for-ads-results">in-2025-800x450.png" class="attachment-large size-large wp-post-image" alt="Why smart marketers should front-load spending in 2025" style="margin-bottom: 15px" />I’ve seen many predictions about what marketers should expect, anticipate or work for in 2025. The continued rise of AI, other technologies that might come to fruition, how to use CDPs, and whether marketers are even using CDPs — some things are new, but many of them are things we’ve been predicting for years.
As I said in my earlier post here on MarTech, I’m not a predictions guy. I don’t do the “New year, new you” thing. I’m 53. There’s no new me, just updated versions.
I would rather examine what’s happening in our industry and find ways marketers can take advantage of changes or fend off disadvantages. This column will tackle that last point this time.
From cutbacks to investment
In my last post, I stressed how important it is for marketers to have a backup plan. This plan should help them deal with possible downturns. These downturns can come from issues in the country, changes within the company or other unexpected challenges. Such challenges can threaten yearly goals or targets. These conditions are also set in conversations at the top levels of your company.
Here’s some insight into the questions frequently arising in conversations with C-level executives. Let’s call it my Top 10 list for January 2025.*
- What’s our measure of success and what do we do with low-performing channels?
- With the new Congress, do we have a path to a national approach to privacy here in the U.S.? If we copy GDPR, what does that do to our company practices?
- What impact will tariffs have on our company, and how do we think consumers will respond? How do we communicate that?
- How would tariffs affect our supply chain? Should we start looking for goods from non-tariff countries?
- How will Meta’s plan to end fact-checking affect the platform’s efficacy and our spend there? What should our next move be?
- If the Department of Justice eases some government restrictions, how will that affect us?
- Are we embracing AI in the right way and are we aligned on our strategy with our martech stack?
- What’s our message to consumers, in this age of deep political division, who want to know our values?
- Do we invest more in brick-and-mortar and real-world experiences with products or continue to invest online?
- We changed vendors post-COVID. Did the innovation we want materialize? Do we need to renew those contracts or go through RFP again?
*Although my list targets U.S. marketers, many of these items will affect marketers in nations that do significant business with American markets.
Questions like these also arose in 2024. That curiosity prompted companies to pause or cut back spending. This uncertainty led many companies to shore up their defenses instead of investing in bold new directions. Although this year’s questions are different, could history repeat itself in 2025 with another pullback on investment?
I believe not, or at least not right away. We’re seeing a glimmer of good news in that what is likely pent-up demand from last year’s stagnation is softening up the market for 2025.
That doesn’t mean marketers can sit back. Instead, they should spend as much of their budgets as they can in the first six months of the year. Any money earmarked for new programs or technology, acquisition, conferences or educational events — if you can, move it into the first half of 2025.
As I mentioned, any increase in spending is likely from companies catching up after a year of cutbacks and cautious budgeting. While this may solve short-term issues, it’s not a sustainable approach, especially if competitors ramp up their spending.
The need to stay competitive will likely drive further investment in change — but that’s not where the story ends.
Dig deeper: 10 martech predictions of what won’t happen in 2025
From investment to cutbacks?
This year, we’ll likely see heavy investment in change, which is good news. But how long will that investment last? The six-month period I discussed earlier merely forecasts what I see happening in the next 12 months.
Let’s look at three factors that should influence company spending this year and why investing in the first half is important. Uncertainty in the second half could lead companies to pause or cut back on their budgets.
1. Market instability
Markets hate instability, whether caused by inflation, interest rates, a volatile stock market, lower consumer spending or unanswered questions. It brings uncertainty and prompts companies to conserve spending wherever they can.
My list is just a sample of executives’ conversations as they try to read the tea leaves while also planning 18 to 24 months out on products, expansion, objectives and goals.
C-level executives will watch for market instability, determining their actions, including spending decisions.
Consider one finding in a recent study by Statista:
“During a September 2024 survey among chief marketing officers (CMOs) from for-profit companies in the United States, respondents reported that, on average, 7.7 percent of their employers’ revenues were allocated to marketing activities. That was the lowest average share for an autumn survey edition since August 2018.”
