As most industries slowly recover from the catastrophic damages the pandemic has brought upon them, marketing starts to thrive once again as a key asset of every successful business model.
This 6-week-long average marketing budget by industry research is the first part of a larger project which aims to find out how deeply marketing as a sector mutated with the pandemic. The lockdown and the lack of physical means of communication allowed for an accelerated shift towards a more digital approach, and means of discussion gravitated towards new technologies such as Zoom meetings and Slack, which quickly became a staple in the business world almost overnight.
And yet, marketing seemed to have turned upside down what we knew about brand loyalty and experience: knowing your customer inside and out became quintessential for a strong sales approach, with brands capable of communicating precisely and resonating with the clients’ current events dominating their respective industries.
This switch towards a more personal approach led to an increased demand for Digital Marketing services, and jobs such as SEO specialists and PPC experts are increasingly in demand.
This reflects clearly on our questionnaire result.
Average Marketing Budgets by Industry
Over 60% of companies, from healthcare to construction, expect their marketing budget to increase in 2022, with the most confident industry being real estate scoring a 92% likelihood of budget increases.
On the other hand, 23% of companies are expecting their marketing budget to decrease, and 17% won’t be changing it.
Increased demand in marketing is bound to develop new strategies that will aid businesses of all sizes. Nowadays, most agencies employ multiple streams of communication to reach a broader audience, such as social media, content, and email marketing. This is, of course, pertinent to the size of the business.
Our research, fortunately, covered an expansive list of subjects, with the respondents ranging from small businesses to corporations with over 250 employees. This means that the average budget is somewhere around £50,000 per company, with a low of £10,000 or less and a high of £5 million or more.
We will be discussing the results for specific industries in detail down below. Please bear in mind that this article will discuss and compare only the most dominant industries in the United Kingdom, whereas the original questionnaire covers twenty-five sectors.
Average Marketing Budgets: Retail industry
Retail trade was one of the industries that the pandemic has struck the most.
Those who were hit the worst were retailers offering nonessential goods such as apparel, jewellery, home decor, and entertainment since they were not classified as essential shops by the government and thus were forced to close down. Some major UK brands were even brought to bankruptcy by these regulations.
Notable examples of this unfortunate event include Peacocks, Oliver Sweeney, Go Outdoors, and Oak Furnitureland.
Nonetheless, retail remains the most dominant industry in the United Kingdom, accounting for £400 billion in revenue and one-third of all consumer spending. Retail also accounted for about 12% of all responses to the questionnaire. Of all responses, 60% are medium-sized businesses (between 50 and 249 employees) and 28% are small-size businesses (49 employees or less).
The results speak clearly: the sector is heading towards a fast recovery
Marketing and retail are entering a symbiotic relationship, with the latter emboldened by the easing restrictions and the public’s overall adaptation to the “new-normal” led retail to make some strong moves: 87.5% of interviewees declared that they will be allocating an average of 35% of their budget into marketing as we go into 22. As 71% report this number as an increase in marketing efforts, this figure also signifies a decrease in the budget for 25% of retail businesses.
Although there could be a variety of factors that caused this confidence, it is safe to speculate that retailers that adapted to Covid thanks to enticing business models that support consumers whilst complying with regulations had had a major, positive impact on the life span of said business.
New strategies such as click and collect, drive-thru, and adapting to diminished resources with staff cuts and other cost-cutting deployments will allow this industry to evolve in a way that will change the significance of the brick and mortar store as we know it.
Traditional retail is slowly obsolete, and those who can offer the best online options are those the customers will successfully turn to when purchasing something. In one of our previous research articles, we discussed the rapid rise to dominance of the digital model and how retailers that were capable of selling online managed to stay afloat amid the pandemic, while others unable to do so struggled to survive.
Average Marketing Budgets: Legal and Finance industries
As one of the core industries in the UK, the legal and finance sector has been thriving in 2021, with an overall positive sentiment and the public’s newfound interest in trading and investing as a means to make capital during the lockdown.
Despite the major losses of 2020, there are very few ways Covid had any direct implications to financial services during 2021.
