Building the Best Marketing Budget for Todays B2B Environment

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For most marketers, budgeting and planning for the next year is a substantial undertaking. Now more than ever, marketing is held directly responsible for revenue and more deeply accountable for business metrics. Download this white paper for expert advice on building the most effective marketing budget possible.

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During the last few years, business has changed for marketing. In part, marketing is under the same strain as other departments as companies strive to do more with less. But there’s more to it. Now more than ever, marketing is held directly responsible for revenue and more deeply accountable for business metrics. Marketing is finding its staff and resources are more involved farther into the so-called “funnel.” This means less demarcation of when and where it hands off to sales and more overlap with the sales team in nurturing leads to ultimate revenue. Additionally, CEOs are pressing their marketing execs to report where they are in the pipeline and how much revenue can be attributed directly to marketing’s efforts.

On the flip side of the same coin, marketing has had to change the way it plays the game because today’s consumers are much different from their predecessors. With more resources at their disposal, the Internet at their fingertips and an arsenal full of research options, this is one empowered group. In fact, a recent study by the Marketing Leadership Council found that on average, buyers are 57 percent of the way through the buying cycle before they’re even willing to engage a sales resource. This doesn’t just turn the screw on sales, it means marketing has to step up and provide more support and creative new tactics to manage the care and feeding of the self-service buyer.

In its first-ever Global Chief Marketing Officer Study, IBM found that CMOs and CEOs across all industries see market and technology as the two most influential forces affecting companies today.

All of this mandates an approach to your budget that’s judicious and strategic. If 2012’s trends continue, it will likely mean a bump up in dollars with a significant portion going toward digital marketing, often with some form of improved marketing automation. But whatever final shape those dollars take, here’s our advice for how to ensure the most effective marketing budget possible.

Get Buy-In

First things first. Don’t assume your company’s C-level execs understand every detail behind the multiple facets contributing to today’s B2B marketing world. More importantly, don’t assume they immediately understand how marketing and sales roles have shifted or how that shift affects your company. That education is up to you. Get time on the appropriate calendars and ensure there is a general understanding of today’s digital marketing dynamics.

Before you go eyeball to eyeball with the executive ranks, spend some time talking about the organization’s goals in general. Make sure you’re current on the targets your company is working to hit and the key strategies behind those objectives. This is a critical first step in establishing that marketing’s goals, which will be reflected in your budget, are in line with the company’s goals. This conversation should also produce some excellent functional knowledge that can later be used when pitching your proposed budget.

Finally, the technology that serves as the foundation for your digital marketing platform isn’t going to come for free. Whether such a system is already in place and your team needs to ramp up skills on how to use it more effectively, or you’re about to make a first-time purchase, getting buy-in from top management about why this is necessary and how it will help improve marketing’s effectiveness (and ultimately the bottom line) is important.

Plan for Technology's Increased Role in Marketing

Virtually every marketing department should have a defined budget for technology in their 2013 plan. In the past, those budgets may have existed in or been rolled up with the IT department, but technology’s function within marketing has become so multifaceted, specific budgets within marketing are emerging.

Technology and its benefits affect every aspect of how marketers successfully do what they do. The myriad technologies available to marketing today affect content, interaction with prospects, efficiency, benchmarking, accountability and ROI. No wonder Gartner found that by 2017, the CMO will spend more on technology than the CIO.

In presenting that report via the January 2012 Webinar, Laura McLellan, Gartner’s vice president of marketing strategies, said, “All of us who work in marketing organizations and follow marketing see that today, digital is reinventing marketing. Put another way, technology and transparency are changing marketing.”

Among other things, McLellan was referring to the marketing automation solutions that allow companies to increase the intimacy and engagement with clients by managing that interaction based on behavior and existing customer data. Furthermore, truly integrated marketing automation software provides insight into how much influence various efforts are having on outcome, an invaluable metric for reference when the time comes to make the hard decisions about what stays in a budget versus what gets the axe.

