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Growth marketing is shrinking.
That’s one of the takeaways from digital agency Dept’s third annual report on the topic, which found a 40% decline in marketers who are using growth marketing strategies this year compared to last among the 450 senior managers or above who were surveyed. Dept defines growth marketing as “the blend” of performance and brand strategies.
The drop could be attributed to a few factors, including economic conditions that have marketers investing more in bottom-funnels channels and strategies, according to CSO for Growth Sam Huston.
“They’ve made very purposeful choices about not investing in [growth] now,” he told Marketing Brew. They’re “only going to invest in what we know works for the time being until we see what the future holds.”
The report broke down how marketers are currently approaching three “growth areas.”
Strategy and planning: Almost half (45%) of the marketers surveyed are investing in strategy and planning, down from 68% last year. Some see it as a “luxury” that they’re not currently willing to spend on, Huston said.
The report notes that brands are more likely to cut things like audience research and media planning in order to keep running ads during tough economic times. While experts encourage brands to keep spending on ads during a recession, those that sacrifice too much in other areas become “vulnerable in the short term by relying on assumptions or outdated data about your potential buyer’s journey,” according to Dept.
Data and analytics: Speaking of data, that’s another area where marketers are pulling back. About half (48%) of respondents are spending on analytics, down from 70% in 2022.
“I think everybody realizes how important it is,” Huston said. “There's just a lack of trust in the models that they use. For so long we were talking about multi-touch attribution. That’s kind of been disproven in the marketplace. Marketing mix modeling has stepped up as the model, but to do MMM right, it can be expensive.”
The rise of AI and depreciation of cookies also has some marketers waiting to see what new models emerge before they invest, he said.
Creative: Spend on the creative process dipped this year, but not as drastically, with 46% of respondents investing, compared to 50% last year. Huston said there are fewer costs associated with creative than some of the other areas in the report, which could explain the limited drop.
“What marketers have done is found less expensive ways to create more assets,” he said. “It's less of a cut here, it’s more of finding efficiencies in the system, because they realize that this is one place that's incredibly powerful from a performance perspective.”