How Marketing Leaders Respond to Budget Cuts

Introduction 

In a recent survey, HockeyStack asked 170 B2B marketers across industries how they typically respond to and make decisions in light of budget cuts. Key areas where they said they would focus on pulling back on spend are non-demand generation activities, such as external research and marketing technology, and headcount. A significant portion of leaders would cut from specific channels and initiatives: 67% of respondents said they would cut spend on events, while 83% said they’d cut spend on brand and PR.

What the results indicate to us are three major themes:

• Leaders primarily use ROI to evaluate marketing performance across all channels, but initiatives that are harder to measure in ROI terms are often the first to face budget cuts.
• Leaders recognize that modest budget cuts can improve efficiency and are increasingly turning to analytics that provide a comprehensive view of the touchpoints driving revenue. 

What can we learn from how leaders currently approach budget cuts, and what further information are they seeking to get a comprehensive view of their data prior to making these decisions?

Let’s take a closer look at each of these takeaways:

Part 1. Methodology for comparing campaign performance across channels 

Our survey found that 41% of leaders struggled to measure the effectiveness of brand initiatives and 58% struggled to measure event initiatives. Meanwhile, 50% had trouble measuring attribution of some campaigns and initiatives in general.

The primary areas leaders mentioned they cut spending in were the areas that were also difficult to measure. 67% of respondents said they would cut spend on events, while 83% said they’d cut spend on brand and PR.

In our 2024 HockeyStack Benchmark report (will be released soon), we also observed a decrease in spending in events (declining 44% in Q3) and an uptick in spending in other channels which are traditionally easier to measure the effectiveness of, such as organic search (increased 104% in Q3) and paid ads (increased 33% in Q3). 

Leaders also told us that they leveraged spreadsheets, BI tools, and reporting platforms like HockeyStack to analyze the ROI of their campaigns. While these tools help assess campaigns against each other in terms of ROI, they lack the ability to effectively assess the performance of channels such as brand activities and events against other channels — which lead to these being the main channels that leaders revert to cutting. 

Channels such as events and brand may be instrumental to driving closed won deals but may be underrepresented in first- or last-touch attribution models, leading to their performance not being measured effectively against other channels. This may lead to budgets being allocated improperly due to limitations in the available tools and use of a single touch attribution model. 

If leaders got more out of their tools and were able to analyze campaign performance beyond ROI metrics, channels that are traditionally more difficult to assess from a short-term ROI perspective may receive a fairer assessment against other channels in the event of a budget cut.

With HockeyStack, you can comprehensively compare performance across channels. HockeyStack makes it easier to measure the performance of channels which are difficult to measure from an ROI perspective (such as brand and events) using alternative metrics for measurement:

• See and track the success of brand, such as direct traffic and keyword performance.

• Gain visibility into how content drives pipeline with lift reports.

• Understand how offline activities such as events impact closed-won revenue and influence the customer journey.

Part 2. Leaders found short-term efficiency gains in modest budget cuts

Marketing leaders told us that they see modest budget cuts as a net positive, and believe they contribute to efficiencies if they target low-performing initiatives or vendors.

Of course, no attribution model is without flaws and this becomes complicated if a marketer’s tools tend to produce a one-dimensional measurement of the impact of a channel or campaign toward driving pipeline and revenue outcomes. Take an organization that’s only using a first-touch attribution model: They may observe strong performance in channels such as paid social and email marketing, but without a full picture of the contribution of other subsequent touchpoints a customer may encounter towards driving pipeline and bookings, this can lead to an over-investment in channels which are favored by the chosen attribution model.  

Some marketing leaders were concerned that short-term efficiency gains obtained through budget cuts would affect performance in subsequent quarters. In the 2024 HockeyStack Benchmark Report, we observed marketers in Q3 shifted spending toward high-conversion channels which increased closed won opportunities whilst maintaining conversion rates. It’s possible that the shift away from spending in awareness channels in the previous quarter shrank the lead pool, as the data showed higher acquisition costs (+85%) and a decline in opportunities created (-22%) in Q4.

Some marketing leaders mentioned moving in the direction of looking comprehensively at the set of touchpoints that are commonly found in buyer journeys leading to closed-won deals to counteract the limitations of single-touch attribution models.

Customer Journey reports on HockeyStack provide insights beyond first- and last-touch attribution, allowing leaders to understand the set of activities that drive conversion at each deal stage and the set of touchpoints that contribute significantly to closed-won deals.

You can also keep tabs on self-reported attribution for channels such as podcasts and word-of-mouth.

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HockeyStack also allows companies to custom-build models and compare results across each — be it first-touch, last-touch, linear, time decay, U-shaped, W-shaped, or something else entirely — for measuring campaigns, customer journeys, and hard-to-reach channels. It integrates directly with CRMs like Salesforce and Hubspot, giving marketers consistent and easy access to up-to-date data and allowing them to streamline workflows without the assistance of an operations or BI specialist. 

The budget cut process can also be simplified using Odin, HockeyStack’s AI marketing analyst. Ask Odin which campaigns to reduce budget from, and it will analyze data, provide insights, build reports and dashboards in response.

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HockeyStack makes it possible to switch between attribution models and various measurement perspectives to provide a comprehensive look at performance, and provides actionable next steps for outlining budgets that drive growth. Learn more about how HockeyStack can help you surface and action insights by booking a demo with our team.