In its “Marketing Tactics of Top Tech Performers” report, Forrester Research concluded that a standout commonality of leading tech companies is that they have all embraced marketing automation.

In its summary, Forrester communicated the benefits beyond the scope of just tech companies: “With deep insight into buyer behavior and engagement, and (increasingly) sophisticated analytics, it is becoming possible for marketers to move beyond simple attribution models and gain deeper and more complete insight into the marketing performance of various marketing tactics and campaigns.”

Email is an excellent example of how smart technology can improve results. Using the latest in behavioral analytics, marketing automation solutions can help marketers set up actively evolving targets for precisely placed email campaigns. If triggered email messages garner a click-through rate of 119 percent higher than normal messages5 , adding personalization and dynamic offers have huge potential pay-offs. Similarly, a recent report by Sirius Decisions found that when augmented by a marketing automation program, social media activity connects with contacts for aggregatelevel social media reporting on activity and behavior.

In the era of the empowered consumer, the batch-and-blast method no longer works. Instead, marketing is now obligated to look at all the data points across the entire customer existence and combine that information with behavioral analytics to make its communications personalized and relevant. Because marketing automation does that and so much more, it behooves every CMO and marketing manager to make the case for putting the right technology for their organization in place.

Yet most B2B organizations are not using a marketing automation platform. Sirius Decision also reported that only 18 percent of B2B companies have implemented one. Further, that same report found that of those who have purchased such a system, 85 percent felt they were not utilizing it to the fullest potential.

If you’ve not yet implemented a full-featured marketing automation system, you’ll need to budget for the purchase and implementation of the system. And the more data you have integrated into your installation, the richer, more relevant and more successful your campaigns will be. So you may want to consider getting outside assistance for your data integration requirements. Don’t make the mistake of so many organizations and just look at the price tag for the software itself and ignore the price for data integration and setup, which should include a plan for training your staff over time to use it effectively.

Speaking of your department’s selfsufficiency, even if you’ve already implemented a system, remember to build in money for ongoing training in technology and best practices to ensure employees are up to speed on all the capabilities and actually ahead of the curve. In fact, technology alone will not yield the results you’re hoping for and may even be detrimental to the ROI. In the Sirius report referenced above, researchers found that, “Technology alone — without proper skills, knowledge and processes — will not show measurable returns.” Because companies aren’t using the fullest extent of their marketing automation tools, they’re losing dollars. Make sure your budget reflects the expectation to continuously improve what you’re already doing today.

Plan Your Content and Keep Your Finger on Video's Impulse

In the land of the empowered consumer, there is the expectation that marketing’s efforts will at least be authentic if not all-out dazzling. Therefore, a content marketing strategy isn’t an option, it’s a necessity and most be budgeted for accordingly.

Because strong content is so pivotal in buyers’ decision-making, your content strategy should consider integration across the brandmanagement scope of the organization. In short, you want to make sure your company’s point of view and materials and solutions — how you’re solving customers’ problems — is front and center on search engines and social networks when clients are interested in consuming that information.

Recently, more companies have assigned dedicated resources to content marketing, and this is not a trend that’s going away, because substantive content is crucial to marketing’s role and its contribution to ROI. Some companies are even creating senior management content roles, because content covers such a large chunk of the marketing value chain — from hardcopy collateral to every inch of digital space, including social networking plan dialogue, blog posts and the ever-emerging video component.

Video is definitely a content trend to consider incorporating into your budget. Look for 2013 as the year consumers search for more content in video format. But remember, consumers are seeking out a variety of content, and it all must be smart and relevant. Some may just want a blog post, while others may appreciate a series of white papers. Likewise, many may not want to read anything at all and will only be interested in snappy video pieces. Budgeting for this multifaceted face of marketing will become increasingly important, and for most marketing organizations the content line item, including video, will increase in 2013.

