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8 Ways to Improve your Marketing Budget
Depending on your team and budget size, it may make sense to cascade budget ownership
to individuals in your team, giving them authority to spend in the domains for which they have responsibility. However, having monolithic budget ownership and approval normally does not lead to the best marketing outcomes. From our 2021 OMI survey data, less than 50% of marketers divide their budget into segments with clear owners for accountability.
Improving Your Marketing Budget
The success of your marketing outcomes largely depends on the execution of your marketing budget. A lot of our attention tends to be focused on the execution of the programs, which is critical. In addition, though, successful organizations demonstrate accurate and nimble operational marketing management of their budgets and expenses.
Achieving mastery of the management of your budget requires:
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A handful of core finance principles are implemented throughout the marketing team, such as how expenses are accounted for, and what that means for when they will hit the marketing budget.
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A shared understanding throughout the entire marketing team of the different categories of expense, and the life cycle of those expense categories
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A systematic approach to recapturing stranded budget
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An understanding of current and future execution risk through an understanding of the Budget Burn Rate metric
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The ability to quickly run scenario analyses of budget changes and implement the preferred scenario efficiently
If you sustain these practices, your marketing function will benefit in numerous ways. You’ll make better decisions when you have accurate, real-time visibility into what budget is available and what has been spent. You’ll accurately consume your budget on time, in alignment with your marketing goals. You’ll avoid over- and under-spend, over-priced rush jobs, and losing budget to use-it-or-lose-it company policies. You’ll also be responsive and responsible in replanning scenarios due to external factors or company performance, and will be able to accurately measure ROI.
There is no downside to managing your budget accurately, and by implementing a fairly small number of steps, you will be able to significantly enhance the likelihood of achieving better marketing outcomes.
Dan Faulkner is co-author of The Next CMO: a guide to operational marketing excellence, and the CTO of Planful, where he is responsible for the technical strategy and delivery of the world’s first AI-powered marketing management platform. Dan has 25 years of high-tech experience, spanning research and development, product management, strategy, and general management. He has deep international experience, having led businesses in Europe, Asia, North America, and South America, delivering complex AI solutions at scale to numerous industries. Dan holds a Bachelor’s degree in Linguistics, and Masters degrees in Speech & Language Processing, and Marketing. He has completed studies in Strategy Implementation at Wharton.
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