As we embark on the new year after a well-earned break, it's straight back to business for B2B marketers. Most budgets have been finalised and plans are now being mobilised - so here's what we think about marketing investment trends leading into 2024.
The last few years have been pretty turbulent for marketing teams. Generally, B2B marketing spending over this period has been up and down, although it's been more steady in tech. The fact that the technology industry was mostly shielded from the negative economic effects of the pandemic meant that spending cuts were minimal.
However, it led to some changeable patterns across all of the five main areas of spending:
- People
- Technology
- Agencies & freelancers
- Disbursements e.g. printing, expenses etc.
- Discretionary spend e.g. ads, events, sponsorship etc.
Over the last 2-3 years in particular, we've noticed a significant shift towards taking more things in-house and committing further investment into beefing-up internal capability.
This is to be expected. We're at the end of a marketing cycle, which focused on inbound, ABM and content. Typically, toward the end of any cycle, things mature and more people have the skills needed to execute such programmes, so it's easier to build internal teams.
As a result, external agency spending was cut back and only focused on areas of specialist expertise needed to plug capability gaps or to increase scale.
For example, external spending on martech consultancy increased significantly. This is because marketing leaders signed off on a shit load of tech, yet they didn't invest nearly enough in the people using it. They ended up with very sophisticated martech stacks, yet were only realising a small fraction of their value. So they've had to stop buying software and bring people in to optimise what they've already got. As a bit of context, marketing leaders now spend around 25% of their budget on tech - according to Gartner.
Things were a bit all over the place in 2023 though...
A year of transition
2023 started with low business confidence due to high levels of inflation, the cost-of-living crisis and a potential recession. As a result, B2B marketing budgets dropped by between 5% to 10% (source: Exclaimer) Again, the exception being in B2B tech, which remained flat.
This created a lot of headaches for marketing leaders who expanded their in-house resource over the last few years. Many were forced to trim their teams (the bulk of their costs) earlier in 2023 to reduce overheads.
However, business confidence started to return in the second half of 2023, which has led to a renewed focus on marketing. The surge of interest in AI last year also signalled the end of a marketing cycle, and the emergence of a new one. But what this new one looks like is still unclear. Nevertheless, it has meant that budgets have increased as we head into 2024.
What to expect from B2B tech marketing in 2024
2024 looks like it will be something of a turning point for B2B tech marketing, and we’re expecting some big changes and budget-related trends:
- Greater investment: as economic worries start to fade a bit, it looks as if investment in marketing is going to bounce back quite strongly. Forrester reckons that 74% of businesses are planning to increase their B2B marketing investment in 2024, and only 6% plan to scale it back
- Greater optimism but with contingencies built in: while optimism is high, caution still remains. So, we expect many marketing teams will have agreed budgets and plans for the year, but have contingencies in place in case they need to clawback some moolah to keep the CFO onside
- Increased use of AI: goes without saying that the use of AI will accelerate this year (der!), especially in transactional areas and processes where automation can deliver cost savings. This may come in tandem with a slowdown in investment in internal resources, because automation can take over some of the admin burden. Most tech platforms will introduce more AI too, further accelerating adoption as we experiment with all this new shit
- Tensions between investing in old or new tech: With AI developing so quickly, marketing leaders have big decisions to make as to whether to invest in optimising what they have or move to AI. Given the failures to demonstrate ROI through past martech investments, any new AI tech will undoubtedly face more scrutiny from the CFO
- Martech responsibilities shifting to IT: we’re expecting much closer collaboration between marketing technology and IT, with martech platforms falling more under IT’s remit. Forrester’s research found that, with more than 40% of global B2B decision-makers, martech initiatives are being supported by a mix of IT and marketing’s respective technical resources. Platforms will integrate far beyond marketing too in areas such as RevOps, field sales, customer service and so on. This will have a big impact on how budgets are managed and how spend is approved
- Demand for higher-value content: 4.6 billion pieces of content are already created every day. With the ability for generative AI to create trillions more, it means that cutting through the crap is going to get much tougher. Most AI-generated content is rehashed, formulaic and unreliable, which puts the emphasis on high-value content in order to stand out from the crowd. We expect a spend surge in research-based, carefully constructed thought leadership and digital experience content to drive engagement
- Bigger focus on brand authority: there will be an increased emphasis on the relationship between brand, subject matter expertise and demand generation. Customer familiarity and trust with a brand is more important than ever - especially in tech and consulting where standing out as a brand authority, with exceptional expertise, is key.
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In summary
Marketing is on the cusp of its next major cycle. We can all feel it, but we're just not sure how quickly it will happen. There's no doubt technology will be the main catalyst for change.
Staying ahead of tech is going to be a critical challenge for B2B marketers in 2024, especially as marketing is increasingly under the CEO's microscope.
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