Seasonal Advice for Allocating Marketing Spend in 2023by@verz
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Seasonal Advice for Allocating Marketing Spend in 2023

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Marketers might not have crystal balls, but they do have plenty of indicators that show upper-funnel brand tactics – and especially building community trust and loyalty through word-of-mouth marketing – should be well budgeted for next year.
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Vivienne Elizabeth Rudcenko-Zwerenz HackerNoon profile picture

Tis the season to make predictions that help marketing professionals plan next year’s budgets. After an anything but predictable year, however, no amount of trend forecasts will turn marketers into fortune tellers. Yet at a time when CFOs and senior finance leaders are reducing budgets to fight inflation marketers are still expected to magically make smaller budgets go further.

Marketers must release their inner sleuths, collecting clues to reveal the tactics and technologies that can best weather the economic downturn and still bring results amidst shifting market conditions, rising inflation, economic volatility and weakened consumer purchasing power.

Well good tidings we bring, because the clues do fit together and they all point to upper-funnel brand marketing becoming a critical investment next year. Marketing tactics that build awareness, trust and perceived value segue well from web2 to web3, where building strong brands and communities is critical. 

All the puzzle pieces show that now is the time for the marketing community to start shifting collective mindset away from purely transactional to more interpersonal and engaged customer relationships, as brands prepare to adapt to major technological shifts in digital marketing and as web3 becomes increasingly more mainstream in the years to come.

Disclaimer: I am a marketer at WOM Protocol, BULLZ and YEAY, so I have a vested interest in the products mentioned below.

Invest in Brand Marketing 

In Analytics Partners’ “The Marketer’s Guide to Survive (Even Thrive) in 2023” report, which was published in late November this year, marketers are advised to ensure that at least half of their marketing spend goes towards brand and upper-funnel marketing activities next year.

Analytics Partners analyzed hundreds of billions in marketing spend to identify that brand messaging outperforms performance messaging 80 per cent of the time, and that it is a better long-term strategy for building customer loyalty.

The report advises marketers to reallocate at least 50 percent of overall marketing spend away from lower-funnel tactics, such as pay-per-click and price cutting, to prioritize upper-funnel tactics, such as video and social content.

This is a logical approach given that when market conditions are tough customers typically become more selective, which makes customer acquisition more expensive with greater competition. Instead, the report states, marketers should focus on connecting with customers on a more emotional level, seeing conversion as the end-game once loyalty and advocacy have been established.

While such tactics might be 25 percent less effective in the short term, they are 60 per cent more effective in the long term and this is true in all market conditions.

Positive word-of-mouth endorsement is a potent form of brand marketing, because people trust people over adverts. When brands successfully create an emotional connection with consumers they are 3x more likely to generate word of mouth marketing and 7 in 10 consumers trust the opinions of influencers as much as their real-life friends.

Useful word-of-mouth martech tools include WP Social Ninja, which imports social reviews from social platforms to WordPress sites, as do Smash Balloon and Spotlight.

Meanwhile, recommendations app YEAY enables influencers as well as regular content creators to promote brands and products through short-form video in order to earn rewards based on the performance of their content.

Brands can then use the WOM Campaign Manager to turn this content into measurable campaigns, while gaining access to web recorder and viewer plugins that enable brands to capture and feature word-of-mouth content directly on their web pages.

Prepare for Web3

In many ways web2 marketing is learning from web3, where the focus is necessarily higher up the funnel. In his recent article marketing aficionado, Robert Cole, outlined the core difference between web2 and web3 marketing: “In web3 you can fork product, which means the competitive advantage has changed to branding and community.”

In other words, while web2 marketing has largely been focused on demand generation and customer acquisition, web3 projects, which live and die by the strength of their brand, have focused on growing communities to gain and maintain attention.

The reason why, Cole explains, is that in an open source and decentralized world where products can easily be copied, selling a strong product is not enough to gain competitive advantage. Only projects with perceived value and passionate evangelists willing to spread the word will survive and thrive.

In web3 community growth is not about accumulating followers, but rather bringing together people with common identities and giving them “skin in the game” – when an entire community can co-profit from a project’s success, as is the case with tokens such as NFTs, that community becomes a powerful word-of-mouth marketing force.

As Lunar Research puts it in its 2022 guide to web3 community growth, brands must realize that their communities are at once customers and company ambassadors, and build a suitable marketing stack to grow and nurture dedicated and integral communities. With more than 70 web3 teams and projects featured in Safary’s 2022 analysis of the web3 community growth tools landscape, there is no shortage of new tools to support this.

These vary from CRM software, such as Kazm, which provides features, such as token gating and embeddable forms to build the most valuable member-based communities, through to messaging tools, think Dispatch, which creates a direct connection between a business and a customer’s wallet to send on-brand messages. These could be anything from a trivia game, through to a reward.

Incentives and rewards are another essential arm of community-building and web3 incentive platforms in this space include the BULLZ Challenge Launchpad, which enables influencers to mint and airdrop NFTs to communities in exchange for participation in fun challenges. Web3 influencers can also monetize content on the "TikTok of Crypto" BULLZ mobile app, which recently launched as an additional web platform to improve accessibility to web3 for creators.

Dappback, meanwhile, enables brands to establish web3 loyalty programs enabling people to earn crypto rewards for completing tasks. 

Community, Community, Community

Marketers might not have crystal balls, but they do have plenty of indicators that show upper-funnel brand tactics – and especially building community trust and loyalty through word-of-mouth marketing – should be well budgeted for next year.

Going down this path and away from purely transactional tactics, such as customer acquisition, will also lead marketers comfortably into web3 as brands inevitably turn to their marketing teams to help them enter this emerging space.