As firms divvy up budgets for next year, I thought it a good time to share a framework that firms and practices can use to evaluate and prioritize marketing programs before money starts flying around.
First, it is important to delineate Programmatic marketing spend with Strategic marketing spend. Programmatic spend encompasses the specific program tactics (events, ads, email, tradeshow) and marketing channels at your disposal. Strategic marketing investments are allocations to broader, strategic revenue driving objectives (i.e. generating demand, generating leads, supporting sales or developing new products and services). And, yes, they are different.
LEARN HOW TOP FIRMS ALLOCATE MARKETING INVESTMENTS: The Smartest Way to Allocate Marketing Investments to Drive Growth
Most firms focus on programmatic spend first.
Firms often ask “What is last year’s trade show going to cost us this year?” “What will the client event cost if we move it to a nicer venue?” “Industry benchmarking reports say that other firms are increasing ‘content marketing’ budgets by XX %. Shouldn’t we do so as well?” High performing firms don’t start with Programmatic spend and questions like this.
Instead, top firms begin by answering the correct strategic questions and allocating Strategic marketing investments first. Why? You cannot have intelligent Programmatic spend without clearly delineating marketing’s desired strategic impact. Let me give you an example.
I was approached by a managing partner of a research firm to discuss rebranding his firm in the upcoming year. The firm’s business had been slowing the past 2 years and the leadership had allocated budget for a brand “refresh.” (If I had a dollar for every time I…) When I asked why the team thought money should be invested in a rebrand, the firm leader responded that there were younger buyers who were unaware of the firm and its services. The team thought an updated, “cooler” brand would attract these new buyers. I met with the team and quickly discerned that the firm’s brand was not the problem. The issue was that the firm’s traditional market had shifted and the firm’s qualitative approach to research had been supplanted by newer, faster, cheaper and more reliable quantitative approaches. Investing in a “rebrand” would have wasted precious time and resources that would never have achieved the desired goal.
RELATED: When It’s Time to Reinvent the Firm
The goal was growth. The strategic objective and overall Strategic investment to be made was Demand Generation. The solution was to build the brand’s “relevance” in the new space. Relevance is achieved by investing in an intellectual capital agenda that offers both a unique perspective on an issue and its solution. That means strategically investing in an IC agenda–not wasting money building brand “awareness” or “coolness.” Allocating the Programmatic spend to increase the firm’s relevance was straightforward after identifying the desired buyer, markets, ideal client profile and the starting point. (Note: You cannot generate leads without relevance, so setting Lead Generation as the primary strategic objective would misallocate resources as well.)
One of the many great benefits that have accompanied the complexity, intensity, and speed of modern marketing is the strategic marketer’s ability to measure virtually everything she does.
Regardless of the channel, each activity and its contribution to business goals can be measured. In the exhibit below, I breakdown Programmatic spend into four categories based on a program’s Cost and its Impact (i.e. its demonstrated/measured results in achieving its Strategic objective).
The 4 Programmatic Marketing Spend Categories:
Prodigals: High cost, low impact programs are the first to be eliminated or refined. Eliminating or modifying them frees up budget to allocate elsewhere immediately.
Distractions: Low cost, low impact programs that may not cost much money. Like gnats flying in the face of an infielder, these programs distract focus from the game. Eliminate them now.
Prima Donnas: High cost; high returns. These programs work in achieving their objectives, but they consume a significant portion of your budget. Look for cost efficiencies or synergies to make the programs more productive.
Gems: Low cost, high return. These are a firm’s and a strategic marketer’s dream programs. They are client-focused, can be difficult to initially advance, but the best marketers live to create them. Leverage the learning where possible across the firm and don’t become complacent. A competitive market will copy you quickly.
Once you have delineated the strategic objective, Marketing’s activities (i.e. Programmatic spend) can then be quickly and easily determined. Once a Strategic budget is allocated, legacy Programmatic spend can be evaluated for future/ongoing investment or reallocation.
By setting goals, measuring every marketing program and regularly mapping each on a matrix like the one above ensures that your Programmatic spend is aligned and delivering on your Strategic investments.