Marketing Budget Approval: Building a Compelling Case for Your Marketing Budget
If you’re in marketing, then you’re a pro when it comes to communicating ideas to different audiences. You know how to construct campaigns that speak directly to your target customers and generate positive results for your organization. But there’s one thing that can stand between you and your next spectacular campaign ? budget approval. After all, it doesn’t matter how great your marketing ideas are if they stay on the drawing board. Here are some tips to help you prepare a pitch that will win over leadership and secure the budget for your next marketing campaign.
Understanding the Importance of Marketing Budget Approval
Marketing is absolutely crucial to any company’s success. To gain customers, you need to stand out from a sea of competitors, and there’s no better way to achieve this goal than through marketing.
But getting eyes on your products or services can be costly. That’s why top companies approve budgets worth billions of dollars every year.
For instance, here’s what leading advertisers spent on ads in 2021:
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Procter and Gamble: $8.1 billion
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Amazon: $4.8 billion
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Disney: $3 billion
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Apple: $2.7 billion
But even if you’re working with more modest budgets than these, it can still be a challenge to gain approval from the higher-ups. To build a compelling case for your budget, you need to channel your communication expertise and connect with the decision-makers in your own organization.
It’s actually not too different from creating marketing campaigns for external audiences. If you can demonstrate that your marketing strategy can help achieve organizational goals and drive business growth, then you’re more likely to get your budget approved.
Identifying Key Components of an Effective Marketing Budget
Broadly speaking, a marketing budget should answer the following four questions:
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How much do you plan to spend?
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What are your marketing goals?
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How will you allocate your budget?
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How will you measure success?
Keep in mind that your budget will likely cover various types of spending, including but not limited to these key components:
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Ad spend: Paid advertising on popular search engines, social media ads, print ads, and other campaigns
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Outsourcing: Agencies or freelancers for services like graphic design, web development, SEO support, content writing, public relations, event management, etc.
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Research: Market research, focus groups, surveys, etc.
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Technology: Tools and software that can help automate your marketing efforts, track and analyze data, and optimize your campaigns
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Events: In-person and virtual events, such as conferences, trade shows, meet-ups, etc.
Building a Data-Driven Case for Your Marketing Budget
The best way to demonstrate that your budget will pay off in the long run is to have solid data to back up your claims.
Do some research on your company’s past marketing campaigns and see how they?ve performed in terms of return on investment (ROI) or other goals like customer acquisition. Once you’ve documented these findings, you can use the data to make evidence-backed predictions for how your proposed marketing efforts will lead to incremental revenue.
You should also align your budget with industry standards. If this isn’t done, then it could be a sign that you’re either overestimating or underestimating certain aspects of the budget. For reference, over the last five years, marketing budgets have hovered at around 10% of a company’s total revenue (apart from a drop down to 6% during Covid’s disruption).
Here are some examples of relevant marketing metrics and analytics that you can include when planning your budget:
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Customer acquisition cost (CAC)
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Customer lifetime value (CLV)
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Cost per inquiry (CPI) or cost per lead
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Cost per order (CPO)
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New customer sales
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Sales growth
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Return on ad spend (ROAS)
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Return on marketing investment (ROMI)
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Lead conversion rate
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Conversion rate by marketing channel
Aligning Marketing Goals With Organizational Objectives
Decision-makers are more likely to give you the green light if they can clearly see how your strategy ties in with theirs. Don’t just think about the success of your marketing campaign in terms of hitting individual metrics. Frame your efforts in terms of how they will support company-wide objectives and generate positive results for teams across the organization.
Here are some tips to follow when setting and aligning your marketing goals:
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Balance ambition and realism. Craft a narrative that other people in your organization will want to get behind. Aim to inspire and generate forward momentum, but stay within reason. Promising results that can’t realistically be achieved on your budget is a sure-fire way to lower your budget ceiling next time around.
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Be specific. Identify quantitative metrics that you aim to reach, whether that’s qualified leads, number of referrals, or other measurable aspects of performance.
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Set cost-effective goals. Frivolous spending is something that will immediately stand out to an experienced member of your finance department. Think of this budget as coming out of your own pocket. Which expenses would you cut?
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Give a projected ROI. This can be difficult to estimate. However, you need to give your CFO a ballpark figure that helps make the case for why they should invest in your marketing plan. Working on this calculation is also an exercise that will help you think through your budget and identify strengths and weaknesses.
Addressing Common Concerns and Objections
You may not be able to anticipate every question that gets thrown at you when presenting your budget, but you can set yourself up for success by being aware of some common concerns and how to mitigate them.
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You don’t have enough data. You need to establish a base of facts and numbers that everyone can work from. On the flip side, be careful not to pad your budget proposal with too many details. Every piece of information needs to be relevant and support your thesis.
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You haven’t accounted for all costs. While it helps to reserve a portion of the budget for contingency costs, try to identify as many potential costs as possible. There are hidden costs like agency fees as well as indirect costs like employee time.
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You’re not prepared for change. Business environments are unpredictable, and your marketing budget should reflect this. If your plan is too rigid or relies heavily on the staying power of current social trends, it may fail to capitalize on new opportunities.
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You haven’t involved enough stakeholders. Get others involved in the planning process. This will help you avoid potential concerns and keep decision-makers engaged in your efforts. It’s better to debate the points of your budget early on rather than at the final budget approval meeting.
Leveraging Technology and Tools for Budget Optimization
Technology plays a crucial role in optimizing marketing budgets and maximizing ROI. Not only do automation tools increase the speed of budgeting processes, they can also improve accuracy, standardize formats, and ensure greater transparency for everyone in the workflow.
By leveraging various tools and platforms for managing your marketing efforts, you can free up time and manpower to prioritize more creative and human-centered activities.
Here are some examples of different types of tools that can help you optimize your budget. When choosing marketing resource management software (MRM), look for one that can handle multiple categories.
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Marketing automation platforms ? Helps you manage and optimize campaigns by automating tasks and workflows such as lead nurturing, email marketing, and reporting
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Budgeting and forecasting software ? Allows you to create detailed budgets and forecast future spending. Some platforms offer real-time visibility into budget allocation and spending management.
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Analytics and reporting tools ? Makes it easier to track KPIs and measure the effectiveness of campaigns. Essential for creating data-driven budget proposals.
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Content management systems (CMS) ? Allows content marketers to organize, publish, and manage their content effectively. This is key for improving efficiency, reducing cost, and ensuring brand messaging consistency.
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Social media management tools ? Indispensable to social media marketers, allowing you to schedule posts, track engagement, and analyze performance across multiple platforms, helping you allocate your budget to reach target audiences
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Collaboration tools ? Facilitating real-time collaboration is essential for marketing success. Use these tools to communicate with key stakeholders throughout the budgeting process and share reports on progress.
