Increase Your Marketing Budget
Marketers constantly juggle many projects: planning their next campaign, delivering the current one, daily business such as email, social work, and meetings. But one of their most important tasks is measuring the contribution a certain marketing campaign has on revenue and profits. Because that can lead to increases in budget and we all want that!
Marketing budgets are on the rise but marketers still fear budget cuts and find it difficult to get approval for their marketing initiatives. Senior management won’t be very keen on handing over money without seeing the value of their prior investment.
Building a budget isn’t everyone’s idea of a day well spent. And asking for more money isn’t always easy to do. It’s all about justifying your current marketing budget and then making a case for how you’ll wisely spend more money, given the opportunity.
Research the industry
A good place to start with any marketing budget is looking at what your industry peers and direct competitors are doing – and spending. You don’t need to have exact figures but a ballpark idea of how much similar companies spend and plan to spend on marketing is very useful.
There’s quite a bit of benchmarking information on the internet so you should be able to find resources that offer up some good numbers. Just remember in looking at these numbers to make sure they match your company in industry, type, and size. The CMO survey is a useful annual report that looks at annual marketing spend by industry. It also breaks down marketing spend by category (e.g. analytics, social media, training.)
After looking at analyst reports and marketing spend trends, you’ll have the benchmarks in hand and can justify to senior executives that your budget requests are in line with industry standards.
Focus on ROI
One thing that studies are showing marketers find particularly challenging is reporting the ROI of their social and content marketing.
You must be able to prove the return on investment for your marketing activities. Why? To avoid spending money on marketing efforts that don’t generate leads. If you can’t measure the ROI then your marketing department is in trouble. Just because it’s difficult doesn’t mean it’s impossible! And the great news is, if marketing organizations can show ROI they are more likely to get higher budgets.
To prove the value of your efforts, you need:
- an analytics platform like Google Analytics
- tracking codes like UTM parameters added to all your marketing efforts promoting your content
- dashboards for reporting on your content
With these in hand you’ll easily be able to measure and analyze the impact of all your content on each marketing channel. You’ll have data on impressions, clicks, leads, and sales all in one place and can then combine your campaign reports with your cost reports.
Define your key performance indicators
Prove the ROI with KPIs. KPIs should align with your marketing and business goals. You want metrics that help measure success and reflect what is most important to your company. Customer retention rate, customer lifetime value, customer acquisition cost, and sales growth all help prove marketing ROI, as we talked about above. If you can prove ROI using data from KPIs, your bosses will be more inclined to listen and approve a higher budget.
Know your operational costs
Spending is often different month to month, purchase to purchase. Because of this it can be hard to look at the big picture, spending-wise. Throughout the year you should be tracking your costs per source (i.e. email, social media, website, video, ads, etc.). Add together your costs for everything: marketing tools, domain names, hosting services, SSL certificates, team education, paid website themes, ad spend, salaries. Every marketing dollar should be tied to a revenue source so you can accurately determine your ROI.
Make the argument for social ad spend
Invest in the trends! The marketing landscape is constantly changing. There are more places than ever to invest; from content marketing, to websites, to video production, and influencer marketing there are many new ways to reach customers.
Marketing dollars are increasingly being spent on digital platforms and this means social media. Currently, social spend accounts for 12% of total marketing budgets, on average. CMOs predict they will increase their social media spend by 71% in the next five years. 71%! And this increase in social budgets is expected for B2B and B2C brands alike.
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With benchmark data and your accomplishments clearly defined, it’s time to go to the higher ups. Keep in mind, as you make your case, the way you position the marketing department. Rather than talking all about “expenses” turn the conversation to “investments” so that marketing isn’t seen as a cost but rather as a revenue center. Demonstrating how marketing drives revenue will help convince management to increase your marketing budget.
As you start your budget discussions, take a look at these other resources:
Budget Planning for 2019
The Effects of Social Media on Ad Spend
What You Need to Know About Marketing Reporting
Creating next year’s marketing calendar