Written by Julia Stead, CMO at Allocadia
In May – what feels like a million years ago – my first CMO Strategy Series blog covered short-term vs long-term spend. Back then I recommended marketers support the growth of immediate revenue streams, adopt an agile budgeting and planning strategy, and make all long-term investments focused on brand or innovation. Now that we’re headed into a new year, with new challenges and new market shifts, my recommendations aren’t what they were six months ago.
But that’s good news! Many companies have (thankfully) moved beyond just being focused on support and retention of immediate revenue streams, and are starting to plan for more growth. With six months of “on the ground” learnings and what we’ve learned from the State of Spend, my recommendations for marketing investment strategy in 2021 are:
- Take it one quarter at a time
- Balance “proven” investments with testing
- Build a solid operational infrastructure
1. Take It One Quarter at a Time
Talking with other CMOs, it seems the general consensus from all of us is to take investment strategy and planning one quarter at a time. Sure, put together a high-level annual budget because you need to, but keep things very flexible. While that might seem scary, remember that it was only in May that we were planning week by week. The road to recovery isn’t quick, and we need to recognize that we’ve actually come a long way!
Look at doing six week sprints with your team, and get everyone aligned and excited about big cross-functional projects that will have the biggest impact on your goals. That tight alignment and collaboration is how you move forward – fast.
When it comes to short vs long term marketing investment strategy, I’d recommend:
- Don’t worry or focus too much on long-term investments, keep your eyes on the quarter at hand.
- If you can afford it, continue to invest in awareness programs and keep the lights on. I’m a big proponent of good PR and thought leadership investment. Plus, when you start to lose market share, voice, and brand visibility in front of your target audiences, it’s an expensive hill to climb back up.
- Devote a significant amount of budget to new ideas and testing. Consumer sentiment is changing very rapidly, and so you need to be able to constantly iterate and keep up.
2. Balance “Proven” Investments with Testing
While many of us are starting to plan for more growth, it’s with a cautious and agile mindset. Only having 50-60% of budget committed by the beginning of a quarter would have been a nightmare in 2019. But now that flexibility is critical as organizations seek to capitalize on new strategies and market opportunities as they appear. That could be anything from pushing new product lines to developing product capabilities to meet new customer needs.
Here’s how I’m balancing my marketing investment strategy with “tried and true” and room for risks:
- 60% is allocated for ongoing “proven” investments like digital advertising, content production & syndication, PR, AR, etc.
- 30% is saved for testing new ideas
- 10% is left open to invest in on the fly optimizations or new tests that are proving successful
One area I’m skeptical of investing in are the large, traditional events that have reinvented themselves online. The level of return and engagement we could have expected from those events when they were in-person haven’t made the transition to our new digital-only world.
Instead, I’d rather invest in smaller events, focused on delivering targeted experiences by persona. Or work directly with partners to create events best suited for our companies right now, instead of going with tradition.
3. Build a Solid Operational Infrastructure
If your attribution systems and reporting aren’t properly connected to your marketing investment data, take time to re-build and set your foundations right. We’re more reliant than ever on the operational infrastructure of how our programs and teams run. Marketing leaders need real-time (or as close to real-time as possible) visibility into actual spend, leading indicator performance KPIs, and ROI to be able to make quick decisions on what’s working, what’s not, and what to test out next. I’m there in the data weekly to ensure every dollar is being spent in a way that aligns with our corporate strategy AND is embracing creativity to drive performance.
As you re-build or tweak your system, revisit your KPIs and make sure they align to corporate strategy. Have open discussions with the CEO and other execs to be on the same page for where marketing can – and should – most support the business in 2021. Then adjust your KPIs as necessary so you can speak to marketing’s business impact. For example, don’t focus on new logo acquisition ROI metrics if the business needs marketing to build out a deeper customer community and drive education or adoption.
2020 dealt us some incredibly hard challenges, and as we head into a new year we’re stronger and better prepared for whatever comes next. This is a time for marketers to prove that they’re revenue drivers. That our investment strategy creates business impact and that we act with agility in the face of uncertainty.