Fractional CMO Services:
Marketing Budget
Planning and Optimization

As multi-channel marketing continues delivering unprecedented ROI to companies, more dollars are going into marketing than ever before.

According to a recent CMO Survey, the average business now spends 11% of its total company budget on marketing. For some SaaS companies in rapid growth mode, sales and marketing spending is upwards of 50% of revenue (Source: Jeanne DeWitt, Head of North America, Revenue & Growth, Stripe).

But the process of creating a comprehensive multi-channel budget and assembling the cost to execute day to day still remains difficult for many marketers, CEOs and CFOs.

They may toil over whether the budget is too much or too little relative to their revenue and growth attainment goals; if their marketing budget is properly allocated to different marketing, sales and technology needs; and how to best execute and run an integrated marketing plan using internal headcount versus external talent.

When setting your marketing+tech budget, it’s important not to short-change your business. Investing the right amount, aligned to the growth objectives – and in the right team – will help you get off the ground and sustain the necessary multi-channel marketing programs that will take your brand to the next level.

Understanding the Marketing+Tech Landscape

Today, marketers have more channels, choices, opportunities, vendors and techniques than ever before.

What should be considered a plethora of available channels to reach one’s targeted prospects and buyers can be confusing, complex and daunting. Where do you start? What tactics and channels are right for your company? Should they be staged or launched all at once?

Navigating these choices is where Moving Minds can help to sort through the clutter and find the right combination of marketing channels, techniques, messages and delivery systems.

As you develop an integrated marketing budget, it’s not about a series of disparate tactics employed occasionally as experiments to see if they deliver a return within a short run or a single placement. Rather, your investments should map to your strategic objectives and provide a comprehensive, multi-channel approach that encompasses the right mix of relevant and targeted channels – including strategy, brand, SEO, content, data, systems and social. Undoubtedly, an integrated approach will be higher than a bare-bones budget with only enough for a few ad hoc projects.

However, the difference in ROI is drastic. According to Gartner research, integrated marketing campaigns across 4+ channels outperform single or dual-channel campaigns by 300%.

Meanwhile, piecemeal marketing can lead to a vicious cycle that eats away at your budget. Since your marketing wasn’t optimized across all platforms, the ROI is much lower. As a result, company leadership may lose faith in marketing and allocate even less budget.
The end result is a barely functional marketing program that doesn’t benefit your bottom line.

ALIGNING YOUR BUDGET TO A MYRIAD OF FACTORS & GROWTH GOALS

Everything starts with your company’s desired growth trajectory in the form of defined and measurable KPIs.

KPIs should map to the various stages of the customer journey, which may include: awareness and education, inquiry and enablement, conversion and acquisition, retention, utilization, satisfaction and upsell.

There is no hard and fast rule when it comes to marketing budgets. Every company is unique and as such requires a budget that is specific to their markets, desired revenue targets, industry, competitors and company stage.

It’s always helpful to see what other companies are doing. And, in general, they are increasing their marketing budgets. In particular, there has been a major spike in dollars spent on marketing technology. Marketers are currently allocating 29% of their budgets to martech versus 24% for paying internal staff.

Looking at competitors in your specific industry is even more illuminating, as marketing budgets vary greatly by sector. According to the CMO Survey, consumer packaged goods companies allocate the largest percentage of their budget to marketing (25%), followed by consumer services, software tech/biotech, and communications/media.

Breaking Down the Integrated Marketing Budget

While the specifics vary by each industry and brand, your integrated marketing budget is generally divided into three major brackets:

1. Talent: the marketing experts, either internal staff, external agencies, or a combination of both, who will drive you marketing programs

2. Tools: the martech systems, platforms and tools that will serve as the foundation or infrastructure to scale your company’s growth and automate business processes

3. Advertising: the paid channels required to expose and distribute your messaging and value proposition to your targets markets and prospective customers (and how wide or narrow those markets are)

Although advertising costs and martech tools are usually accounted for in marketing budgets, talent often isn’t. Less than half of the companies in the CMO Survey included expenses for marketing employees in their budgets.

And that isn’t something that can be ignored. Because the costs of a full internal marketing staff can more than double your budget.