How to Strategically Think About Your Annual Marketing Budget

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Creating and getting approval for your annual marketing budget is one of the most important (and often difficult) tasks for an in-house marketing team. It takes a lot of time to analyze results from the previous year, gather anticipated costs for new ideas, and finalize a budget that works within the limits of your business. The challenge becomes even greater in seasons of economic uncertainty, and the threat of a recession can create budget cuts at any point.

Over the past decade, we’ve had the opportunity to walk with dozens of clients through the budgeting process. We’ve helped start-ups looking for creative ways to maximize their resources. We’ve helped million-dollar companies navigate uncertainty during the pandemic and make marketing budget decisions during a recession. If you think of an issue or question, we’ve likely faced it. 

How to Strategically Think About Your Annual Marketing Budget

For this article, we’ve asked Senior Client Relations Specialist Marcie Prescott to share the wisdom and insight she’s learned from decades of experience developing marketing budgets. Here are the four best practices that Marcie shared to help you think more strategically about your annual marketing budget. Her tips can help ensure you stay on track toward your goals: 

1. Make sure your budget is connected to your objectives, goals, and key metrics. 

Your marketing budget should be closely integrated with your annual marketing plan. Every line item in your budget should be connected to a tactic. It’s also important to identify the success metrics you’re going to use to determine if your investment was worth it. 

If you can’t look at your budget and answer, “What are we wanting to achieve with this investment?” then take a step back and clarify your annual marketing goals and objectives.  

2. Recognize the common pitfalls that sink your marketing budget.

A big part of managing your budget is knowing what obstacles and roadblocks to avoid. Here are a few common pitfalls that can sink your marketing budget:

  • Failing to identify your target market and audience. It doesn’t matter how big your marketing budget is if you don’t connect with potential customers. 
  • Putting too much effort into big budget marketing efforts. If you’re gambling with your marketing budget, you’re doing it wrong. Instead, it’s important to diversify your marketing spend so that you’re not putting too many eggs in one basket. 
  • Underestimating the amount of work involved in a marketing campaign. It’s easy to develop an annual marketing strategy and budget without recognizing all of the time, energy, and resources that it will take to implement. Before you finalize your budget, it’s important to ask, “Can we really do this?” Getting input from your team is also important.
3. View your marketing budget as a fluid asset. 

If there’s one lesson we’ve learned, it’s that your budget should be a fluid document that is reviewed and updated regularly. Neither your annual marketing strategy nor your budget should be written in stone. You can pivot your marketing without abandoning your entire strategy and make necessary changes to your budget. 

Fluid marketing budgets allow companies to redirect marketing to tactics that perform well and channels that suddenly offer new opportunities. This is even more important during a recession, when potential cuts may be required. 

4. Embrace a mindset of continuous improvement toward your strategy and budget.

Marketers should constantly be learning, testing new ideas, and finding ways to maximize the ROI of their budget. Rather than using last year’s budget or “institutional wisdom” to drive your decisions, embrace a mindset of continuous improvement to develop a marketing budget based on where your business is headed. Just because something worked well five years ago doesn’t mean that it’s the best way to connect with today’s customers.

You don’t have to wait until the end of the year to be more strategic with your marketing budget. Whether the year is winding to a close or just getting underway, it’s always a good time to think about your budget and consider how you can be more strategic with the resources you’ve allocated.

How to Create a Data-Driven Culture for Growing Your Business

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In today’s world of advanced analytics and dashboards, creating a data-driven, decision-making culture has become a popular topic of conversation for business leaders and marketing professionals. However, there can be a lot of challenges when trying to implement a culture where data is the diplomat when it comes to making strategic decisions. While there’s always a balance of quantitative data and qualitative experience, businesses that use data to drive their strategies and decisions see tremendous growth. Companies who adopt data-driven marketing are six times more likely to be profitable year-over-year. And yet, 87% of companies say data is the most underused asset in their marketing efforts. How to Create a Data-Driven Culture for Growing Your Business So, how do you change that reality and create a data-driven culture in order to grow your business? Here are a few keys:
  • Make sure key stakeholders are ready to embrace fact-based decision-making. It’s unlikely that everyone will naturally embrace the shift toward data-driven decision-making. For some, it won’t seem natural. While you don’t need everyone’s buy-in to start changing the culture, you do need the key stakeholders to get on board. It’s very important that the commitment to data-driven decision-making permeates from the top down.
  • Pick one objective or area to start improving first. Figuring out where to start can be the most overwhelming aspect of making the shift. Business leaders can often suffer from paralysis of analysis when trying to figure out where to start. If you’re trying to become a data-driven culture, it is important to think of things in stages. Start small with one area that might be a priority for the entire organization that has enough data.
  • Don’t forget to communicate “what’s in it for them.” People are more accepting of change when they understand how it makes their lives better. Whenever you’re trying to shift the culture in your organization, don’t forget to communicate how data-driven decision-making will specifically help each person. It could be that data helps them close more deals or prioritize their time more effectively. Answering “what’s in it for them” is essential for getting buy-in from people who might seem resistant.
Many business leaders still rely on their gut to make important decisions. Rather than leveraging the data they have a source for objective insights, they’d prefer to rely on their intuitions when developing their strategy. However, creating a culture where everyone understands the value of data is crucial as things become more competitive.