I just returned from whirlwind tour of Asia and the a short speaking engagement in Poland and I realized how disconnected the marketing budgeting process is from the measurement of marketing effectiveness.
The missing marketing science
Marketers typically build a budget based on how they want to allocate their precious budget dollars against their assumed budget. They have some key events pre-defined, they know they will be spending a certain amount on a new product/brand launch and the rest is sprinkled between the various media based on last year’s budget. If they’re lucky, they take the prior year’s anecdotal successes and allocate a little bit more to those marketing activities that they believe were actually more effective than the rest. Unfortunately there is no science involved. This applies to both business-to-business marketers as well as consumer marketers.
The new objectives-based approach
Marketers must more concretely state their marketing objectives before they start to build their budgets. What is it that the corporation wants to achieve, in terms of revenues, profits, market position and brand and how can the marketing budget best achieve this? And a big component of this process has to be the inclusion of a process to measure the success of marketing, both qualitatively and quantitatively. One new component of the budget for many marketers now needs to be the measurement of marketing’s effectiveness. Only with this new line item in the budget can we know that we are serious about measuring our effectiveness and driving improved results based on data as opposed to gut feel or intuition. We can finally connect the dots between marketing objectives, budgeting and marketing effectiveness.
If you’re interested in learning more about how to build an objectives based marketing budget, take a look at our new marketing budgeting workshop at www.marketingbudgetingworkshop.com. Or if you have any thoughts our qu3estions on this topic please let me know.
Comments