5 Tips for Justifying Marketing Budgets More Effectively

While Gartner remains optimistic about the outlook for marketing budgets, there’s a sense that a general tightening of the belts will require greater justification of budgets in the wake of Coronavirus. The economic forecast for many industries (and countries) is bleak, and with so much lingering uncertainty, those who control the purse strings will need to know for sure that money is being spent wisely.

While we head, in many ways, into uncharted waters, there are some time-honored tactics you can use to justify your marketing budget more effectively to convince your senior stakeholders of its worth.

1. Explain what the opportunity is and why it’s worth the cost

This one almost goes without saying; your management team is going to want to know what they get out of spending all that money. Make sure you’re ready to outline exactly what your organization stands to gain.

Are you going to increase your market share? Increase profit margins? Drive customer engagement? Whatever it is, make sure you emphasize that the opportunity aims to improve a business metric. Increasing followers or subscribers is good, but it’s unlikely to sway opinions in the same way that saving or making money will, so make sure to stress what ROI your budget will offer and how it will boost your KPIs.

It’s also likely that if you’re asking for more money, there will be funding cuts elsewhere. Be ready to list the benefits of your investment over the one it’s replacing. This shows an awareness of overall business needs and helps to define your budget within those needs.

2. Invest in the trends

Times change, and so do trends. It’s highly unlikely that what worked for your previous budget will work for this one. Having an evolving knowledge of what makes the world tick is crucial to successful marketing, so you’ll need to know what’s working right now and what’s coming around the corner.

When it comes to your budget, you need to be able to define how your spending will tap into these trends and demonstrate the power of doing so to your boss.

This can be challenging at times, because you’re essentially trying to convince someone that you can predict the future, so have data ready. Investing in trends is about anticipating evolving consumer preferences and meeting them where they are, so if you can clearly explain how your budget is going to enable your organization to do that, you’ll be more likely to bring your senior stakeholders round to the idea.

3. Explain the agility of your new budget

We know things change, and they’re probably going to change month-by-month over the year or quarter that your budget covers.

You need to be able to clarify how your budget could be tweaked if it’s not working. Even better, if you get a few months in and find that it’s working well, how can you improve on it? Highlighting the agility of your budget will give your boss confidence that you’ve considered all outcomes and provide the reassurance that things can be handled if they don’t quite go to plan.

Making your budget more open-ended and showing that you’re willing to make the effort to evolve and adapt to a more profitable result creates an invitation for ongoing dialogue. In some cases, you might even leave your budget meeting with even more money to play with. 

4. Learn from your previous budget

Before you put your new budget together, go over your last one. If there’s anything in there that worked really well (and data to back that up), bring it forward into your new budget. Similarly, there might be some strategies that underperformed, so you’ll want to think about dropping them this time around.

Essentially, look to your previous budget to identify where you could allocate money more effectively. Demonstrating to senior stakeholders that you have the self-awareness to review, revise and course-correct your marketing strategy will impress them and inspire confidence in your new budget.

5. Present the numbers from your competitors

No one wants to be left out, and business leaders are the same. Gather data from other companies in your industry (or even other departments within your organization) and use it to show that your costs are well within the norm. Alternatively, if you’re asking for more, point to performance metrics that will justify the extra spend.

Your bosses will know that if your competitors are investing a lot more in marketing than you, it’ll put you at a disadvantage when it comes to attracting and retaining customers, so having these numbers to hand will really boost your ability to justify your marketing budget. They’ll help to contextualize the current market landscape and ignite the competitive nature of your senior stakeholders.

For example, if your management wants to commit 10% of overall revenue to marketing, but your nearest competitor is allocating 15%, highlight this and why it could lead to your organization falling behind.