Digital marketing budgets are on the rise. According to Gartner, they’re expected to increase by nearly 10 percent this year, and have been steadily growing year-over-year for some time. The reason? Marketing now owns the sales cycle. While buyers were once satisfied learning the ins and outs of a product or space from a salesperson, buyers today prefer to self-educate. They lean heavily on content, studies and unbiased advice from peers to evaluate options and decide where to spend.
In response to this shift in consumer behavior, marketers have doubled down on customer experience investments. Content development, marketing automation and hyper-personalization all play a central role in delivering memorable experiences that educate and advise prospects on how to solve for their unique problem or need. The costs associated with impressing this info-hungry consumer are not trivial, however, and marketing budgets have swelled as a result.
Negotiating the size of a marketing budget is one of the most important conversations a senior marketing officer will have all year. Arguably, it’s the conversation. To make sure you’re well prepared the next time you find yourself in this make-or-break discussion, consider the following tips:
1. Track everything.
If you attend a tradeshow, be sure that every business card is collected and meaningful conversation recorded. If you host a webinar, track registrants, attendees and anyone who asked a question. If a prospect is exposed to a remarketing campaign and directed to your eBook download, make sure their path-to-download is tracked and at what cost. Today, every program deployed can, and should, be measured. Recording costs, conversion rates and other critical program elements is key to understanding cost per lead, cost per opportunity, cost per customer won and, ultimately, the contribution to revenue.
In short, get a handle on your funnel and make sure that every marketing touch, from advertising to emails to events to social, is attributed to the correct leads and accounts. There’s no reason not to, and all of this data is priceless when it comes to tying marketing activity to revenue. If need be, hire a marketing operations person to oversee analysis and reporting or invest in MarTech that will do the analysis for you. With today’s tracking capabilities and innovations in marketing technology, no marketing dollar should be unaccounted for.
2. Build a solid forecast.
Don’t leave this up to sales. Step up to the plate and outline precisely how your marketing strategy backs into company pipeline and revenue goals, mapping initiatives to contributions along the entire path to purchase. Based on a combination historical performance data (see step 1) and predicted outcomes for new investments, demonstrate how and why your plan will work. From there, you’ll have numbers to back up your need for budget to support actual sales, not just traffic, leads and other vanity numbers.
3. Be transparent and report often.
In weekly meetings, report back on how marketing activity has contributed to pipeline and revenue goals. If you missed your forecasts, let the team know, but come into that conversation understanding why you missed your numbers and with a plan to correct. Not every program will work, of course, so be prepared to analyze your failures to make sure you're learning from them and adjusting quickly.
If marketing only reports on the latest infographic, website enhancements or ad campaign, the rest of the company will view you as little more than an extension of the design team. To avoid being reduced to an arts-and-crafts function, share your results -- the good, the bad, and the ugly -- to build trust that your marketing budget is being well allocated.
Most importantly, take credit for previous successes. If you can’t walk into a room and demonstrate a direct correlation between your actions and revenue, profitability and market share, then you’re going to find it tough going. Come armed with results that are clearly aligned with your strategy-to-date however, and you make it nearly impossible to be turned down.
4. Understand that you can’t have it all.
Some things will need to be produced in-house, or for free, or not done at all. Build a portfolio of freelancers who can turn work around quickly and inexpensively. While a polished $20,000 demo video sure does look nice, a $3,000 video can often solve the same exact problem. While initial onboarding requires a slight time investment, working with contractors can save thousands of dollars a month while you benefit from the speed and specialization that an individual brings to the table.
Clearly define your priorities and adjust spend accordingly. The 80/20 Pareto Principle bears repeating. No marketing team can explore every channel available, but by concentrating your budget on the handful of areas that give the most bang for your buck, you’ll earn the respect of the money men and make your job far easier.
Understand that you can’t do it all at once and make sure you’re setting concrete goals for each month, quarter and year. Align program activity over time in support of these targets, working towards the end goals little by little. In this way, you can make steady progress, identifying both winning programs and those that fall short as you go, and adjust your strategy in real time.
5. Test and optimize.
Finance loves it when you can prove that you’ve reduced your cost per acquisition by 30 percent or improved the overall website conversations by three points. If the mantra in sales is ABC (Always Be Closing), marketing’s mantra should be ABT (Always Be Testing). Part of your marketing efforts should be testing new offers, channels and creative to squeeze more leads, deals and dollars from the flow.
If you’re tracking everything, your data should help you paint a clear picture of what is working and what is not. Leading marketers all have a firm grip on where they should increase investments and where they should cut. A dedicated marketing ops person, or marketing technology, simplify the analysis.
With an understanding of your marketing levers, you can focus on the activities and initiatives that will have the greatest positive impact on the organization as a whole.