Gartner’s latest research states that CMO’s budgets have decreased, from about 12.1% of a company’s total operating budget in 2016 to 11.3% in 2017. Gartner found many reasons and findings related to this dip in budgets, including:
- Marketing budgets likely hit a peak in 2016. After years of rising marketing budgets, there’s reason to believe we hit a peak and will now experience a continued decline in the coming years in marketing budgets.
- CMOs and marketing leaders lack financial prowess. Many CMOs are not savvy with their finances, lacking critical financial and accounting skillsets. Gartner reports that only just over half of CMOs use advanced budgeting methodologies to help achieve these goals.
- CMOs struggle to balance internal and external resources. Gartner highlights the eternal debate of insourcing vs outsourcing as another reason why CMOs struggle with budgeting. They face an uphill battle understanding how to get the most from internal resources, while at the same time getting the most value for agency dollars spent.
At Aprimo, we’ve seen a similar struggle for marketing budgets. We call this the “Marketing Operations Gap,” where organizations expect marketers to deliver more campaigns and experiences across channels while facing ever-constricting resources and budgets.
Based on our work with clients, we recommend six main ways to begin coping with marketing budgetary restrictions going into 2018:
1. Better track marketing spend.
How many of us have gotten halfway through the year, only to realize we don’t quite have enough budget to fund our year-end programs? Conversely, how many have realized in the last 4 weeks of a year that we have a budget surplus that we must use or lose? Too many marketing leaders I speak with today are using spreadsheets or stuck relying on finance departments. Marketing leaders must be empowered to manage their own budgets and spend to drive not just better usage, but also better make the business case for more spend in the coming years.
2. Set marketing priorities, and fund them accordingly.
With declining budgets, prioritizing marketing spend is going to be more important than ever. But today, too few marketers translate priorities into dollar spend. Nominal initiatives end up costing more than budgeted or planned for. CMOs need marketing systems to help ensure all marketing groups are on the same page in terms of marketing priorities and ensure the right dollars go towards those priorities.
3. Move with more agility.
Many marketing leaders are stuck in the old world of marketing, where they live or die in singular investments into big campaigns, like that big ad agency campaign. With shrinking budgets and more channels to deliver, marketing leaders need to fail faster to avoid wasting big dollars on big misses. Agile marketing—the ability to move with more flexibility and get smaller chunks of works out to customers faster—enables marketing leaders to get more from their marketing spend.
4. Enable better marketing collaboration.
Your budgets have decreased, so you’re likely not getting that new team that you had banked on. Now’s the time to instead make the most of your current resources: enable your existing teams to work better, faster, and more efficiently. One organization I spoke with also wanted to drive streamlined collaboration with their content agency partner: the faster they were able to work together, the fewer billable hours their content agency racked up.
5. Get more from existing content and experiences.
One customer I spoke with was shooting product images separately in each of the different geographies they did business. This content redundancy led to massive waste (think millions of dollars). Marketing leaders can get more bang for their buck if they create global content strategies, enabling them to do things like reuse successful content and localize global content variations.
6. Track KPIs and ROI To Justify New Spend
Any good CMO will want to reverse the downward marketing budget trend. The best way to do this is to prove the value of critical marketing activities, which many marketing teams aren’t doing today. They have little insight into things like: how long did it take to create an experience? How many resources were needed? What was the budget? What returns did the experience generate? Marketing leaders need to drive these insights to get budgets back up in 2019.
Aprimo firmly believes that firm can accomplish these six goals via new processes and innovative technologies. To learn more about our thoughts and how we can help, visit aprimo.com.