Review Last Year's Results

Hindsight is more than just 20/20; it’s a wonderful educator, and marketing managers must carefully analyze what happened last year. Review 2012 closely and look at where dollars were spent and what worked versus what didn’t — and don’t be afraid to be honest.

In an ideal world, there’s some level of review that’s ongoing throughout the year, but if you’ve waited until budget time to take a hard look at last year’s budget and align it with the actuals, do it with as keen an eye as possible, then have the guts to realize that if something isn’t working, 2013 is the year to just stop doing it.

Review marketing’s 2012 contributions to the sales pipeline and assess what closed the most business, then prioritize those things. This requires candid conversations and honest relationships with the sales team. This should be a business-focused conversation based on ROI, revenue and results (minus opinion and emotion). What will emerge will be clarity on what items you keep and what you cut. If you already have a marketing automation platform or CRM system, use these products to give you fact-based answers.

Carefully Consider Processes, Goals and Benchmarks

Because you began this process with company execs, you should already have information about the organization’s goals. Now is the time to define your inter- and intra-department processes and identify where you might have some gaps. Ensure marketing’s goals line up with the company’s overall objectives and that marketing and sales are communicating well.

This should be an ongoing exercise. It’s much easier to fix problems when they first arise. And good communication doesn’t happen overnight. If your processes are a problem, vow to do better in 2013 — throughout 2013.

The budget-drafting process is the time to clearly document what it is you want to accomplish in the coming year. Next year’s key initiatives should include both the anticipated ROI and what will be required in terms of budget and headcount.

Similarly, compare your budget details and goals to industry benchmarks within your segment. Use any associations or consulting organizations you have connections with to rely on their analysts to review and refine some industry benchmarks. Those aspects will prove helpful in putting your budget together and then defending it to management.

Take a Moment to Think Outside the Budgeting Box

There are a few “outside the box” items you should add to your checklist so that you don’t find yourself in the throes of budget delirium and miss something that could prove important to your department and company.

The first is the rise of boutique agencies. This is in contrast to the days of old when organizations often employed one “agency of record,” which provided a variety of services. Today, there are groups and consultants to provide everything from digital creative work to automated programs to social monitoring or strategy. Consider that one or more of these agencies might be helpful and even cost-effective. If you run the preliminary numbers and see that this is a route to pursue, start interviewing these firms now.

Next, remember to budget for marketing education. This was alluded to earlier, but it extends to every area of marketing’s value chain. Virtually everyone forgets this crucial component, and that is a huge problem. Too many departments are full of self-taught people who have cobbled together bits of information here and there to muddle through. Some reports indicate that fewer than 20 percent of organizations spend more than $1,000 annually on training their marketing staff, and as many as 36 percent spend nothing at all. Everything from workshops about emerging trends and creating better content to training for technology benefits your staff, your goals and ultimately your company’s bottom line.

Finally, take a step back and take a multidimensional view of everything. Slice and dice and look at your budget in a number of different ways to ensure you’re meeting all the needs.

Consider the multiple ways your department reaches its audiences, such as social, events, telemarketing, and branding in general. Look at your marketing segment — your industry along with the business, corporate and strategic accounts that need nurturing. Evaluate by company division, brand and product or service. All of these are aspects that fall under your domain and require appropriate consideration.

Final Thoughts

There are no shortcuts to make budgeting easy, but there are ways to make the most of your time and resources. Thinking through as many aspects as possible, confirming your department’s role within the company, and then putting specific numbers on what you’ll need to contribute significantly toward the common goal of profit, revenue growth and marketing ROI puts you on the right path for a strong, defensible budget that sees results and earns respect for your marketing department.

Finally, let 2012’s lessons result in valuable insight into 2013 for the marketing budget, your staff and your evaluation process going forward. Look for misalignments in dollars versus actuals as well as how your department communicated throughout the year with other departments and management. Adjust the numbers accordingly and hold yourself accountable to an improved system next year. With the same best practices in place for budgeting that you have for marketing, a refined template will emerge that makes this part of the job less challenging and maybe even enjoyable.

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