Business-to-education marketers (B2E) are overwhelmingly optimistic about the health of the education industry and their own company’s prospects for growth in the next few years, even as possible uncertainty looms for the rest of the economy.
With interest rates climbing and some economists predicting an uncertain year, it wouldn’t be surprising if B2E marketers anticipated smaller budgets for 2023. Instead, the opposite appears to be true: 43% of the respondents in our annual B2E marketing survey who have direct knowledge of their company’s marketing budget said it’s higher than last year’s budget — and nearly a quarter (24%) said their budget was up by 25% or more.
Another 42% of respondents said their marketing budget for 2023 is about the same as last year’s figures. Only 15% said their budget is lower.
The optimism that B2E marketers are feeling about their company’s prospects in 2023 could be a factor behind these budget increases.
With Significant COVID Funds Still Unspent, B2E Companies See a Bright Horizon Ahead
When we asked, “How do you feel about your company’s revenue growth in 2023,” an overwhelming 86% of respondents expressed confidence — and 42% said they were “very optimistic.” Eleven percent were neutral, and just 3% indicated concern. A key reason for this optimism could be the billions of dollars in federal pandemic relief aid still available for education — and the need to spend this money soon.
Congress allocated nearly $190 billion in aid for K–12 schools through the Elementary and Secondary School Emergency Relief (ESSER) fund. As of mid-February 2023, less than $31 billion of this money had been spent, according to a government website.
Schools have until Sept. 30, 2023, to spend the $54 billion in aid from the Coronavirus Response and Relief Supplemental Appropriations Act. They have until Sept. 30, 2024, to spend the $122 billion from the American Rescue Plan Act.
The fact that schools must spend so much COVID relief aid — or risk losing it — by fall 2024 puts B2E marketers in a good position for the next few years.
Could the “Fiscal Cliff” be More of a Molehill?
However, there is reason to be optimistic beyond this time frame as well, even though much has been made about a pending “fiscal cliff” when the stimulus funds expire.
The pandemic relief aid might be ending soon, but K–12 schools alone receive more than $60 billion in funding each year from the federal government, and the U.S. education market is expected to keep growing at a compound annual growth rate of nearly five percent (4.82%) from 2022 through 2026, according to one analysis. (See also our webinar “Show Me the Money: Education Funding Update.”)
During that time, the total value of the market likely will rise to $2.02 trillion. Even without federal pandemic money, the demand for education products and services will continue to increase.
If schools and colleges do slow their spending when the stimulus money is gone, the companies that will continue to enjoy success are the ones that invested heavily in building strong relationships with customers and prospects during the pandemic. A proven partner like CB&A, with more than 30 years of helping B2E marketers develop and execute their sales and marketing strategy, can help you make wise investments now that will pay dividends down the road.
For more key insights from our 2023 B2E marketing survey, see the full report here.