2013 is a tough year for marketers. Competitors are slogging it out in insipid growth markets. And marketing budgets are under pressure, getting downsized just when they are needed the most to drive demand and pull ahead of competition. If you own any portion of a marketing budget you are likely starting with a number lower than what you expected and living under the gun for further cuts if top-line numbers are soft during the year. Here are some ideas we are seeing some marketing leaders use to defend their marketing budgets:
- Plan spend around 3-5 strategic initiatives: One of our clients, the CMO of major Healthcare services business, starts the defense of the marketing budget in the way he builds the plan. Instead of building his marketing plan around a bunch of marketing tactics – a mobile experiment, a bunch of promotions, the usual events – he plans instead around 3-4 strategic initiatives (e.g.. launch of a new product, addressing a particular segment opportunity) and plans integrated tactics around each initiative. It is easier to estimate the revenue and profit opportunities associated with each initiative and therefore to build a business case for each initiative. If ever budgets come under pressure the conversation becomes not just about tactical spends but about the impact that cutting initiatives will have on the year’s revenue and margin.
- Don’t forget the bottom-line: Too often marketing spends are conceived with an eye on demand-gen or sales support. In tough years, these can be dismissed as “nice-to-haves.” However marketing can also play a substantial role in bolstering price and preserving margins, especially in tough competitive markets ranging from commodity chemicals to smart-phones. Look at every initiative in your plan and identify how it could play a role in “saving the year” instead of “increasing sales.” This will likely re-position the spend as a must-have.
- Use learning initiatives to find efficiencies: Often experiments and learning pilots are positioned as ways in which to address consumer or industry trends. However there are also savings potential in marketing spend by shifting to highly targeted channels. Experiments are likely to be more palatable if they pave the way for spending marketing $s more efficiently downstream.
Finally, do not forget to market internally. Communicate proactively, often, and well in advance on new marketing initiatives and the value they will provide to the business. Such programs get a broader-base of support and are harder to cut.
Please contact us for further discussion on this subject or for more information about EMM Group.