Marketing budget is an area that comes with plenty of advice about what to do. Seemingly everyone has an opinion on the best channels and tactics to invest in to achieve success.
But what about what not do to? Which errors in judgment lead to inefficient spends in the short term and strategic failures in the long term?
To find out, MDG advertising went through recent research reports and analyst evaluations to see where businesses tend to go wrong most with their marketing budget.
Here is what they found as well as in infographic they created, 5 Big Marketing Budget Mistakes to Avoid.
1. Beginning with Bad Data
Every marketer knows that marketing budget planning is both an art and a science. It’s a given that some choices will be based on hunches, while others will be based on knowledge and evidence.
What’s often overlooked, though, is that many of the analysis-driven decisions end up being no better than the guesses. Why? In large part because of poor data quality.
- Companies believe that 32% of their data is inaccurate, on average (Experian)
This unreliable data, which ranges from imprecise analytics dashboards to major gaps in customer databases, connects directly to bad budget choices.
- 91% of firms believe that poor data leads to wasted marketing spend (HubSpot)
The effectiveness of your marketing budget is hugely dependent on the reliability of your initial assumptions. It’s impossible to plan for the future without properly understanding the present.
2. Failing to Coordinate with Sales
To be successful, a marketing campaign must help its business. No amount of engagement or buzz matters if there’s not some direct impact on revenue.
Despite that simple fact, many marketers fail to deliver what their partners in sales want.
- 50% of salespeople are not satisfied with their firm’s marketing efforts (Knowledge Tree)
This disconnect is mainly rooted in two issues: marketing and sales don’t work together closely enough, and salespeople don’t believe marketers’ success is linked properly to revenue.
- Both marketers and salespeople say the biggest issue separating their two departments is communication (Harvard Business Review)
- 55% of salespeople believe marketers are not measured by results (MDG Advertising)
A marketing budget should be developed in conjunction with other departments, especially sales. Moreover, each spend should be directly connected to an expected business outcome.
3. Underinvesting in Proven Workhorses
For most marketers, there are a few tried-and-true core strategies/channels that continue to deliver superb results year after year.
A good example of this is email marketing, which remains a cornerstone of many firms’ marketing budget.
- 52% of marketers say email is one of the most effective channels they use (Digital Doughnut)
- 91% of marketers say email is essential to content marketing success (Capterra)
With proven workhorses like email, the instinct of many marketers is to maintain or lower spend. After all, if it’s not broken, why fix it?
- 54% of marketers plan to keep their spend on email the same or decrease it in 2017 (Content Marketing Institute)
The flaw in this reasoning is that returns on effective channels tend to diminish over time without continued attention.
Even with an approach like email there are new evolutions—from deeper personalization to richer automation—that can dramatically improve effectiveness. That’s why it’s important to continue to increase investment in what’s already working.
4. Underestimating the Speed of Change
On the other end of the spectrum from the proven workhorses are emerging platforms and formats.
For many marketers, it’s a struggle to see how these new channels can help their business in the near term, so investment gets pushed for a later date.
The problem with this approach is that change increasingly happens very fast and at huge scale. Just look at the seismic shift in advertising over the last decade:
- In 2007, digital accounted for 8% of total U.S. ad spend and print accounted for 38% (Econsultancy)
- In 2017, digital is projected to account for 38% of total U.S. ad spend and print for 12% (Econsultancy)
There are any number of fresh technologies that could see similarly rapid rises in the coming years. For example:
- 2.6 billion consumers worldwide are expected to be using messaging apps by 2020 (Tech Crunch)
- Revenue from virtual reality and augmented reality products/services is projected to increase from $5.2 billion today to $162 billion in 2020 (Business Insider)
Spending some of your marketing budget on unproven approaches may be difficult to justify, but it’s essential. By embracing what’s new, you’re setting up your team and firm for future success.
5. Evaluating Too Little, Too Infrequently
How can you tell if your marketing budgets are delivering as expected? The only way to know for sure is to evaluate its effectiveness.
This starts with looking at the foundation. It’s not enough to develop a budget and sit back; to achieve consistent marketing success, you must regularly check whether your strategy is sound.
- 49% of marketers say strategy issues hamper their marketing success (Content Marketing Institute)
Evaluation, of course, doesn’t just apply to strategy. To make the most of your marketing spend, it’s necessary to also monitor and test execution. Yet, many firms fail to do this well.
- 70% of companies don’t test marketing campaigns with consumers regularly (Harvard Business Review)
- 74% of marketers believe their analytics tools could be better utilized and integrated (HubSpot)
The only way you’ll know if your marketing budget is successful is to review both strategy and execution consistently. Ultimately, devoting time and money to ongoing evaluation and testing may be the most important investment you make.
To find out more on how to avoid common pitfalls, check out the full infographic, 5 Big Marketing Budget Mistakes to Avoid.
Does your company make or avoid these mistakes? Are you looking for a strategy to achieve success with your marketing budget?
