Almost Half of Marketers to Boost Budgets This Year
OK, before you jump to the conclusion that the headline for this article is blatantly self-serving, let me explain the madness to my method. This is the verbatim headline from a newsletter that just came across my desk. It was referring specifically to B2B marketers, but I'm sure B2C brands are feeling upbeat as well.
Here are some of the key findings of BtoB Magazine's "2013 Outlook: Marketing Priorities and Plans" report.
- 48.7% of B2B marketers plan to increase budget this year (up from 40% last year)
- The top goal is demand generation/customer acquisition (69.3%), followed by brand awareness (17.6%) and customer retention (13.1%)
- 67.2% plan to increase spending on digital marketing with the top priorities being website development, email marketing, social media, online video and search in that order.
- Although mobile does not appear to have the same urgency as for B2C, it is still growing in importance with a third of B2B marketers planning to increase their activities in this arena in the coming year.
These findings are interesting on many levels. But the underlying takeaway for me is the importance of having a budget that is more than a wish list, but actually an objective-based process strategically aligned with the organization's marketing plan. Sadly I don't believe this is the case for many marketers. Every year about this time, I seem to have a number of discussions with current and prospective clients on this very subject. And I frequently find that marketing budgets are, at best, based on arbitrary sales percentages, or, at worst, a purely subjective allowance of whatever is left over after operational expenses are allocated.
The percentage of sales methodology is, by far, the most common. The problem is that it is based on industry norms – a composite of what everyone else is doing. It inherently assumes that all those other organizations have the same objectives and needs, target audience, size of market and marketing sophistication that you do. And, if heaven forbid, one has a bad year, then even less dollars are available for marketing than previously. Thus can begin a potentially disastrous downward spiral.
In marketing textbooks, the intuitive approach to budgeting is called the "arbitrary and affordable" method. I believe the drawbacks to this approach are obvious, yet it is surprisingly commonplace and speaks to the organization's lack of faith in marketing as an investment.
If it isn't obvious by now, my money is on an objectives and task budgeting process. What do you want to accomplish with your marketing in this coming year? What do you need to do to accomplish those goals? What will it cost to adequately address those tasks?
As business people we spend a significant amount of intellectual capitol on strategic planning. Maybe it would be smart to approach budgeting the same way.
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