2023 Budgets: Where Does Tech PR/Marketing Fit In?

By Cara Sloman, CEO, Force4 Technology Communications   

The tech market is entering a new phase characterized by caution as investors warn against maintaining burn rates from 2021 and the Fed has raised interest rates. Many in our network of B2B tech marketing professionals and business leaders have recently been telling us their companies are imposing company-wide budget cuts and implementing hiring freezes. While some forecast an easing of these structures in Q1, others believe that these conditions will persist through Q2 or even Q3. With all of this in play, where does marketing fit in the budget as we look ahead to 2023?  

Let’s talk “burn rate”  

In a market downturn, nearly every business leader feels the need to conserve their budget. Investors are concerned about taking on risks and losing money. They caution their portfolio companies to reduce their burn rate to preserve cash for the long term. This encourages a short-term view. 

Burn rate is a crucial indicator for start-ups, since it not only reveals how much money is pouring into the company despite running with a negative cash flow, but also how probable it is that venture capitalists or seed investors will add additional funding. Businesses that are profitable and tightly control their cash burn rate will draw more investment than those that are losing money fast and have no chance of making any prospective profits or of growing. 

Burn rate, like fire itself, must be effectively controlled; otherwise, your start-up will burn too hot before failing, just like the almost 30% of small businesses that fail due to cash flow issues. And much like an improperly managed burn rate, slashing marketing budgets can make you fail more quickly. 

The impact of cutting the marketing budget 

When facing a market downturn, some businesses might choose to curb their communications plan until circumstances improve. Marketing budgets often get cut first because they are viewed as non-essential costs.  

While some budget cuts are unavoidable, curbing brand awareness campaigns will not result in a long-term market-leading position. Customers require solutions right now. Buying cycles lengthen during economic downturns, but what is invested now in developing trust and visibility will yield fruit in time. Strong technology public relations and marketing strategies are core to building corporate visibility. 

A company’s chances of acquiring new customers diminish when it eliminates its marketing spend entirely. Eliminating the marketing budget could also result in fewer repeat customers. Most customer communication ends when a company’s marketing efforts end. Because of this, customers begin to question the stability of the company and how much they care about customer retention, and they will gradually stop caring about the brand. 

Where does marketing fit in 2023 budgets? 

Marketing during a downturn will never be simple, mainly because it frequently requires defying instincts and industry traditions. Customers’ behavior varies significantly as a result of these changes in their demands and circumstances, some of which may be traumatic. You must walk with your customers through this new phase, changing your message and possibly even your value proposition. In the long run, businesses that are ready to serve customers in a downturn keep a lot of the new customers they bring in and deepen their relationships with existing ones.  

Instead of automatically hacking back marketing, now is the moment to evaluate your spending patterns. Gather and analyze all the information based on clear marketing goals to help curve your budget. Diving deeper into the data may reveal new insights and upsides.  

Your entire decision-making process for budget allocation should be made around data. With this information, you can see what’s working and what isn’t. With fewer resources available, it’s time to hone the marketing channels that are underperforming based on real data and not just guesswork. So how do you determine what’s working and what has to go? 

Start by gathering and analyzing key performance indicators such as conversion rates, cost per acquisition and ROI. Which areas are meeting your key business objectives? Measure your bar for success against areas that meet or exceed objectives versus those that offer little to no return. 

The data gleaned from these sources can help you optimize your content, readjust your customer journey and funnel stages, and reveal which marketing tactics are making the greatest impact. Then you’ll know where to focus your budget. 

Attaining long-term, measurable business benefits  

With so many avenues available to reach key consumers, it’s more crucial than ever to gauge the success of technology marketing and PR investments. Measurement tools and procedures are improving as the media landscape becomes more digitally oriented and linked to business goals. Smart marketers can use these techniques to gauge the effectiveness of their initiatives for the company as a whole: 

  • Identify the key performance indicators (KPIs): The major outcomes of your PR program must be quantifiable in order to truly know if it is succeeding. This may involve the percentage rise in web traffic or sales, the quantity of leads or conversions, and so forth. Setting baselines is a vital step that is occasionally forgotten. You won’t have a thorough and accurate insight into progress if you don’t have a starting point to compare your results to. 
  • Identify the right website analytics: Google Analytics is a potent tool for tracking, fine-tuning and demonstrating the result of B2B PR efforts on website activity. Metrics such as session activity, referral traffic volume, goal conversion rates and traffic sources are frequently included in website analytics. These metrics can be directly linked to PR activities if programs are set up correctly. 
  • Use integrated reporting tools: With so many communication channels now available, thorough measurement has become crucial. It’s impossible to determine where marketing activities are succeeding without it. Use the tools at your disposal to monitor and assess the success of your work. For the best outcomes, this will demonstrate which tasks and distribution methods are generating ROI and which ones need to be adjusted or abandoned. 

Advocate for marketing as a brand-saver 

Yes, it’s crucial to pay attention to the bottom line during a market contraction. It may necessitate some budget concessions but cutting spending and stopping brand-awareness campaigns won’t put you in the lead. These fear-based reactions risk damaging a brand’s reputation as well as its relationships with customers and prospects. Customers require solutions immediately and are trying to find reliable sources. Although buying cycles lengthen during recessions, the work done now to establish credibility and visibility will pay off in the long run.