Building the case for your marketing budget

Using the Plannuh Marketing Budget Benchmark Calculator

One of your most important responsibilities as a marketing leader is building the case for the right investment level in the marketing function. Successfully defending your plan can materially impact your effectiveness as a marketing leader – and even your overall career. No pressure ;-)

Building your case = controlling your destiny

Ultimately, building your case is about controlling your destiny. If you don't build a compelling case for your plan, the likely alternative is "the leftovers approach."

In other words, without a strong business case for investment in your function, the likely outcome will be a recommendation to spend the smallest amount possible on the marketing function. And without a strong correlation between investment and your business results, you may end up with a nightmare scenario: high expectations for delivery on your objectives with very low investment to support them.

Follow these core principles when presenting your case

Over the last 30 years, I have developed a set of core principles for building this kind of case. Upon reflection, I realized that many of these principles came from my scientific education where I learned the value of finding the truth versus manufacturing the truth. When you apply this set of principles to marketing budgets, you realize that you might be in a bad place if you spun the numbers in order to get a higher budget, leaving you accountable to what might be an unachievable set of results.

Here are the core principles:

  1. Focus on what is right for the business. Make sure you are defining goals that are achievable, aligned with the overall objectives of the business, and consistent with the strategy. For example, if your overriding goal is to drive growth, you may decide to recommend decreasing your marketing budget slightly in order to make room to hire another sales rep in an underserved territory.
  2. Be transparent - admit when something didn’t work well. When you are reviewing the past performance of your marketing campaigns, identifying investments that did not work is sometimes more valuable than identifying the investments that have a positive return. It can be tempting to ignore negative news, but it is quite powerful when you acknowledge that a particular investment was not effective.
  3. Use external data as a guide, not a rule. External data, including benchmarks, can provide extremely valuable insights for your decisions. However, benchmarks are averages and don't typically account for the unique characteristics of your company. Part of your responsibility is to highlight where and why you should be different from the benchmarks.
  4. Start with alignment. Before you do anything with your benchmark data, you need to make sure that you have clear alignment on the scope and objectives of the marketing function. The best way to do this is to write it down and ask for all relevant parties to sign off. If they don't agree to sign off on your objectives, ask them what they disagree with. Most organizations have less than 100% perfect alignment. It's an important part of your job to identify those areas.
  5. Have a plan to drive efficiency with your growth. I often missed this step early in my career. I assumed that if I was spending 10% of revenue on marketing this year, I would continue to spend 10% of marketing as the company grew and I would be expected to improve my results in line with the growth in investment. The reality is often different. In the case of a company that isn't growing that quickly, it's important to show investors that you can improve earnings. There are also uncontrolled cost increases that may affect your investment level. For example, healthcare costs continue to outpace inflation. And in general, you should expect to improve performance as you scale the business.

Benchmarks are great, but only one piece of the puzzle

As I highlighted above, benchmarks should be viewed as an important guide for your budget request, but should not be taken as gospel.

Over the years, I have endeavored to collect good benchmark data that I could use as a guide for my marketing investment case. In the past, these benchmarks were difficult to find, and typically required scouring long documents to identify the few numbers that mattered most.

That's why we created the Plannuh Marketing Budget Benchmark Calculator. This simple tool aggregates benchmarks from multiple perspectives to provide a simple comparison of your marketing budget.

Using the Plannuh Marketing Budget Benchmark Calculator

The Plannuh Marketing Budget Benchmark CalculatorWe tried to make it as easy as possible to use the benchmark calculator. Simply follow the link below, enter your company name, use the slider to identify how much you spend compared to your annual revenue, and select the appropriate attributes using the drop-down menus.

The calculator will compare your proposed budget with key benchmarks from the latest CMOSurvey report.


Critical step: highlight your differences in the benchmark results

Now that you have your nicely formatted benchmark comparison, the next step is to highlight why your proposal might be different (higher or lower) than the peer comparisons.

There are many factors that can cause variation from the benchmarks, and you should list the specific characteristics of your business that would drive a different investment level.

Some of the common factors are listed below:

B2B vs. B2C vs. B2B2C. Marketing investment levels, strategies, and tactics vary greatly based on the target buyers and go-to-market model.

Product vs. services. The CMO Survey breaks out products vs. services, which can provide some interesting insights. Services typically have a relatively low gross margin because of the labor cost to deliver services. They also have a different level of scalability because of the potential scarcity in labor. Of course, there are lots of examples of high margin services (expensive consultants) and scalable service models (like Uber), but it does provide a potentially useful lens.

