How to Justify Your Marketing Budget to Management
Even in the best of times, getting approval for your marketing budget can be a difficult task, particularly if yours is a complex sale and tracking direct attribution is fuzzy.
You’ll likely find the path easier if you lay out your plans to include a set of key metrics and parameters that define success.
What Is the Opportunity?
Begin the conversation by outlining the opportunity you see available to your organization and identifying what happens when you win that opportunity. Do you increase market share? Improve profitability? Bump up customer satisfaction?
The opportunity better be based on a business metric improvement. You’re not likely to get far with a discussion of improved process metrics: more subscribers, likes, followers, etc. That said, it is worth tracking these things so that in the future you can point to them and draw a connection between improved engagement and increases in hard-dollar metrics.
You may also consider a defensive positioning — "if we don’t do this, our competitors will." Or, "our competitors are already doing this, and we’re falling behind." I’d be careful with this route, though, as it often leads to defensive thinking. And that leads to marketing resources spent to maintain the status quo. Sometimes that’s the smart path, but it’s not necessarily a popular one.
What Are the Opportunity Costs?
Corporate budgets are generally a zero-sum game. If you spend the money here, that money isn’t being spent somewhere else. You need to demonstrate an awareness of that and be prepared to discuss how and why the investment you are requesting will outproduce the one it is replacing.
How Long Will It Take?
Not all marketing activities are created equal. They have different payoff expectations. (Writing a blog post today won’t likely get you a new customer tomorrow. Launching a new PPC campaign just might.)
Be ready to discuss whether your marketing budget proposal is a short-, medium-, or long-term play and why anything that will take longer than this quarter to realize goals is worth the time risk involved. (Your organization’s culture will influence how important this question is, and perhaps even if recommending a long-term plan is an option.)
What Will It Cost?
This might be the first question out of a manager’s mouth regarding the marketing spend on a specific project, but I wouldn’t address it first if I could avoid it. Better to establish value and expected (positive) outcomes first. Then get into what the total cost will be, whether costs are front-end loaded or more evenly spread out, and whether some portion of your costs are accrued only when progress is being made. The more detail you can provide — particularly details that mitigate risk — the better.
How Can It Be Tweaked?
If it’s not working, what can you change? If it’s working, can it be improved upon? These are critical questions not only to be able to answer, but to get your management team to think about. Why? Because the condition on day one of your new initiative are not going to change, perhaps radically, by day 90.
If you can show that you’re prepared to make the adjustments necessary to keep your efforts pointed toward a profitable outcome, you’ll find greater success in funding your marketing ideas.
Since 1996, Andrew Schulkind has asked clients one simple question: what does digital marketing success look like, and how can marketing progress be measured?
A veteran content marketer, web developer, and digital strategist, Andrew founded Andigo New Media to help firms encourage audience engagement through solid information architecture, a great user experience, and compelling content. A dash of common sense doesn’t hurt, either.
His work touches social media, search-engine optimization, and email marketing, among other components, and he has presented at Social Media Week NY and WordCampNYC, among other events. His writing appears in various online and print publications.
Andrew graduated with a B.A. in Philosophy from Bucknell University. He engages in a range of community volunteer work and is an avid fly fisherman and cyclist. He also loves collecting meaningless trivia. (Did you know the Lone Ranger made his mask from the cloth of his brother's vest after his brother was killed by "the bad guys?")