We’re living in an age of unprecedented change. We experience with Oculus Rift, invest with Acorns, consume video through Hyper, tune into Pandora and navigate with Waze.
Time-poor marketers inevitably risk leaving budget planning until the last minute, a situation that can have a devastating impact on the effectiveness of their overall marketing strategy.
The recent Marketing Budgets Report 2016 released by Econsultancy revealed that even though digital marketing budgets are growing this year by more than 70 per cent, only a small proportion of respondents think they are working towards cohesive customer experience, breaking down silos, securing boardroom buy-in, reserving budget for innovation, or breaking the distinction between digital and traditional budgets.
Experts agree planning early can be critical to better achieving these critical targets while helping align your marketing strategy more closely with long-term business goals.
“Avoiding falling into budget traps down the track all goes down to planning, planning and planning,” OKI Data Australia’s AN/Z marketing manager, Antonio Leone, told CMO. “Use a tool to lay out all your planned spending and activities, by month or by quarter. Analyse and review spending from previous periods. You would also be wise to obtain input from other stakeholders such as the sales team for input to budget planning.
“And allow a buffer for unexpected activities or cost increases. Not factoring in buffer funds for unexpected items and not frequently reviewing/tracking actual against planned spending can be commonplace.”
Do the research before planning
For Asia-Pacific marketing manager of technology company Hyland, Dianne Gruneklee, marketers should spend time and effort in planning and research before allocating the budget.
“Set up the tactical plan to enable nimbleness,” she advised. “At the beginning of the year, build your tactical plan so that you can swap out campaigns if the budget does overrun in earlier months.
“And take time to really understand what your customers' needs are today, before planning, because customer’s needs are always changing as are their preferences as to how, where and when they receive information. This will help marketers understand where to best invest their limited marketing budgets.”
When it comes to budget planning technology, Gruneklee claimed any system you use is only as good as the information you put into it.
“Be sure to enter all projected spend at the time of planning, so you know upfront what spend you are committed to, and, update spend [if this varies] at the time each campaign is run, this will ensure accuracy,” she said. “Have your dashboard reports set up so that each day you can see how your spend versus budget is tracking and make changes to programs as necessary to tweak spend.”
Planning and the limited budget
Rakuten Marketing’s APAC managing director, Anthony Capano, said that with the complexity today of multiple channels, the ongoing evolution of digital, new players and new technologies, planning early is key, especially if budgets are limited.
“Marketing should always be viewed as a whole, and not through individual channels,” he said. “It’s easy to fall into a trap when budgets are segmented by channels and don’t focus on the entire customer journey.
“One of the best ways to assess marketing budgets is to take a holistic view, and look at marketing channels through the impact they have on the overall consumer experience. This aids in optimising budget, and provides greater flexibility to marketers managing campaigns across multiple channels.”
Capano stressed marketers need to look critically at which campaigns are actually driving traffic and impacting consumers.
“Starting to use an attribution model is a great way to do this as it helps marketers get an accurate understanding of what is driving consumer engagement, converting sales, and where budget should be prioritised and shifted,” he said.
The dangers of over-planning
However, software company Promapp’s CMO, Sarah Berkowski, warned marketers not to over-plan or over-allocate.
“Things change and you can’t set a budget at the beginning of the year and expect that the budget allocation will still be right in three, six or 12 months’ time when you’ll have more learning under your belt,” she said. “There may have been market or competitor changes that will impact your budget allocations, or new business decisions or changes in direction that you couldn’t have predicted months’ earlier.
“Don’t over-plan and don’t allocate your full budget. Be prepared to make changes and give yourself the flexibility to redirect funds based on success you see. Not everything will work the way you’d like it to – you need to leave yourself the time and flexibility to tweak the budget based on testing and learning.”
Where most marketers fail is simply having a lack of focus, or spreading their budget too thin, Berkowski claimed.
“When planning, most marketers need to make trade-offs either in terms of who they’re targeting or how,” she said. “Budgets and spending plans not aligned with critical seasonality or the budget and planning cycle timing of your target audience is another issue.”
“Make sure you can connect the dots between the allocation of your budget and the results you are expected to deliver – whether that’s brand awareness leads or sales targets. If you can’t connect the dots, you need to revisit the budget allocation or the size of the budget, or reset expectations on the results you believe you can deliver.”
Read more of our marketing budget series:
- The dangers of misaligning your marketing budget with business goals
- 5 secrets to tracking your marketing spend