If marketing underspends, then it breaks its agreement with the company about what it is going to deliver
in terms of pipeline, leads, brand enhancements, awareness, and so on. In an ideal world, a marketing team spends every penny of its budget aligned with marketing goals and against a well-structured plan. In our OMI survey, Less than 50% of marketers can see what marketing budget is available.

The first step is to move your plan and budget onto software that provides real-time visibility into planned, committed, and invoiced expenditures. You don’t have to wait for the final payments to be made by finance, and then to receive the accounts payable or open PO report to have that current visibility. You just need a system to track it. You can always interlock to the penny with the finance system once their reports land in your inbox, but there is no need to fly blind in the meantime.

Another key step you can take is to get familiar with the concept of Budget Burn Rate (BBR). After you finalize your marketing plan and budget, marketing needs to have in place a staffing and resource capacity (or at least a capacity plan) to execute the plan and spend the budget within the fiscal year. Are there enough full-time employees, contractors, consultants, agencies, tools, etc., in place to actually deliver the plan that’s on paper?

Most marketing teams have some degree of interlock between their marketing budget and their capacity
to spend that budget in a thoughtful way. We only care about this assertion in the abstract for now. It’s true that a small team that solely builds digital campaigns can burn through a huge budget quickly in comparison to field marketing and regional events. However, we believe that the capacity of a marketing team (not just FTEs, but all contract labor and agencies as well) is normally at least roughly right-sized to the nature of the marketing plan, its required campaigns and tactics, and the size of the budget to support it.

Budget Burn Rate (BBR) is a function of change, like miles per hour, gross domestic product per capita, calories per slice of pizza, etc. In the case of BBR, we are measuring how much budget needs to be spent per time period for the remainder of the year in order to consume 100% of the budget accurately and in alignment with the marketing plan. We’ve picked a day as the unit of time. It could be a week or a month, but the bigger the time unit, the less granularity we have.

Imagine you have a budget of $1,800,000 for a fiscal year. Regardless of how you intend to allocate the budget over time and by campaign, you need to consume that budget in the next 365 days. On day

1 of your fiscal year, your required average BBR is $1,800,000/365 = $4,932/day.

Now let’s assume that you decide to allocate your budget across the months like this:

‘