A century ago, John Wanamaker famously said “half the money I spend on advertising is wasted; the trouble is I don’t know which half.”
That saying holds true for many marketers today. Although it’s worse because it’s now more than half – $50 billion in digital marketing and trade spend is wasted every year.
The pressure for marketing to drive impact across the entire customer journey never stops increasing. As we rebuild for a post-pandemic future, efficiency with our marketing budgets is critical. No marketer wants to waste a single dollar when it comes time to allocate budgets, but many are still over-investing in areas without knowing if it’s driving any impact.
How do marketers optimize their budgets to only focus on the most effective campaigns, programs, and activities?
Here are three ways to ensure your marketing team is investing in the right programs to drive the greatest impact.
- Take control of your marketing budgets
- Create budget visibility by pulling all financial data into one platform
- Look at your top performers by touchpoint and by channel
1. Take control of your marketing budgets
Stop working in silos and start introducing consistency across how you manage your marketing investments. Start by implementing the same structure for all marketing budgets based on the hierarchy of how teams are organized and how funds are allocated.
Now that you’ve got some control, make sure things don’t spiral out of control again by establishing defined processes for managing changes between budgets: namely reallocations and transfers. These can be messy, time-consuming, and difficult to track, especially when you start adding in multiple brands, products, and geographies. Set up a process so your marketers can efficiently reallocate or adjust budgets right where they’re managing their investments.
If your team hasn’t made moves to manage their spend, you’ll never be able to truly optimize your marketing budgets and outcomes. That’s the first step on your journey to ensuring you invest every dollar for the greatest impact.
2. Create budget visibility by pulling all financial data into one platform
Does this sound familiar? Marketers have one budget spreadsheet while Finance has a general ledger version, with both departments making judgement calls about how to classify transactions. Because no one on either team knows the actual status of marketing investments until well past quarter end, marketing is losing money because they can’t tell where they underspent or overspent.
Having accurate data by aligning budgets and investments with the actuals from an ERP system enables marketing teams to get a transparent view into exactly what they’re spending and where to confidently align with finance’s investment data.
3. Look at your top performers by touchpoint and by channel
To invest more in what’s working and less in what doesn’t, every marketer needs to understand the performance of their campaigns and the return they’re generating.
Without a consistent way of measuring performance across the marketing department, and measuring the performance of different kinds of programs, it’s not possible to make informed decisions about which activities provide greater impact – let alone seeing which touchpoints have the most conversions.
The first step is to connect the accurate investment data we just talked about. The next step is determining which performance or ROI metrics your team needs to measure. And in 2021, the biggest channels to measure will be digital.
Freshworks optimized their marketing budgets by building integrations between Allocadia, Google Ads, and LinkedIn Ads. And because they’d also built integration for their financial technology, Allocadia holds real-time insights to Freshworks’ digital budgets and metrics. They can track digital ad spend by platform channel as well as by various campaigns, so their marketers know how much to invest and where to meet short and long-term revenue goals.
The Results of Optimizing Your Marketing Budget
Visibility – Marketers who have visibility into their marketing performance and ROI know how they impact their goals, and where they’re falling short.
Better Impact – Allocate your budget only to the most effective campaigns, programs, and activities, and you’ll see more pipeline, more revenue, a stronger brand, and greater awareness.
More Confidence – Know that your budget is being spent in the most effective way, and stop relying on gut feelings to make your decisions. (That’s a sure way to change the perception of marketing from cost-center to revenue-driver.)
Agility – Change happens. When it does, and you’re in control of your marketing budgets, your team can quickly demonstrate the projected impact to the business of an increase or decrease in budget, or a re-allocation of funds within your campaign mix.
Your marketing budget is the ultimate expression of your company’s strategy. Today, it’s critical for marketing leaders to optimize what they spend to ensure their limited resources go only to the most effective campaigns, programs, and activities.