As a marketer, you know the drill. Your VP of Marketing drops by your desk. There is a board meeting next week and she needs your spending forecast for next quarter. Ideally, the forecast will be detailed, based on actuals, and *best of all* really accurate. You say, “Sure! Got it”, but in your mind you see images of late nights, lots of coffee, and going through endless spreadsheets — assuming you can find the right version on your hard drive. This is not what many of us consider an awesome marketing moment.
Here is another fun one. You look at your monthly goal for leads and realize you need to run a few more demand generation programs to hit the plan. Then you open your budget document and feel, well, sort of confused… Do you have money or not? Based on the bold number at the bottom of the spreadsheet it seems like you may not, but then you wonder if all of the budgeted $20K was really spent on That Event. And the PPC consultant, didn’t he say he just took out some terms that were not working? Maybe there is money there! But then you come full circle, feel nervous, and decide it is probably better not to spend money you are not sure you have.
If you have never had these things happen you are lucky and have been blessed by the Marketing Gods of Budgets and All Things Numbers and do not have to read further. If you have, then consider this. As marketers, we are rapidly evolving and taking advantage of new technology and ideas for social media, analytics, and email. It is time to think about your budget and process in a different way too. Here are three simple questions to consider:
Versioning – Do you have one system of record?
It is not fun looking in a folder and seeing 10 versions of a budget document. It is hard to know if all changes have been reflected accurately. This can be especially tricky if you are managing a global marketing budget with different currencies. A budget document probably should not live on your hard drive and there should not be multiple versions floating around. It is a good rule to think about “a single version of truth” – so make sure you have one.
Variance – Are you over or under budget?
Do you really know what you have spent and will your number match what accounting has? You may want to spend money on an additional program and it is essential to know if you have the budget or not. It is very important (especially considering how fast teams move today) to have a real-time view of what you are spending and what you have left.
Visibility – Do you have a clear and holistic view of your entire budget?
Think of looking in a fogged up mirror. You can make out an outline but the details are blurry. Your budget and spend to date should be clear. There should be visibility on budgets and forecasts for the day, month, quarter, and year. If your data is not real-time or incorrect it is like driving without headlights. This will impact your ability to forecast for the next year and secure the budget you need.
While budgeting and forecasting is not something most marketers pick as their top passion, they are very important aspects of marketing to understand and execute effectively on. Spreadsheet-based planning is OK and can work for some companies, but it often does not scale as a business grows. Finance has their tools for a system of record and so does HR. Consider looking at tools or approaches that will help your marketing team have their own system of record to accurately plan and forecast (for example our new product Marketo Financial Management). A dedicated solution can have a pretty good ROI when you consider the time and expense of the alternatives.
Want to learn more about how to grapple with your marketing budget? Check out our LaunchPoint partner Allocadia.