4 Challenges When Budgeting for Marketing
1. Planning
Setting aside time to develop an annual plan is difficult. Marketers have to juggle dedicating enough time and resources to the plan, with the day-to-day work needed to sustain current activities. In addition to time constraints, understanding the latest tactics and technologies available and predicting the appropriate platforms to commit to in advance is a challenge. For example, committing to AR/VR technologies in 2018 may be trendy but if you don’t fully understand how to activate your brand within the AR/VR space, the quality may be low and the experience could fall short.
Understanding those challenges, it’s extremely important to take the time to create a strategic plan built around your company’s commitment to the customer. Rushing through the planning process may result in a tactical plan that looks similar (or worse, identical) to the previous year. And a plan that looks the same from year-to-year cannot take full advantage of new technologies and platforms that may be available. Do whatever it takes to focus on building a plan that properly showcases your company’s promise to the market and meets established goals – block calendars, get outside the office, hire outside support, etc. With dedicated time to plan and a fair understanding of the existing technological landscape available, marketers can make an educated decision on a plan for the coming year. In addition, they can ensure the plan is different fromthan the previous year(s) by taking lessons learned from past successes and missteps.
2. Request
Whether marketers receive their annual budget from leadership or make a request for their working numbers, the question about return on the projected investment swirls around the budgeting conversations. Even in a world where online analytics are increasingly easier to capture, this is a challenging question to solve. Mapping out the return on a marketing spend months in advance is difficult in the modern marketing age where we live in a 24-hour news cycle and communicate in tweets and snaps. The platform or technology used in a planned tactic could be a dated solution by the time it’s set to execute, potentially changing the projected return.
As difficult as it may be, do not get bogged down on the ROI during the budgeting stage (and don’t let others in your company either). Real dollars have yet to be allocated to your department so reviewing/debating ROI could be a pointless exercise. Put your faith in the strategic plan developed for the customer and the company. Move the conversation away from tactics and ROI, and focus on the experiences developed for your audiences.
3. Allocation
Developing a budget takes time; beyond the financial challenges that may exist within an organization there can be an internal struggle for dollar allocation. During the allocation process it’s important to remind corporate leaders and peers everything marketing does for the organization. As the marketing machine never stops churning, it can be easy to overlook the day-to-day work a marketing team puts in to maintain brand awareness, manage the earned and paid approach and build a positive company image. As a baseline, you should document the work and resources needed for day-to-day marketing support, beyond big project spends or initiatives. In addition, celebrate your successes and wins. If you get into a habit of celebrating your achievements throughout the year, it continually promotes the value marketing adds to the company and can make the corporate dollar allocation process tip in your favor.
Once you get your budget numbers finalized, now is the time to revisit the plan and ensure proper alignment with company goals. Don’t worry about the tactics and the ROI, focus on the customer journey, experience and the method to measure that experience.
4. Execution
Market disruptions, company performance, new technologies, staffing, etc. continually present an unknown challenge. Routinely, marketing leaders are tasked to take up a new initiative or face a challenge in the market that is not included in the budget. How to juggle this unforeseen situation with your existing plan and the day-to-day efforts is difficult especially without a portion of your budget allocated to support such situations. It helps when you have a team (either internal or external) but even the best teams get strapped for time and resources. In the end, additional money may be needed. A key trait of the best marketers is they are nimble. To adjust a plan while maintaining the original goals and to still achieve the desired outcome is a true skill. The best do it by evaluating tactical execution rather than strategy and stay on the course that was set during planning.
In the modern marketing age, marketers are fortunate to be more a part of the budgeting process than ever. Marketing has a valuable seat at the table and is an active participant in the distribution of dollars. There are pitfalls to avoid, but departments can win with a thoughtful approach leading the way. Again, move the discussion away from tactics and ROI and focus on the customer experience and measurement. Work to celebrate and promote your wins and ensure the company understands the day-to-day commitment and workload of marketing. Lastly, maintain your original goals and install a willingness to be nimble and experiment.