Marketing moves quickly - and it continues to accelerate. Spending has to happen quickly to keep pace with the required execution. How can marketers (1) ensure they don't miss their plans, and (2) communicate results clearly and objectively?
Marketing is an ever-more complex discipline, and it can feel overwhelming sometimes to deal with the chaos of high velocity, high-volume digital marketing while handling the long-term, high-cost, high-orchestration, must-get-it-right pressure of costly events. It's easy to get lost in the details, easy to measure the wrong things, and many marketers do.
Companies, and functions within companies, need to stay focused on high-level plans and objectives. As a discipline, marketing has fallen behind its counterparts. But there are really only a small number of ways that marketing plans can miss their targets.
Spending more money than you were allocated is not going to win any popularity contests. Why is it that marketing so frequently overspends? One of the main reasons is that it doesn't have visibility into a few key data points
- How much of the budget is committed vs available. If you don't know this number you risk spending money you don't have.
- What is Finance's view of what's been spent? This could be viewed as a subset of the first point, but it is important enough to highlight individually. Most marketing organizations are running weeks or even months behind reality, waiting for an AP report from finance to tell them what's actually been spent. It's very tough to know whether to pull the trigger on an investment if you don't know whether you can afford it.
Add to this the fact that everyone spends in Marketing. Marketing is a unique function because throughout the organization, staff at all levels is authorized to spend frequently significant amounts of money, quickly, in ways that no other function can. To execute the plan, the marketing organization typically has to spend and hope it is not going over budget. As the velocity of marketing continues to accelerate due to the ongoing explosion of digital, this problem is getting worse, not better.
For all the reasons above, it is just as likely that marketing teams underspend. There might be certain - especially public - companies, who think this is a good thing because it improves the P&L. But, in the normal course of events, it is A Bad Outcome. Underspending means that marketing has failed to deliver on the plan and budget it committed to. If you don't spend your entire budget you can't deliver your entire set of results. You cannot underspend and achieve your business metrics unless (a) your metrics were sand-bagged or inaccurate (b) there is some external lucky break that you didn't anticipate.
3. Missed KPI's
Even if you land perfectly on your financial targets, marketing needs to demonstrate that it delivered what it committed to. The challenge of measuring the right things is something we think a lot about at Plannuh, and we've discussed elements related to the topic here, here, and here.
In every discipline, the importance of measurement is increasing. Marketing also needs to measure and report on KPI achievement. However, it's a hugely fragmented domain, with fabulous reporting capabilities in certain silos (e.g. Facebook or Google Ad campaigns) and relatively challenging objective reporting in others (e.g. radio advertising). These silos tend to be channel, rather than campaign, oriented, and this leads to bad practices (as I've previously written about here, modeling attribution on a channel basis is the wrong approach).
The right approach is to group together activities across all channels and measure their collective contribution to the overall campaign objective, such as acquiring new customers, or developing pipeline, which can be measured objectively using metrics that colleagues outside marketing understand and care about.
4. Missed ROI
Hitting your KPI's is one thing, but hitting them at a target ROI is another. This is important as it calibrates the return on marketing investment to the overall company P&L. The Marketing ROI might be a headwind dragging, or a tailwind augmenting, the corporate P&L. Either way, it needs to be known within the context of the overall financial plan.
I've discussed how to measure The New Marketing ROI here. The ability to show ROI, measure marketing over time, as well as baseline and benchmark your marketing performance is critical for any marketing team trying to tie metrics to their ROI.
4.5 No (or Weak) Goals
Why's this half a reason? Because you can't miss a plan you don't set. According to the Plannuh Marketing Graph, 74% of marketing organizations are not setting strategic goals with KPI's. Setting and measuring goals is critically important to becoming a successful marketing organization. First, it is required to establish a realistic ROI benchmark. Second, it enables teams to measure progress over time. Third, it is a prerequisite to maintain credibility as a discipline and a function within corporations.
In this eBook, we discuss the importance of goals-based marketing and teach marketers how to define a set of goals that align with your strategy, and most importantly, your company initiatives.
Be Roadrunner, not Wile E Coyote
It is possible to manage your financial and business targets in alignment and to establish and report on objective results and ROI calculations with Plannuh's marketing ROI software. We built the product to enable marketing teams to collaborate to deliver accurate budgets with objective ROI's at the pace of modern marketing. If you're at risk of one of the 4.5 errors above, give it a try.