As a digital marketer I understand the pressures to justify a marketing budget. In the recent climate this been even more important. Marketing departments are often an easy target for reducing costs, and they are hit hard. Budgets are easily reallocated to other aspects of the business. In the short-term, you may find that cutting spend in areas of highest direct ROI will help, but does this leave the business less competitive in the long run?
Here are some tips to help prepare to keep your business on track now, to ensure you are in the best position to power back during the recovery period.
Plan Around Your Business
A natural instinct is to try and find out what your competitors are doing. Whilst benchmarking the competition can be a good strategy, don’t get too bogged down with how they are advertising. Look for the white space that might exist for you to stand out.
Making decisions based on where and how much others are spending will lead you down the wrong path. Every business is unique and you need to work towards the strengths of your organisation.
Make A Decision & Stick With It
If you need to make short-term cuts to your marketing budget, that is ok. Sometimes quick changes are needed and they can help to relieve some pressure. They may give you the initial breathing room that you require, but work on the following steps to capitalise on opportunities. Look further than the first layer of data
It is always a good idea to look at the data trending, going beyond the Return On Ad Spend (ROAS) of each channel. Whilst high-level performance may appear reduced at a glance, some products or search intent may be performing better. You may just need to tweak your strategy rather and dig a little deeper to find hidden opportunities.
1. Look at how you are measuring results
I am taking a guess here that you have already set different goals for different campaigns, and you have an idea of how your campaigns are performing. You may have to explain why cutting everything that is not profitable won’t deliver the best results for the business. If performance is steady, or even stronger, compared to pre-COVID periods you have a good argument.
2. Monitor the competition to see if they are diminishing
Ad competition has been fluctuating and some industries have been feeling the effects of the pandemic more than others. Costs per impressions have significantly reduced on Facebook recently, but we are now starting to see consumer buying starting to rise. It is all about monitoring channels at the moment in order to see where you can take advantage.
3. Review your offering
With buyer behaviour changing, pulling back may give you the time you need to regroup on your messaging. Is your message contributing to the decline in performance of your campaigns? This is a great opportunity to revisit your ads, do some consumer research and invest in creating new content.
Making The Case For Top-of-Funnel Budgets
Once non-marketers get involved, the first thing to get cut will be everything except those campaigns with the highest ROI. At some point, reduced investment in top-of-funnel advertising will stop you reaching new prospects. It is therefore important to understand your buyer’s journey. If on average it takes 14 days after a consumer sees one of your ads to purchase, you know that if you stop ad spend today, you are likely to see a drop in sales two weeks down the line.
If you stop introducing your brand to new prospects, you may extend the drop in sales which could have detrimental affect on the business. Make sure you explain this to your team, particularly if you are in B2B marketing.
Ultimately, businesses need to spend money only where it makes sense, and budgets that are usually available for testing may need to be scaled back. The best thing you can do is planning for marketing budget conversations that may crop up.