How to Save Your Marketing Budget – Ideas & Solutions to Keep Your Budget
In regards to work and these trying times, I am sharing with you some information on how to respond to one of the most pressing concerns marketers have at the moment: preserving the marketing budget.
We are seeing clients who persevere now get a higher share of voice and higher ad placements.
If you can maintain, do so. Now is a great time to increase performance (people are spending more time online at the moment).
In these turbulent times, I find it essential to return to guiding fundamentals and principles. For IMWT, we hold the following principle as true:
Most of us do not have an answer as the environment is too dynamic but working on a contingency plan and measures to prevent loss of employment/income should be regarded as a high priority.
Yet, we recommend having honest conversations with your team and suppliers early. Most folks want a degree of certainty as to where they stand in this environment. Not providing an answer can lead to distraction and distrust.
What we’ll cover:
- Help you answer tough budget/value/scope questions
- Considerations to bring to your management team
- Revise scope if needed/share the load
- Support/training in WFH/remote setup
Help to answer tough budget/value/scope questions
How do I save my marketing budget?
Most marketers are now facing this inevitable question from their finance department:
Should we cut the marketing budget? Or Where do we reduce the marketing budget?
Marketing as a revenue centre
This hard question to answer can be a blessing in disguise. It will push consideration to treat marketing not as a cost centre but as a revenue centre.
Cut marketing by X%, anticipate a further drop in sales by $Y.
Drawing on the principle of loss aversion can be a compelling argument against cutting marketing spending.
At the same time, we highly recommend a balanced approach and taking a good hard look at what drives revenue and value (current and future).
Such constraint forces us to reconsider where our Pareto principle lies.
I have found that many marketing activity calendars are filled with busywork, often a result of adding test projects year after year that become perennial features. Reviewing what drives sales, what activities turn leads/interest into sales, what contributes to brand awareness, is an opportunity to free up time and do better work on fewer items.
Should we cut? Prove to me that our spend takes into account the current situation.
In this scenario, the conversation revolves around value perception and validating that all decisions made in a growing market are relevant in a contracting market. We found that it is always wise to have a few projects to be identified as potential cost savings or deferral in spend to demonstrate consideration.
Usual suspects for cuts or revised spend:
- Unused/low use tools and SaaS products
- New projects
- Busywork campaigns
- Campaigns with hard to measure return (some display, events, top of the funnel activities)
- Low-yield campaigns
How Do We Save Our Marketing Budget?
If you are in this situation, we are sorry to hear as it must hurt. You are likely to still be liable for providing performance with far fewer resources in a degraded environment.
Where to save marketing budget is an exercise in identifying where most of the value is realised, where savings can be created in the short term and what the opportunity cost is in stopping activities/campaigns. All of that, while backing yourself up with credible numbers.
If you are struggling to create time and headspace to run an analysis on spend and impact, we can help with this. We have several analysts and senior marketing folks we can deploy. We will assist with providing the relevant numbers and consulting with you on where to invest your marketing budget and where cost savings are. We are happy to carve some time this month to help you.
Our recommendations for must save resources and activities in your marketing plan
We recommend cutting human resources as an absolute last resort.
The cost of rebuilding teams (both internal and service providers) is very high once the crisis has passed. Even if it’s a matter of keeping the lights on, marketing teams that have retained knowledge and competencies during the crisis will be able to outrun those that are looking at rebuilding their marketing function.
Loyalty to your team members goes a long way, and people remember who had their back during hard times and pay it back with effort, commitment and their best work. This is as true for IMWT internally as it is for our clients who keep us during uncertain times.
2. Always on campaigns
Monitor performance and dial campaigns up/down based on activity and performance.
Reconsider range and offering and whether current search and interest push consumers towards more cost-competitive products rather than value-based products.
3. Automation/Existing Martech
You probably have a CRM, marketing automation or several pieces of kit that were set up but may not have been used to their full extent.
A pause in the busywork can clear your team’s headspace and schedule to maximise your existing assets.
4. Brand/Share of voice
Brands that continue advertising during a downturn will steal market share from those rushing to take cover.
See below for more details.
Considerations to bring to your management team
Boom time for digital activity
With fewer people walking into brick & mortar stores, socialising and going to events, people will turn to their devices, thus increasing the population’s digital footprint.
Now more than ever, people are absorbing information and engaging with digital content.
Key statistics from Nielsen for coronavirus impacts on social media include:
- 66% of social media users believe their social media usage habit will increase in the event they are confined to their home due to the Coronavirus
- 64% expect their usage of YouTube to increase; only 2% expect a decrease
- 63% expect their usage of Facebook to increase; only 2% expect a decrease
- Folks are still searching
The screenshot below was taken today from Google trends; people are still searching for cruises despite the poor publicity in the recent month. While the overall search pattern experienced a decrease, the queries have shifted from this year to next year.