That decline is problematic for companies needing better technology to compete and rise above competitors’ noise.
As an educated marketer, you should pay attention to the same news your execs are tracking. Watch stats to help you understand where your market is going. This way, you won’t be caught unaware if things change, and you will be better able to prioritize spending if you suspect cutbacks might be coming.
2. Political change
National elections or changes in government create instability. That’s not a comment on the winners or losers of the recent U.S. elections. It’s just the reality.
New administrations bring new cabinet members and staff with different policies and priorities. Candidates have to try to make good on their campaign promises. That means changes, which, in turn, create instability because people are uncertain whether those changes will help or hurt in the long term.
Many people are watching to see what effects those changes will have globally and locally, extending beyond the stock market. C-level executives are among them as they develop business policies, strategies and forecasting over the next 12 months and beyond.
What we often forget about execs in their walnut-paneled corner offices is that their jobs aren’t just to sell things and make money for their companies. Their role also is to protect those companies and employees. Political instability is an unknown factor that can influence market instability and become something these executives need to manage around to protect their companies.
Political instability also affects consumer spending, as I’ll show below.
3. Consumer security
This is the same as consumer spending because the two generally go hand in hand. When consumers are worried about their paychecks, they stop spending.
We did see an increase in discretionary spending in the U.S. in 2024. Consumer discretionary spending intentions rose for a fifth consecutive month in December 2024 but remain weaker compared with 2021 levels, per a Deloitte study. Also, both higher- and lower-income earners reported better finances, although the percentage increase for lower earners was stagnant.
When we look across the board, consumer spending trickled up to every company. Executives often consider whether market or political instability affects the consumer’s confidence to spend money.
Earlier this year, MarTech reported on a study that found political views affected voters’ shopping and media habits:
“Half of Independents say their purchases and media consumption decisions align with their political views — whatever they are — and 58% say that they are inclined to purchase from organizations that actively support causes they support. This group is also the least likely to purchase from small, local businesses.”
These concerns can make updating your email segmentation strategy more urgent. Instead of just “right message/right audience,” it can also help you forecast spending. Can you answer these questions?
- Are you segmenting your lists and identifying your most loyal customers?
- Are you segmenting them out enough to see those macro and micro swings?
- Are you ahead of the curve in determining whether spending for your program is increasing or decreasing?
These are in your direct line of sight as a marketer. They help you forecast what will happen for your company and allow you to maintain or adjust your plan for the near or long term.
Consumer spending provides a broad view of the economy and consumer security across industries. However, you must focus on your specific vertical, consumer, client and company.
Having an effective segmentation plan and reporting capability will be critical, as you will be the one determining whether or not these factors will affect your goals and your marketing efforts.
Dig deeper: Stop defending your marketing budget — start proving its value
Wrapping up: Use it before you lose it
Back to the six-month plan I mentioned: We have about six months before we start seeing the impact of market, political and consumer spending instability, if any.
Right now, the market is “stable-ish.” The U.S. economic recovery post-COVID is the envy of the world. Prices seem relatively high, but they are coming back to earth. However, executives are looking at what could happen over the next 12+ months and will try to hedge against whatever could happen.
As I said earlier, I expect heavy investment in the first six months as companies aim to use up their budgets before the executive memo arrives, calling for a pause or cuts in spending, particularly on ancillary operations like travel, new programs and hiring. For marketers, you should accelerate the investments you didn’t make last year or continue the investments you began.
Everything will be ducky if we reach the six-month mark and everybody’s still fine. But, remember, we had a gap in company spending last year. Pausing or cutting spending two years in a row isn’t sustainable for any company. If you had to regroup last year because your company cut your budget, spend the money now to get back on track.
This will not be a land grab — you still need to show the value and return on your investment — but you will protect your email program from falling even farther behind. You are the CEO of email and protecting the channel is one of your responsibilities as a team leader. Let’s do this!
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