BUSINESS
Is your marketing working? Part 3
How you should look at your 2022 marketing budget by Trip Jobe, CEO, Rand Inc.
Per Gartner’s CMO survey, marketing budgets fell in 2021 as a percentage of total revenue from 11% to 6.4%. We have talked to several leaders who are still evaluating their marketing budget plans for 2022. The one thing we know for certain is that it’s going to be a fluid market with both opportunities and challenges. So, I want to give you some different ways to look at your marketing spending in 2022.
Starting with the concept of budget
I understand the need to have a plan, and you should have one. However, it is more critical than ever in these uncertain times to have flexibility. My experience is the best business leaders approach the budget to be approximately right in November, but adapt and update as we move through Q1, Q2, and Q3. In this manner, you can hold back 10-15% of the budget as “uncommitted” early on and it can be flexed in or out based on results.
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If you take this approach, also be willing to ask for the ability to flex extra money, if results are exceeding plan! The key is showing leadership that 98% of your budget isn’t spent on day one and gives them more confidence in committing to your proposed investments in marketing. Occasionally, I encounter a leader who will stop spending to stay within budget even though the programs are bringing in sales above budget! This is so crazy and makes little sense. All it does is verify the stereotype of marketing as an expense item. Just as important is the need to build your marketing plans in a way that aligns with how you plan to grow in 2022. I’m sorry marketing leaders, but we don’t grow based on 10% email, 30% SEO, etc. We grow based on a matrix of our customers and products and services.