Search is a 0 sum game
Your gains or losses are balanced by the gains or losses of others in the Search Result Pages of Google whether in paid or organic.
Search isn’t just your “money keywords”, it drives traffic to your site throughout the customer journey (middle of the funnel). Having well-designed middle of the funnel content and Search performance coupled with a Display/Youtube retargeting campaign means you can easily capture users for a much smaller cost of acquisition.
- Middle of the funnel search traffic drives interest/research-based traffic
- Retargeting on YouTube expands on the product benefit & USPs
- Retargeting On Search Ads for ‘money terms’ with improved Ad messaging converts more effectively.
Why brands should resist the urge to cut ad spend
Ad spend is usually the first casualty in a turbulent market. Here are a few elements to consider and share with your management team as to why keeping marketing activities is important.
A Bain & co study shows that companies that refrained from dramatic cost-cutting measures gained market advantage during the recession and fared significantly better after the crisis passed.
1. Reduced “noise level”
In the month leading up to the COVID event, one of the concerns from marketers I met at events was how to get cut-through. With a number of brands forced to bunker down and close all activities, the “noise level” in a brand’s product category can drop when competitors cut back on their ad spend.
2. Drop in the cost of advertising
The cost of advertising drops during recessions, creating a “buyer’s market” for brands.
3. Direct marketing still works
Studies show that direct mail advertising, which can provide higher short-term sales growth, increases during a recession.
4. Gain “share of mind”
Brands that do cut their spend during a downturn lose their “share of mind” with consumers, with the potential of losing current – and possibly future – sales.
The most famous example happened in the 1920s. Post was the category leader in the ready-to-eat cereal category. During the Great Depression, Post cut back its advertising budget significantly, and rival Kellogg’s doubled it’s advertising spend, investing heavily in radio and introducing a new cereal called Rice Krispies, featuring “Snap,” “Crackle” and “Pop.
Rethink marketing objectives to match with demand
While brands can capitalise on the containment situation, it is essential to reconsider messages and marketing objectives to match the situation. Management teams may still be looking at marketing to increase sales for products and services, yet many consumers won’t now risk spending at a time of uncertainty.
Even when the situation is troublesome, such as in the travel sector, we are encouraging a shift in objectives from making a sale to capturing an audience ready to pounce when they feel confident to buy again. With weeks, if not months of being locked down, most folks that cancelled their travel plans will be ready to jump on a good deal and travel again.
Some product lines may also be more attractive than others during these uncertain times. Domestic travel is likely to benefit first from a lack of global mobility. We have seen this for our Australian clients, where customers are reconsidering international travel in favour of local trips.
What We’ve Done
Revised scope as needed
For clients who asked us where we could create savings, we were able to revise our scope and engagement levels while maintaining the existing team with knowledge and expertise of our clients’ campaigns and operations as much as possible.
Carry the (work)load
For a number of our clients, a hiring freeze and even dismissal of the internal team members left remaining team members shorthanded at a time where more is required from the marketing department. For these clients, we adjusted scopes and deliverable to allocate resources directly to our client’s team to take care of marketing operations, running many ad-hoc tasks and taking some of the workload off our client’s shoulders.
For some clients, we go as far as acting as product manager taking responsibility for the day to day, running of the digital channel, ensuring the work is delivered, liaising with internal stakeholders (legal, brand, tech, Senior management) to ensure performance. Our scope even includes recruiting the new team once headcount freeze is lifted and recruitment has resumed.
Provide support/training in working from home/remote setup
For most teams, working remotely is a rather new setup. And with all-new structure comes teething problems, gaps in communication, adjustment to the new format. IMWT has operated as a distributed team since 2013, here we share some of the learnings we’ve gathered in our seven years of experience.
I recommend watching this 1hr crash course in remote management produced by Automattic (the company behind WordPress), this gives the basic principles we use on a day to day basis.
If you are getting stuck, feel frustrated with current productivity or not quite sure how to approach a task you would normally do in person (interview, performance management, negative feedback, building rapport), feel free to reach out.
We love to talk about this topic and hopefully, we can share some practical tips you can use straight away.
A positive note to close
This disruption is an opportunity:
- To demonstrate how your team adds value to your organisation
- To rethink what you do, why you do it and how
- To shake up the status quo, get rid of busywork and create better work
- To forge stronger relationships built through harsh times
- To be reminded we work alongside great people, caring for one another