward improving sales and marketing productivity. In fact, growth in customer relationship management (CRM) systems is outpacing spending on branding and new product development.

B2C service companies are outspending product companies, especially in digital media. A focus on return on marketing investment (ROMI) and analytics coincides with an uptick in online conversion. Yet marketers are also struggling with proving return on certain activities such as social media and social awareness.

Doubling down

Perhaps sensing potential weakness in the economy ahead, companies are focusing on their core markets (market penetration). Companies may be less apt to make big bets on new products and more likely to build their existing markets. High-growth companies are dramatically outspending low-growth companies as they try to buy share, as demonstrated by the numbers in the table below.

GROWTH STRATEGY B2B PRODUCT B2B SERVICES B2C PRODUCT B2C SERVICES
Market penetration 55.6% 52.4% 50.3% 60.4%
Product/service development 21.5% 20.3% 21.9% 24.6%
Market development 14.9% 16.0% 15.9% 10.2%
Diversification 8.0% 11.3% 12.0% 4.8%

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