The Marketing Budget - Where Marketers Go Wrong & How to Get it Right
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When the year comes to an end, brand new marketing budgets are always on the horizon.
Creating a marketing budget is not always a simple task. Many marketers pigeon hole themselves by narrowly focusing on the previous year’s plan and ignoring potential new sales goals and opportunities. It is also particularly difficult to map out a budget plan when brand awareness and impressions are not concrete numbers. In fact, according to MDG Advertising, 32% of companies believe their data is inaccurate. Planning a budget around incorrect numbers leads to wasted marketing efforts and expenses.
One mistake in budgeting can throw off an entire marketing strategy. With all the possible risks that come with creating the perfect budget, make sure to efficiently strategize to avoid unnecessary spending and costs.
From the last AgencySparks post about budgeting, here are some typical marketing budget line items to consider:
Graphic design, collateral development, and production
Digital media (SEO/SEM/PPC)
Traditional media (TV, radio, billboard, etc.)
Social media marketing
Common Mistakes Marketers Make When Putting a Budget Together
PROBLEM: Without proper budget planning, overspending and loss of revenue occurs.
SOLUTION: Align the marketing goals with the company’s vision then prioritize the expenses needed to achieve the target goals. Outlining different budget templates may help with organizing and prioritizing and avoiding hidden costs. Here are examples of some helpful budgeting templates.
PROBLEM: Budget planning is part data-analysis and part fortune-telling. Flawed analytics and gaps in customer databases leads to unreliable data. In order to properly prepare for the future, it is necessary to have a firm grasp on current financial and data standings within the business.
SOLUTION: Benchmark performance of every process before and after launching a marketing campaign to evaluate platforms and their overall effectiveness. Clicks or impressions usually result from money spent on paid media. Set aside more of the budget for campaigns with larger audiences. Target these audiences based on constant analysis of their interests and keywords.
Miscommunication between Departments
PROBLEM: In order to see the best results, the never ending feud between sales and marketing people needs to come to a close. MDG Advertising states that 50% of sales people find marketing efforts unsatisfactory and 55% believe marketers do not use measurements to influence their actions.
SOLUTION: To relieve this tension, marketers must communicate their efforts in terms of money invested and profited. An open communication about the Return of Investment (ROI) is essential when understanding one another’s value. If each group aligns their actions to the overall company goals, they will create a clear execution strategy. Being purposeful with objectives and tactics saves time, money, and efforts.
Read Related - Bridging the Gap in Marketing Talent
Sticking to the Norm
PROBLEM: Becoming comfortable with how things operate is poison to a company’s growth. Tools, consumer preferences, and competitors are constantly innovating. In just over the span of 10 years, digital has increased from 8% in 2007 to 38% present day in advertising (MDG Advertising). Often companies sit in complacency with a channel (email for example) that does the job just fine, while products like virtual reality and augmented reality are gaining in relevance.
SOLUTION: Allocate money to invest in technologies that may benefit the company in the long run. Do not ignore possibilities or underestimate the speed of change - constantly test campaigns with consumers and be open to different approaches. Consumer behavior will guide the way to what is next. Reassessing services and programs helps determine ROI in real-time. Consistently evaluate and monitor strategies and channel use to be certain everything is fully utilized. MDG’s research showed that strategy is incredibly important since strategy issues prevent 49% of marketers’ success.
Budgeting does not have to be complicated. Proper planning, vigilant evaluation, clear communication, and an open mindedness are bound to ensure a stress-free budgeting process and year.