For as long as I have been involved in marketing, the marketing budget process has revolved primarily around the use of a spreadsheet to allocate, track, consolidate and report budgets. Spreadsheets have been a staple of business since their inception in early 1980s, and while they have grown in sophistication and versatility, they have not steered away from the basic manual entry of rows and columns of data.
The experience of using a spreadsheet for managing a marketing budget can range from simplistic to nightmarish depending on the depth of needs and complexity of marketing’s programs and business models.
There are five primary problems with using spreadsheets.
1) Spreadsheet data can be erroneous when entered or changed. Now, you can argue that this is true of all applications that involve data entry, but spreadsheets are particularly prone to this problem because the inevitable errors are hard to identify and trace. Controlling who and when changes can be made is very problematic as well.
2) Spreadsheet consolidations and aggregations are not for the weak of heart. Let’s consider a marketing budget developed with a spreadsheet where marketing budget and spend by marketing communications, lead generation, event marketing and web marketing are broken out into tabs and allocated to five lines of business or geographies. That’s 20 individual spreadsheet matrices that must be aggregated every time a change is made or a current report requested. One change to any of the cells requires re-aggregation of all the matrices. Yes, you can program, emphasis on the word program, macros to automate the process, but honestly, it hurts just thinking about it.
3) Spreadsheets are not scalable. I have seen marketing budgets that encompass hundreds of marketing programs, multiple lines of business or geographies across multiple product lines. If you are tracking and rolling up all marketing spend transactions, you can easily get into tens of thousands of lines of spreadsheet rows making reporting and consolidations slow and difficult.
4) Spreadsheets are in reality not that flexible. Using the same scenario cited in the consolidations and scalability examples described above, imagine the impact of a decision to add a column, track a new element, add a new category of spending or a new line of business. The impact ripples throughout your spreadsheet based marketing budget. Also, watch out for data entry errors when these changes happen too!!!
5) Spreadsheets are problematic to inspect and audit. We’ve all seen it. Your spreadsheet doesn’t cross foot or total up to what’s in the submitted budget or spending report. Consider a budget that was fine on Monday but is now not footing on Tuesday. Who changed it and where was the change made. What’s your audit trail?
Welcome to the 21st Century where there are better ways to build and manage your marketing budget. Automated Marketing Resource Management (MRM) solutions address the problems mentioned about. It’s time to reset our expectations for spreadsheets and their use in the marketing budget process. The use of MRM is quickly becoming a best practice for building, tracking and reporting all forms and complexities of marketing budgets.
What are some other problems you see with using spreadsheets in your organizations?