Our research discovered that nearly 80% of financial companies are heading towards an increase in budget versus 15% that will do the opposite. However, 46% of these declared that they will only allocate 20% or less in marketing nonetheless.
Should they be spending more, or are marketing services becoming less effective with the legal and financial industry?
Fortunately for us, that is not the case.
The evolution of finance during 2019, 2020 and 2021
In the past few years, marketing has transitioned from simply being a way to make a profit to a growing, evolving organism that aims to affect people’s entire experience from the initial approach all the way beyond the final purchase.
And this couldn’t be more obvious with the financial sector, where the focus has switched away from traditional digital marketing and instead swayed towards improving the user’s experience.
Let’s look at the technologies that went incorporated in nearly every bank, for example.
Covid accelerated some megatrends that favour international banking companies, such as the work from home movement and the implementation of contactless technologies.
Contactless technologies such as voice command and digital payments are both examples that can be used brilliantly in both marketing and finance.
Not only does it allow an advantageous, swift payment system, but it also allows marketers to provide a better customer experience: At this point, who doesn’t prefer tapping their debit card on the pin reader rather than using cash?
Therefore, despite the relatively low amounts of money finance is allocating into marketing, it would be wrong to think that they aren’t heavily invested into it.
It is safe to speculate that banking will be one of the best performing industries during 2022 thanks to a strong 2021 and these improved marketing techniques that aim to communicate directly with the customer.
Average Marketing Budgets: Travel industry
Travel is an industry that is severely lagging in terms of both revenue and budget allocation. Never in history has this industry struggled so much as it did with the Covid restrictions and regulation compliances, and most of these effectively halted their services altogether.
The sector that accounted for 7% of the global GBP in 2019 now shrunk by about half according to Unctad, impacting the livelihood of over 200 million people worldwide that relied on the industry for jobs of all kinds, from aeroplanes pilots to wildlife parks.
The immense impact of Covid on the industry goes beyond affecting flight companies and hotels: 16% of museums found themselves near bankruptcy, and the cuts on staff led to a rise in poaching and looting at wildlife reserves across the world, according to Unwto.
The travel and tourism sector has found itself in a much more precarious spot than the other industries the questionnaire has interviewed, with well over 40% of the interviewees stating that their marketing budget is going to decrease in 2022, making it one of the only two participant industries that strongly leaned towards budget cuts, the other being hospitality.
Overall, the industry is expected to take a long time to recover the $1.3 trillion lost to the pandemic. The reimposition of travel restrictions globally won’t certainly help.
The majority of experts state that tourism will take a minimum of 5 years to return to pre-pandemic levels, making it a difficult time to enter the industry or confidently invest in it.
Average Marketing Budgets: Marketing and Media industries
Marketing as a sector found itself in an interesting position during the pandemic. The Work From Home (WFH) movement rapidly gained footing and popularity, leading talent around the world to switch their career towards roles that could be performed remotely.
IT, Marketing and finance all followed a similar rise in popularity because of this, and the accessibility of marketing led to a rapid growth in freelancing options and revenue.
Digital marketing agencies such as ourselves have reported sharp confidence in budget allocation, with their marketing budget composing, on average, about 50% of their revenue.
It is valuable to state that growth isn’t without consequences or setbacks. 65% of marketers state that shifting priorities is their top challenge, and 74% feel like traditional marketing tools and field marketing strategies have become the most ineffective and adverse to result-driven outcomes.
Digital marketing has increased sharply, and as the world recovers from Covid, it is safe to speculate that it will become one of the industries that will change the most. As new products and software to facilitate work from home come out, communication will improve, leading to better results and even better talent to join the ranks of agencies across the world.
Recommended article: 12 Digital Marketing trends you can’t ignore in 2022
What will the future hold, as we slowly return to normality? We state that the overall increase in budget allocation is a sign that we are heading towards a more competitive environment that will evolve much more rapidly than before.
Competitiveness breeds innovation: as we enter the post-pandemic world, companies of all sizes should prepare by taking advantage of forward-thinking enterprises that can evolve as rapidly as the industries they are in.