Industry vertical. The industry sector can also be interesting, but you still see a great deal of variability inside each sector.

Marketing strategy. The marketing strategy employed is a major variable and often overlooked. For example, if you have a targeted account approach (or ABM) vs. a digital demand generation strategy, or content marketing strategy, you will see a lot of variation in spending.

Buying metrics. The type of buying cycle and related metrics can be quite useful. For example, do you have a highly considered, expensive offer with a long sales cycle or a candy rack item sold in e-commerce stores?

Insource vs. outsource. A key decision based on your marketing strategy and your available resources is the level of outsourcing you use for your marketing. If you have a heavy content-based strategy, you may need to consider hiring a staff of content strategists and creators, or you may decide to outsource. In most cases, insourcing makes sense if you have a well established strategy, but it may change the way you think about your marketing budget.

What’s inside marketing? Not every marketing team includes the same stuff. For example, you may include product managers inside the marketing team while others will include them inside the R&D line. Marketing may be responsible for some of the sales technology stack, like the CRM system, while others include those investments in sales.

Getting alignment on your goals

As you are developing your business case for your marketing budget, it is important that you highlight and secure alignment on your overall business goals in the context of your budget proposal.

In some cases, you will be able to make a clear correlation between spending and achievement of your metrics. For example, you should have a good understanding of your cost per lead, cost per opportunity, and cost per one dollar of pipeline.

Other metrics are a little more difficult to correlate directly to your investment. One of the reports that we provide in Plannuh is a Spend By Goal chart that you can use to show the level of investment that your plan makes toward each business goal you identified in your plan. This view, combined with your historical results, can help to justify the level of spending required to achieve goals that are a little more difficult to track.



Show your committed spend baseline

Another very important factor in your case is the amount of budget that is ready committed in your upcoming fiscal plan. Most B2B marketers, for example, spend about 30% of their discretionary budget on their marketing technology stack. That budget is typically committed for at least a year via software subscriptions.

In addition, you likely have other longer-term commitments that have already been made including booth space for popular events, retainers, open purchase orders or other contracted expenses, and ongoing pre-approved marketing campaigns.

Well this data can be difficult to assemble, Plannuh has a simple report that shows the level of commitment of your budget into the future.



In some cases, more than 50% of your annual budget can be committed before the beginning of your fiscal year. As a result, a reduction in your budget can have an outsized impact on your ability to achieve your objectives.

Compare your plan to last year

When you present your proposed budget, it's important to compare your proposal to the last fiscal year. Some important considerations include:

List the good and the bad. When you are including your results, you should include both the best-performing and worst performing campaigns. This shows that you are committed to optimizing the performance of your marketing investment by funneling low performing dollars to higher performing activities.

Show your plan and your actuals. When you compare to last year, make sure that you highlight not only your budget from last year, but the actual spending. You also need to include your projected results along with the actual results achieved. This can be tough data to present, but you will get much more credibility for being transparent.

Highlight key learnings. Indicate what you learned from last year and what you expect to change going into this year.

Opportunities for efficiency. As discussed above, it's important to show that you are continuing to improve the efficiency of your function over time. Highlight some of the key initiatives you have to drive better performance for your marketing.

Write a short, one-page executive summary slide

After you've collected and organized all of the data, now it is time for you to write the executive summary. Many people are tempted to write the executive summary upfront, but make sure that you actually understand all the data before you write down the summary.

You should think of your executive summary as a standalone case that requires data backup. Your CEO should be able to read that one page and understand what you're asking for, the results you expect to get, and the key supporting data to justify your case.

Ask for the order

When you're all done, don't forget to ask for the order. I've made this mistake in the past – after putting together a compelling case for my budget, ever and was nodding and grinning. I assumed that my job was done. It turned out that I didn't get specific approval, and another department was able to sneak in and make a more compelling case for some of my budget.

So make sure you ask for the order, understand and handle any objectives, and close the deal.

Now it's time to start marketing.


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Peter Mahoney is the founder and CEO of Plannuh.  Peter has degrees in Physics and Computer Science and studied Latin for 7 years, and then showed up in the wrong room one day and ended up in marketing.  In his 30+ year career, Peter has built products and led marketing for startups and for multi-billion dollar public companies.  You can follow him on Twitter and LinkedIn.



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