Nearly every marketer on the planet — no matter the role, industry, or seniority — has to make decisions about where to invest their marketing dollars. Those investment decisions will have a huge impact on every team’s success.
In this post, we’ll provide some recommendations for the very beginning of your marketing budget’s life — that crucial time when your team is making decisions about how to organize and structure its marketing budget.
- Choosing a structure for your team’s marketing budgets
- Our recommendation for how to structure a marketing budget
- How and why Marketing and Finance structure budgets differently
Organizing your marketing budgets
- By Business Unit or Product Line: This top-level structure divides spend according to discrete business units. Companies operating in multiple industries will typically adopt this format (separating spend by brand) with a secondary level of classification according to region or type of marketing activity.
- By Region: Where marketing spending patterns differ drastically by region, a regional structure may be best, with sub-budgets lining up within the regions. In some companies, each region is mandated to adopt a consistent budget structure. In others, the regional marketing teams are free to organize spend how they see fit.
- By Functional Area or Campaign Framework: Some companies will structure budgets based on functional area (events, public relations, or digital, for example). Others are guided by the SiriusDecisions Campaign Framework, using the four program families: Reputation, Demand Creation, Sales Enablement, and Market Intelligence. This can be a convenient way to organize things since non-executive marketers’ roles most often align to these functional areas. This can also be the way budgets are structured within a hierarchy based on one of the above structures.
- By Allocation: This is a grab-bag of structures not mentioned above. Some businesses are better-suited to a marketing budget hierarchy according to vendor, branch, or even person (in the case of a smaller organization).
- A Combination: Blends of the above are commonly seen. For example, a consumer packaged goods company may organize by product line (shaving razors), but each of those rolls up into an overall hierarchy according to (men’s grooming products). Regions that organize by function is another common example.
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