Dive Brief:
- As retailers face economic challenges from inflation, chief marketing officers are allocating more money on social media as well as offline advertising, according to research from Gartner shared with Retail Dive.
- The survey of 405 marketing decision makers across the globe between February and April showed that retail CMOs are spending 11.2% of their budgets on social advertising, more than any other channel and ahead of search ads. Sixty-three percent of retail respondents said they increased offline co-op and partner ad spend, demonstrating confidence for in-store shopping, according to Gartner.
- Overall marketing budgets have increased to 9.1% of company revenue since they were slashed to 6.3% in 2021, but they are not back to pre-pandemic levels (10.4%) based on Gartner’s 2019 survey.
Dive Insight:
Retail CMOs have seen a rough few years, even before the impacts of the pandemic set in.
In the first couple months of 2020, six retailers had named new CMOs or laid off existing ones in a reshuffling of the role — but the position had been at risk for years before that. The pandemic introduced yet more uncertainty, which influenced marketers across the industry to play it safe in 2021.
Gartner’s latest survey shows that marketing budgets are back on the rise, but the market research company suggests keeping lessons from pandemic cuts in mind given the current economic environment. Increasing attention to efficiency at an operational level and in marketing channels might help retailers stay agile.
Social marketing is a key focus for many retailers right now. Gartner suggests that retail CMOs invest in analytics capabilities for online and offline since shopping journeys often involve both channels.
Social commerce is growing rapidly, with some research suggesting it will grow 3 times as fast as e-commerce. Brands are turning to platforms like Instagram, TikTok and Youtube to grab larger audiences and develop stronger brand awareness, per Gartner. Youth retailer Pacsun recently hit 2 million followers on TikTok as part of a larger social media strategy. Twitter, Pinterest and Snapchat have all expanded commerce functionality over the past few months.
