Monday, November 15, 2010
Are marketing budgets irrelevant?
I could easily make the argument that finite marketing budgets exist for lazy marketers. That CFOs want them in place because they don’t trust their marketing executives to make good decisions. That, if marketers were 100% aligned with the organization’s financial objectives, they wouldn’t be necessary.
If the bank had a sale on one-dollar bills, and was selling them for the rest of this week at 90 cents each, would you give yourself a budget for how many you could buy? Sounds a little silly, doesn’t it?
So if you find that certain marketing activities are generating a profit for your organization, why would you limit how much of it you could do? Why would you constrain your own growth and earning potential?
This, of course, isn’t as easy to execute as I’m making it sound. But think about how your organization creates and manages budgets. Is it based on finding and maximizing the opportunity against profitable channels? Or is there an arbitrary constraint created independent of the success of growth potential you’ve discovered?
As a marketer, at minimum your job during the fiscal year is to clearly and quantifiably identify where there’s additional and significant, profitable growth potential outside of your current budgetary boundaries. If you’ve found opportunity and aren’t capitalizing on the entire potential simply because of a budget figure put in place weeks or months prior, make a case for the incremental dollars. Because if you’re right, no CFO is going to see that budget request as additional cost center.
If you’re right, it’s simply a short-term loan on additional revenue and profit.
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