Every year, AAM partners with Hinge to conduct the Marketing Budget Benchmark study, and Hinge presents major takeaways at the AAM Summit. If you weren’t able to make it, you’re in luck! You can still access recordings of the talk on-demand, and you can also get a copy of the full report whether you’re a member of AAM or not. In case you missed it, we wanted to share some takeaways from the 2021-2022 AAM Marketing Budget Benchmark Study. You can find a copy of the Executive Summary at the AAM Store under “Resources.”
This year’s study included participation from 140 firms from over 500 offices, encompassing 23,072 employees and $6.7 billion in revenue.
Impact from COVID-19
Hinge initially believed that COVID-19 was going to have a negative impact on all firms surveyed. However, the study revealed that only a third of firms saw a negative impact. Compare this to 45% that saw a positive impact and 22% that saw no impact from the pandemic.
For firms that saw negative impacts due to COVID-19, the cause was mostly related to activities that were hampered because of physical limitations. This included in-person meetings and events, sales/business development activities, and managing staff and company culture. For almost half of all firms surveyed who saw positive impacts from the pandemic, they saw growth from an increase in service offerings and new business, efficiency and cost savings from remote work, and advancements in technology and virtual solutions.
Most people who were surveyed found that the marketing strategy they employed during the pandemic was somewhat or very successful. Webinars, virtual events and conferences, COVID-19 resource pages, and PPP loan assistance or consulting all contributed to positive business outcomes.
Marketing Spend of High-Growth vs. Low-Growth Firms
Even though many of anticipated tightening our marketing budget belts during COVID-19, the study revealed that spending in 2020, including staff compensation, doubled from 1.5% of firm revenue to 3.0%. Like previous years, we are continuing to see high-growth firms spend more on digital and continue to outpace their slower-growing peers. Spend was highest for these firms on outside help (consultants, agencies, freelancers), memberships & dues, PPC, social media, email marketing, and technology. High-growth firms are also offering a mix of services out of the norm, including outsourced accounting, information security, and software/technology services.
Low-growth firms, by comparison, are spending the most on sponsorships, website expenses, newsletters/syndicated content, print advertising, and internal firm events and parties – many tactics and strategies that feel more traditional. They are also more likely than high-growth firms to offer wealth management, audit/assurance, and business consulting services.
One other big difference in marketing spend between high-growth and low-growth firms is staffing ratio. In high-growth firms, we are seeing an average of 1 employee per 2 staff members. When it comes to average or no growth firms, it’s 1 to 45.
If a firm looking to grow wanted to focus on some specific digital spending priorities, they should consider:
- Marketing video production
- Online advertising
- Conducting webinars
- Search engine optimization
- Internal education & training
Application of the Marketing Budget Benchmarks Study
Robert Adrian, Strategic Marketing Leader at Jones & Roth, serves as an example of how firms can make extensive use of the marketing budget benchmarks revealed in the annual study. Jones & Roth has 3 people on the digital marketing team and have seen a lot of success in recent years in marketing. Robert appreciates having a study like Hinge’s to share with CPAs because “benchmarking is one of their love languages.” The study has allowed the team to set benchmarks around compensation and FTE. It also helps them answer questions, including:
- How big should the marketing team be?
- How big should our budget be?
- Where do we have to be in terms of spend to be a high-growth firm?
Robert also appreciates the study as a way to mark and gauge against what other firms are doing. He likes to see who’s trying new things, what may help the firm stand out, and what successes they can build on. The firm derives great value out of the less anecdotal data. They can point to trends in the study and share that with leadership in a way that they know will be received more strongly than one-off examples. If there are things the firm is struggling with, it is also encouraging to see those difficulties shared and charted from other firms in the study.
One thing Robert would like to see on the roadmap is a more detailed analysis of marketing stack spend. For example, when firms are spending money on CRM, does it include automation, sales, or is it managing via MailChimp or even an Excel spreadsheet? A world of difference exists between these methods and tools.
Interview with Lee Frederiksen
To get Hinge’s perspective, we sat down to chat with Lee Frederiksen and Rowena Figueroa about the results of this year’s marketing budgeting benchmarks and what might be on the horizon.
Firm growth during COVID-19
Like many AAM members, Hinge was happy to see the large proportion of firms that had a pretty good year from a revenue growth perspective. Most of that growth was dependent on how quickly firms were able to change and adapt to an unpredictable time. Because so many things had to change, marketers who had been itchy to do things that firms were previously not ready for (like increased reliance on digital), the door opened. As mentioned above, we saw firms increase their focus on webinars, digital marketing, and catching up on some projects that had been put on hold due to day-to-day demands.
Increase in marketing budgets
They were also surprised to see the doubling of marketing budgets. Hinge saw this as an awakening, and some catch-up, to marketing strategy shared by high-growth firms. The study also showed an increase of investment in people. There was a much richer ratio of marketing people to overall folks in the firm, almost twice as many marketing professionals to all employees firm-wide. Lee sees this as an increased recognition in the importance of marketing talent at firms. Another striking finding from this year was about how high-growth firms were sourcing outside talent. To Hinge, it felt like someone lit a fuse on a rocket and accelerated changes that were already trending upwards.
Future studies roadmap
Hinge is always open and looking forward to what people want to learn more about. They’d like to dive deeper into marketing automation, marketing stack, and also advertising. Now that we’ve been seeing a move towards digital advertising and away from print, they’d like to better understand what is working best for firms in these areas.
Biggest disappointment & biggest underutilized resource
To close, we talked about the biggest disappointment for people and the biggest underutilized resource unearthed from the study.
The biggest disappointment was social media. While people rushed toward social media, results were middling. In order to get more out of social media, Lee recommended employee advocacy and employing an effective approach to using the platforms. The thing people tend to miss about social media is that they think of it as a technique you use versus a relationship you build. Lee put it this way – if you think of social media as a technique, it’s like you’re coming into a room, grabbing cheese from a tray, and leaving. That’s not how networking works. Use it as a means of communication and outreach the same way you’d use other methods.
The biggest missed opportunity Lee saw was SEO. While the push to digital was so strong, SEO is still low on the list. He’s hoping to see increased spending on SEO in future years.
What would you like to see in future studies? Want to read the full report for yourself? Visit the AAM store and access the executive summary and full report under Resources.
About Sammi Dittloff
Sammi Dittloff is the Marketing Director at Chortek LLP. Prior to Chortek LLP, Sammi spent time working in large and small agency settings, and academia.