Daniel Kushner, in an article on the Marketo.com blog, states that allocating and optimizing the marketing budget is foundational for business growth. The importance of this cannot be overstated because effective marketing campaigns produce qualified leads which then lead to increased revenue. Optimizing the budget will in turn produce more leads at a lower cost, leading to increased Return on Investment.
Kushner specifically states:
“We are in the age where marketing is recognized as the foundation for business growth. Therefore, marketers have to devote time to determining exactly how each marketing dollar will be spent so they can optimize the ROI.”
When determining the allocation of the marketing budget, it is wise to invest time in research and evaluation before you begin to put numbers into the spreadsheet. Doing research first will help you build your business case as well as prevent large revisions of your numbers.
An effective approach to research is the “Past, Future, Present” model:
- Past: What have you done, what worked and what are their common traits?
- Future: What changes are coming that will impact marketing?
- Present: Taking the research into account, what marketing tactics will optimize the future results?
Review campaigns and programs you have done in the past. Research those past campaigns, both the successes and the failures and look for common elements within them. Examine everything; target audience, value proposition, timing, content placement, copy and response method. Seek to discover the common elements of the successful campaigns. While you are at it, check your competition’s campaigns. If you see a repeating theme, it is probably a successful campaign strategy.
What new technologies are coming up in the near future for both digital and hardcopy? Changes to important players’ technologies can have a huge impact on marketing. For example, in April of 2015 Google added “mobile compatibility” to their algorithm for ranking websites. If a website had not been made mobile-device compatible, it was essentially knocked out of Google’s search results. Check the search technologies and the social media sites as well as smaller emerging tech for trends that could indicate a coming change.
Once you have compiled all your research and found the common elements, use that information to begin allocating budget dollars to your future marketing spend. Evaluate the proposed strategies and tactics with the cold eye of successful past tactics and how well they would work with the upcoming future technologies. Be both astute and judicious in your approach; strategies that have failed in the past should get little or no dollars, whereas growth strategies should get a larger portion of the budgeted amount. Do, however, leave room in the budget for growth and flexibility. Despite all research, situations will arise which you can use for a promotional burst to gain a sudden increase in leads. Make sure you have some budget dollars allocated for unknown opportunities.
So invest some time to investigate the past and future. Then plan your present. Doing this will help you more accurately allocate marketing dollars and achieve a healthy ROI.
See Daniel’s article here to read his suggestions about how to allocate a budget. If you are ready to begin working on a forward-planning marketing budget for 2017, click the following link to download a free copy of KEO Marketing’s Marketer’s Guide titled “5 Critical Steps for Planning Your 2017 Marketing Budget”.