Marketing Budgets: It’s Time To Plan For A More Fortunate 2011
Is your fiscal year also your calendar year? If the answer is yes, then you have my sympathies. Your budget season has probably begun, negotiations will be tough, and the outcome is uncertain.
The background for 2011 negotiations will be the experience of 2010, a year in which marketing budgets rose cautiously at best, as I show in my latest research. This was despite the fact that marketers who responded to Forrester's February 2010 Global Marketing Leadership Online Survey were more than twice as likely to see signs of economic recovery in their industry as to not see them. B2B marketing leaders fared worse than their B2C counterparts:
The areas of marketing that fared the worst were those that were viewed as being expensive, and with low or uncertain ROI. For B2B, that meant sponsorships, trade shows, and traditional media. For B2C, it meant print advertising, agency fees, and direct mail. Conversely, all of the growth areas were related to digital media in one way or another.
So what does that mean for CMOs entering budget season? My advice would be to focus on measurable program elements that are designed around business objectives. That sounds obvious, but the surprising truth is that many of the CMOs whom we surveyed said they were shifting budget to areas they considered "strategic," which falls far short of this standard.
In the longer term, proving the business value of marketing — and laying the foundation for budget growth — involves massive changes to how CMOs plan, measure, and organize marketing. But budget season has begun, and the immediate prize is a greater budget increase in 2011, not 2100. To come up trumps on January 1, I'd be ensuring that all marketing plans for 2011 build toward the long-term goal of business focus and accountability. As the HERO Project Effort-Value Evaluation tool makes clear, opportunities for innovation are endless in business, but the starting point should be activities that promise the lowest cost, with the highest, quickest, and most likely return.
With this approach to planning, 2011 marketing budget increases should be more in line with the general recovery that we're seeing in most economies.