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Campaign planning is part of the budgeting process — Or, at least, it should be

Brett Kahnke

Who doesn’t love building a marketing budget? There’s no happier time for most marketers than when they get the chance to really tear into the details of planned spend and compare notes with colleagues — even better if it involves spreadsheets! For me, the best experience was working at companies where budgeting was all crammed in at the end of the calendar year. The uninformed would hear us humming, “It’s the most wonderful time of the year,” while we subtotaled our budget by general ledger code, and they assumed we were singing about the holidays. Good times …

Wait, it isn’t like that where you work? OK, it hasn’t really been that way for me either. I’m sure there are some marketers whose favorite part of the job is budgeting, but I’m not completely sure I want to meet them. What would we talk about? Marketing campaigns, on the other hand, is a topic I could talk about for hours. Planning out the best ways to connect with buyers across different segments and efficiently moving them toward a solution — that part has always been fun. What I didn’t understand early in my career was that campaign planning and marketing budgeting were supposed to be part of the same thing.

Many marketers I work with see budgeting as a necessary burden — a required planning step before they can get on with building their campaigns. What they often miss is that building a campaign strategy is a key part of effective budgeting. It’s how the competing priorities of a global marketing organization become aligned to a cohesive strategy. It’s how senior leadership can drive top-down allocation of budget against goals while still allowing execution teams to build highly focused programs addressing market needs and provide critical bottom-up feedback.

Top-down budgeting refers to any process where senior leadership determines the budget allocations for the organization and hands those individual budgets down to execution leaders. This approach works best when well-informed executives use the process to tightly align funding to the strategic objectives that came out of marketing planning. The risk is that this style of budgeting can turn into a finance-driven exercise in high-level decision-making that becomes too disconnected from the needs of buyers and gives too much weight to historical spending patterns instead of the changing needs of the business.

The opposite approach can be described as a bottom-up strategy, where leaders at regional, business unit, or functional team levels of the marketing organization build out budget requests for each area, then roll them up to senior leadership for review. This style of budgeting can help surface innovative ideas and leverage a closer relationship with the market to better focus spend on prospective buyer and customer needs. Of course, it can just as easily become an exercise in magical thinking as a series of wish-list items disconnected from a centralized strategy bloat the proposed budget. The one thing you can be certain of in any bottom-up exercise is that it will add up to more money than you have. Eventually, leadership will hand down the “real” number that teams have to work with, and then they get to redo their plan.

Forrester’s Strategic Budget Allocation Model blends the top-down and bottom-up approaches to try to maximize the benefits of each while making more efficient use of money and time. To pull this off, leadership needs to have strategic objectives aligned throughout all levels of the organization, and execution leads need to build program plans that directly address their target markets without straying from sound corporate strategy. That depends on the marketing planning process — and, in particular, a strong campaign implementation process that builds off of your marketing planning work.

A global campaign strategy enables resource choices that are anchored in the buyer needs that your solutions address. Those parent campaigns are broken down into a hierarchy of subcampaigns against each area focus. This could include geographic regions, business units, industries, or target markets. It should also account for new business and existing customer distinctions and include a strategy for how spend is focused on reputation, demand, customer engagement, and internal enablement inside each focus area.

Yeah, that sounds like a lot of work. But it’s the work that separates companies that are simply managing habitual spend from those that are actively targeting every investment toward changing business needs. It also happens to be the kind of strategizing that gets most marketers out of bed every morning and makes us excited to do our job. It’s inside this robust planning process that competing priorities emerge and are addressed. It allows budget to be allocated to each subcampaign according to relative impact, and it lets execution teams provide feedback when the available funds are unlikely to achieve their objectives.

At this year’s B2B Summit EMEA, September 28–29, my colleague Rani Salehi and I will dig deeper into the intersection of budgeting and campaign planning. Look out for our session, “Operationalizing Bottom-Up Demand Planning Inside The Strategic Budget Allocation Process.”

At Forrester, we work with clients to understand the interrelated processes of marketing planning, campaign implementation, and strategic budget allocation. We work with all layers of the marketing structure to improve planning and goal setting within a structured campaign hierarchy designed to address customer needs across regions, business units, and target markets. That foundation lays the groundwork for budgeting that drives performance and minimizes waste. To learn more, clients can connect with our analysts for deeper guidance and access to our full library of published research on these topics.