Marketing programs are vital for business growth. But in times of high uncertainty and stress, marketing tends to be one of the first budgets cut. Finance considers other departments to be more critical to the survival and health of the organization, and marketing nice to have, but less critical for near-term profitability.
The most recent situation to call attention to this issue is the global pandemic caused by COVID-19. Businesses around the world were plunged into disarray as stay-at-home mandates emptied offices, canceled events, and changed nearly every facet of how people engage.
Amidst the chaos, some marketing departments emerged unscathed. Some even came away with more budget than before. What factors had protected and supported these organizations?
Iron Horse and Allocadia’s 2021 Marketing Planning, Budgeting and Measurement Benchmark Results, released today, sheds some light on this question. We commissioned the survey with Allocadia to explore how marketing teams plan, budget and measure. The research and analysis was led by myself and former IDC analyst and current VP of Market Insights & Growth at Allocadia, Sam Melnick.
Although our original goal was to investigate the correlation between marketing performance management and business growth, the uncertainty caused by COVID-19 presented an opportunity to also see how marketing organizations perform under stress.
The answer was clear: marketing organizations with mature planning and budgeting processes were not only more likely to be part of high-growth companies but were more likely to gain budget in response to COVID.
Here’s a snapshot of why:
- These marketers plan for change. 50% of organizations whose revenue increased 10% or more strongly agree that they create multiple scenarios around marketing budgets. Only 27% of marketing organizations whose budgets decreased 10% or more said the same. Marketers who have gamed several scenarios already can more easily shift budget or pivot activities when the situation changes.
- These marketers are more automated. 71% of companies where marketing budgets increased ten percent or more post-COVID strongly agree they have automated ROI measurements. Only 28% of marketing teams that lost ten percent or more budget post-COVID were likely to say the same. When done well, automating reduces errors and enables real-time visibility that leads to faster decision making and greater confidence.
- These marketers have a relationship with finance. 61% of marketing organizations whose marketing budgets increased ten percent or more post-COVID strongly agreed they had a strong partnership with finance—while only 30% of marketing teams whose budgets decreased said the same. Finance holds the purse-strings and like any good lender, is looking for solid returns on their investments. Marketers that take the time to learn the language of finance are better able to communicate the worth of marketing—and thus secure budget for—their plans.
The Iron Horse insight.
Basic planning and budgeting is easy—if you don’t care about the results you’ll drive. To establish a stronger planning and budgeting process that is closely tied to outcomes and allows marketers to quickly make informed decisions in the face of change, you will need the will, tools, and time. But the effort is worth it. Download the full report for a more detailed look at our findings and concrete actions you can take to establish marketing as a growth driver for the business.