How to Justify Your Marketing Budget to Management

Even in the best of times, getting approval for your marketing budget can be a difficult task, particularly if yours is a complex sale and tracking direct attribution is fuzzy.

Even in the best of times, getting approval for your marketing budget can be a difficult task, particularly if yours is a complex sale and tracking direct attribution is fuzzy.

You’ll likely find the path easier if you lay out your plans to include a set of key metrics and parameters that define success.

What Is the Opportunity?

Begin the conversation by outlining the opportunity you see available to your organization and identifying what happens when you win that opportunity. Do you increase market share? Improve profitability? Bump up customer satisfaction?

The opportunity better be based on a business metric improvement. You’re not likely to get far with a discussion of improved process metrics: more subscribers, likes, followers, etc. That said, it is worth tracking these things so that in the future you can point to them and draw a connection between improved engagement and increases in hard-dollar metrics.

You may also consider a defensive positioning — “if we don’t do this, our competitors will.” Or, “our competitors are already doing this, and we’re falling behind.” I’d be careful with this route, though, as it often leads to defensive thinking. And that leads to marketing resources spent to maintain the status quo. Sometimes that’s the smart path, but it’s not necessarily a popular one.

What Are the Opportunity Costs?

Corporate budgets are generally a zero-sum game. If you spend the money here, that money isn’t being spent somewhere else. You need to demonstrate an awareness of that and be prepared to discuss how and why the investment you are requesting will outproduce the one it is replacing.

How Long Will It Take?

Not all marketing activities are created equal. They have different payoff expectations. (Writing a blog post today won’t likely get you a new customer tomorrow. Launching a new PPC campaign just might.)

Be ready to discuss whether your marketing budget proposal is a short-, medium-, or long-term play and why anything that will take longer than this quarter to realize goals is worth the time risk involved. (Your organization’s culture will influence how important this question is, and perhaps even if recommending a long-term plan is an option.)

What Will It Cost?

This might be the first question out of a manager’s mouth regarding the marketing spend on a specific project, but I wouldn’t address it first if I could avoid it. Better to establish value and expected (positive) outcomes first. Then get into what the total cost will be, whether costs are front-end loaded or more evenly spread out, and whether some portion of your costs are accrued only when progress is being made. The more detail you can provide — particularly details that mitigate risk — the better.

How Can It Be Tweaked?

If it’s not working, what can you change? If it’s working, can it be improved upon? These are critical questions not only to be able to answer, but to get your management team to think about. Why? Because the condition on day one of your new initiative are not going to change, perhaps radically, by day 90.

If you can show that you’re prepared to make the adjustments necessary to keep your efforts pointed toward a profitable outcome, you’ll find greater success in funding your marketing ideas.

 

 

Defending Your Digital Marketing Budget

It’s hard to get marketing results if you don’t have a digital marketing budget. Here are three ways to position your marketing team to get the budget you need.

It’s hard to get marketing results if you don’t have a digital marketing budget. Here are three ways to position your marketing team to get the budget you need.

1. Data Matters

First and foremost, you have to track your activity so you can demonstrate what is working and what is not. Ideally, you’ll do this in ways that make sense to the folks holding the purse strings — more on that below — but at the very least, you need to demonstrate stability and growth even if you can’t tie your activity directly to revenue.

2. Track the Right Metrics

As alluded to above, there are metrics and there are metrics. Likes, follows, friends, subscribers, are all meaningful metrics in their own way, but they aren’t bottom line metrics. We refer to these metrics as process metrics and differentiate between them and the business metrics that will be of interest to those with P&L responsibilities.

In this we’ll include lead generation, lead quality and revenue attributable to your digital marketing efforts. The more top-line difference you can make — and demonstrate — the easier the decision is to continue/increase funding for your initiatives.

Don’t forget the other side of the coin, though: costs. If you can demonstrate that the leads and revenue you generate are costing the firm less than other channels and techniques, you’ll have excellent ammunition, even if yours isn’t the biggest producer of revenue.

3. Create Value With Your Digital Marketing Budget

The overall goal is to create value for your firm. Doing this requires a data-driven approach that, at its best, can stand alone as a significant source of new business for the organization.

That can be a high bar, depending on both your industry and your organization. You can still create lasting value if your initiatives have a strong positive impact on your organization’s sales team. You’re safer if you can produce revenue, but if you can produce demand that the sales team converts, your budget is safe. (And as we noted above, if you can document that the demand you produce converts more consistently than other sources, your case becomes that much stronger.)

If you find yourself lagging behind either of these benchmarks, it may be time to proactively approach the executives responsible for your budget, swallow hard, own up to your shortcomings and seek buy-in on a plan to improve performance.

That’s no easy conversation, but it certainly beats watching your department die a slow death as it is starved of the resources it needs to be anything other than a service bureau, fulfilling requests for marketing communications materials. That’s the point at which you and your team become expendable. Creating value is an imperative for relevance — and survival.