When economic uncertainty looms, one of the first places your sponsors look to make cuts is their marketing budgets. Whether that’s smart or short-sighted is pretty much beside the point. Marketing budget belt-tightening has become ritualized behavior for most companies during every economic downturn, and it’s going to impact the flow of sponsorship dollars into your association, if it hasn’t already.
What does this mean for associations? Simple. The competition for your sponsors’ shrinking marketing budgets is about to get even fiercer.
Roughly 60% of B2B marketers report that their 2023 marketing budgets have been cut or are staying flat, according to Demand Metric’s The State of Marketing Budgets. And nearly two-thirds say they are expected to accomplish the same or better results with fewer resources.
Keep in mind that, not only are sponsor and advertiser budgets shrinking, the competitive field for these budgets continues to expand. When the pandemic made in-person events and other association sponsorship stalwarts either impossible or less appealing, advertisers shifted more of their budgets to other channels. And those sponsorship dollars still haven’t found their way back to association coffers. In fact, nearly half of associations report a year-over-year decrease in net income, which is even more concerning when you consider that the reported decrease is off of a year when income was also down.
While this may seem bleak, there is some good news for associations. Really good news, in fact. Marketers need your members to grow their businesses. This is true regardless of the economic climate we find ourselves in. But how you provide sponsors and advertisers with access to your members may need to evolve because sponsors are looking for more than just brand visibility; they are seeking opportunities to engage with your members in new ways to add value to their businesses.
To meet the evolving needs of your sponsors and advertisers, it's time to rethink your sponsorship programs. And to create programs more closely aligned with your sponsors’ needs, you first need to understand what their challenges are. In this article, we offer an overview of what the data tells us your sponsors and advertisers are looking for.
Our team spent days combing through troves of recent research on sponsors’ needs and three common challenges emerged from all of the data we sifted through.
If you’re hoping for an economic turnaround any time soon, you’re likely to be disappointed, says the Congressional Budget Office. The CBO forecasts a sluggish economy through at least the end of the year, weighed down by historically high inflation and an uptick in unemployment.
Both Demand Metric and Sapio Research are forecasting cuts to marketing budgets this year as fears of a recession intensify. Sapio’s International Business Barometer reports that the marketing cuts will affect more than half of businesses.
Other research corroborates this. A recent World Federation of Advertisers study reports that three-quarters of respondents “agreed strongly” or “agreed” that their 2023 marketing budgets were under heavy scrutiny, requiring them not only to do more with less, but to demonstrate clear ROI from their marketing spend.
The Digital Marketing Institute finds that the No. 1 challenge facing marketing decision-makers at the executive level is “delivering greater ROI on the marketing budget," meaning each marketing dollar spent must be justified.
Irrespective of the economic climate we find ourselves in, businesses still need to differentiate themselves. According to Forrester, competition among B2B companies is fiercer than ever. An effective way to stand out from the crowd is through thought leadership, a highly effective method suppliers can use to influence decision-makers, particularly in a down economy.
A company’s thought leadership can take many forms. In our digital lives, thought leadership often manifests itself through a company’s content efforts. Edelman defines thought leadership as “content that offers expertise, guidance, or a unique point of view on a topic or in a field.” Thought-leadership content is different than sales or product-orient content. Rather than being self-promotional, it focuses more on the audience's needs and interests.
According to Edelman and LinkedIn’s 2022 B2B Thought Leadership Impact Report (PDF), 61% of nearly 3,500 global B2B decision-makers surveyed believe an organization’s thought leadership can be moderately or a lot more effective at demonstrating the potential value of its products/services compared to traditional product-oriented marketing.
Further, fully half of B2B C-suite executives say that high-quality thought leadership has more impact on their purchase decision-making during economic downturns.
Thought leadership content is effective because it not only helps B2B marketers establish their credibility, demonstrate their expertise, and earn trust, it educates a company’s prospective buyers along the way because it focuses more on the customer’s needs. And an educated prospective customer is much more likely to become an actual customer.
According to Gartner’s research on the B2B buyer’s journey, customers who had access to high-quality information related to a problem or challenge they were experiencing were 2.8 times more likely to experience a high degree of purchase ease and three times more likely to buy a bigger deal with less regret.
According to Hubspot, the No. 1 challenge for marketers in 2023 is lead generation. Why? When marketing budgets tighten up, it’s easier for marketers to draw a straight line between leads generated and ROI.
And, according to a report from HIPB2B and Ascend2, generating quality leads is a bigger challenge than generating enough leads. Gartner confirms that less than half of incoming leads (44%) are ultimately passed to the sales team because the majority don’t fit a company’s “ideal customer profile.”
And not only do your sponsors and advertisers want high-quality leads, but they need a turnkey way to generate them because, like many of us, they are also being tasked with doing more with less.
The Digital Marketing Institute finds that 70% of marketers experienced budget reductions over the past two years. That not only means fewer advertising dollars to spend, but smaller marketing teams responsible for the same or higher levels of production.
Gartner’s research on marketing budgets confirms that companies are grappling with serious resource challenges, with 61% of CMOs reporting that their teams lack the capabilities required to deliver their marketing strategies.
As trusted industry leaders with engaged memberships, associations are in a favorable position to compete for marketers’ advertising dollars. The key, however, will be to optimize sponsorship programs that align as closely as possible with your sponsors’ needs.
The same programs that associations have relied upon for decades will not suffice. The current climate calls for innovation. As the data reveals, sponsors need programs that will:
Further, sponsors and advertisers need programs that will achieve all of the above without requiring a strain on their own resources to accomplish their objectives.
There are a variety of non-dues revenue programs that associations can deploy to more effectively compete for marketers’ shrinking budgets. At Lead Marvels, we partner with Associations to create interactive online Resource Libraries.
An online Resource Library, sometimes called a “Knowledge Hub” or “Resource Center,” is hosted and fully managed by Lead Marvels, and it is highly targeted to sponsors’ needs:
Not only does our Resource Library platform target your sponsors’ needs, but it can be a substantial driver of non-dues revenue. In fact, more than 100 different associations have partnered with us to launch our Resource Library platform on their website. The Association for Corporate Counsel (ACC), for example, generated a six-figure, recurring non-dues revenue stream using our resource Library platform.
There is never any cost to our association partners, and the program requires no new investment in technology or staff.
Learn more about how our Resource Library Program works in our latest white paper, Growing Non-Dues Revenue With An Online Resource Library, or schedule a no-obligation demo with a member of our team.