Invariably, what decision makers are looking for when evaluating any spending is results, and it’s no different when considering a marketing budget. Results are the only thing that matter when you get to the bottom line. In today’s article, we’ll touch on why you should be planning your marketing budget to get results, as well as help you put those results into perspective so that your marketing budget doesn’t get wasted.
Have a Marketing Plan
A plan is critical to initializing your marketing efforts as well as maintaining them. Without a plan, the kind of information that ought to be looked at to determine results won’t even be clear.
Develop Your Strategy
Your marketing strategy needs to align with the overall vision for your business and the goals you have for its growth. It may also tie into important stakeholder and other specific department goals (especially sales) that are pertinent to marketing efforts. The strategy should help you identify appropriate marketing tactics, channels, and outcomes.
Develop Your Budget
You can’t move your strategy to a fully detailed plan without identifying your actual budget. While some people may recommend a standard percentage, it’s important to remember that there’s no one-size-fits-all approach. You should develop an understanding of both a maximum spend (to prevent hurting your business) and a minimum spend (to ensure you actually see some results) by using these algorithms: P1*M - C and P2*M - C, where P1 is 10% of projected annual gross sales, P2 is 12% of projected annual gross sales, M is gross markup, and C is major costs of operation, such as rent.
Allocate that Budget
Once you have a realistic budget, you can apply that budget to the tactics and channels you identified in your strategy. This should be a tactical plan designed to garner the best results from each, which also makes this the perfect time to identify the analytics that indicate success and design benchmarks to measure regularly.
Implement Your Plan
Be sure that your marketing team and all stakeholders understand the plan, then actually put it into action. This can be especially important if you outsource your marketing, even if it’s only specific parts of your marketing (e.g., social).
Analyze the Results
Quite simply, the only way to ensure that your marketing efforts haven’t been wasted is to thoroughly analyze them. That requires tracking the results over time so that, once analyzed, you can identify which tactics worked on each channel, and even which channels were or weren’t most effective. This will also better enable you to track the attribution behind more nebulous influencers, since the customer journey is fragmented across micro-moment touchpoints (e.g., a radio ad sends the customer to social media, which links them to a blog post, which spurs a search for peer reviews, at which point the purchase decision is made). There are two perspectives that should be used in conjunction when analyzing this data.
Formative Analysis
You should conduct formative analysis throughout your marketing process, measuring analytics and comparing them to benchmarks weekly if not daily. This kind of analysis relies on channel specific analytics (e.g., landing page visits for your website, CTR for paid social ads) as well as somewhat more in-depth evaluations, such as awareness and recall. In many ways, this evaluates the efficiency of your marketing, and it will help you identify weak points now that your marketing plan is being utilized in a real world situation. In fact, it helps you save marketing dollars because when something isn’t working, you can address that problem in real time.
Outcome Analysis
Outcome analysis is used to judge overall efficacy, namely, whether or not the marketing achieved your marketing goals as intended. This is crucial because sometimes the formative analysis can be misleading when not contextualized by the outcome analysis. For instance, DoSomething.org ran an amazing YouTube video campaign that garnered 1.5 million views, which sounds successful; unfortunately, the campaign didn’t succeed in its real goal, which was to generate donations of equipment. Most importantly, however, you’re determining whether or not your marketing results in positive ROI.
Comparing Results to Strategy for Budget Improvement
Your analysis throughout and following your marketing campaign should reveal what does or does not work. Perhaps it illuminated the fact that your customers aren’t using the social media channels to engage with brands like you thought they were. Perhaps customers respond most strongly to radio ads. Whatever trends you’ve noted, need to be applied to your next strategy so you can adjust your budget on your next marketing campaign. This lets you focus your spending on what works best and avoid wasting your marketing dollars on tactics that are ineffective.
Planning your marketing budget to get results is clearly a critical component to effectively spending your marketing dollars. Understanding your goals allows you to develop a strategy, which in turn gives you the starting place for building a marketing budget. From there you can select benchmarks to determine whether your marketing budget results are appropriate, or if you need to alter course. If you don’t do these things, then ultimately, you won’t know what is or isn’t working, and you cannot adequately parse your budget to fund only effective marketing tactics.
