We have seen hundreds of marketing budgets at Plannuh, on hundreds of different templates. Google Sheets and Excel have many strengths. For marketing budgets though - and not to put too fine a point on it - they suck. That's why we see errors in more than 80% of all the budgets our customers submit (and we're not talking small mistakes here - we've seen spreadsheet errors in excess of $400K more than once).
As we approach planning season for many businesses, it is timely to raise the most common types of error, and - as always - to try to help.
A Best Practices Budget Template
We know that spreadsheets are a familiar and comfortable format, so we have created a budget template that reflects best practices. You can download it and use it for free by completing the form below:
If you build your budget in this template, Plannuh can automatically load it into a Plannuh account where you will be able to see how much more valuable and powerful Plannuh is for managing your budget than a spreadsheet.
If you don't want to do that, at least you will be working in a spreadsheet template that will help you avoid the major errors we've identified in typical marketing spreadsheets, like these:
- Understand how much of your budget is already committed. List out the campaigns that will run over from the previous budget period into the new one. These could be long range campaigns, evergreen campaigns (e.g. a routine $2000/month on Twitter advertising), and so on. It's easy to forget those and only to focus on the new campaigns you will launch. Similarly, what are the non-campaign marketing costs that you have to pay, such as corporate allocations, technology subscription costs, etc. Understanding these expense buckets will help you avoid any 😱💩moments later in the year when you realize you're overstretched. Doing this will tell you how much you have to invest in new areas.
- Identify key expense buckets. Set aside some money for non-campaign costs like printing, copying, travel and entertainment, etc. Put these into expense buckets.
- Set aside some money for experimentation and surprises. Nobody can plan perfectly. You will definitely need to make adjustments throughout the year, and you will want to invest in initiatives that you couldn't foresee during the planning period. Set aside a small percentage of your budget to cover these circumstances or you may find that you need to cancel or reduce the scope of important campaigns.
- Know and communicate the size of budget that is available for campaigns. Once you've gone through steps 1-3, you will know your total campaign budget, and the budget that's available for new campaigns. According to the Plannuh Marketing Graph, companies spend a mean of 65% of their total marketing budget on all campaigns (note, this percentage does not include any staffing costs). It's very important to understand what your real campaign budget is from a governance level, because many of your non-marketing counterparts will assume that 100% of your marketing budget goes on marketing programs.
- Segment your budget. You should not manage you marketing budget as one monolithic lump. Segment it across your organization. Some of that is pre-determined by your existing obligations (see point 1). The rest is at your discretion, and it should be applied in support of your marketing plan and business strategy. A CMO or VP of Marketing may allocate some budget to the Digital Demand Gen team, to Events, Product Marketing, PR, Marketing Ops and so on. In smaller teams - even for individual marketers - it still makes sense to segment your budget into logical groups.
- Allocate your budget. In your budget template, fill in your all of your commitments over time, by segment. This will be the points covered above: committed non-campaign expenses, campaigns that carry over from the prior budget period, your experimentation/surprise fund. Allocate the remaining budget into campaigns and expense buckets by segment and time period.
- Do not blend line-item expenses into your budget structure. This is a very common mistake. It can be impossible to tell looking at many templates what is a campaign, what's an expense bucket, and which groups of expenses belong together. Ideally, you should create your budget structure (allocation by segment, campaigns, and expense buckets, over the year), and then enter line-item expenses into the appropriate part of a template, or even track them separately. If the separation is not crystal clear, it's inevitable that people lose track of where expenses belong, and we see numerous errors stemming from this practice.
- In your template, avoid inline subtotals. Inline sub-totals are a bad idea. Here's an example:
There are numerous problems with this kind of layout, even though it looks perfectly sensible as a starting point. The most common two are:
- Over the course of the year, users insert rows into the spreadsheet, and the new row is not picked up by the Subtotal/Total formula.
- Users add up all the expenses and all the subtotals to create the total, yielding a double-count.
- Make it obvious where users can add data and what they should leave alone. To the extent that you can make it obvious to the user, show them where they can enter data, and visually indicate the elements that are calculations. Here's an example from the Plannuh template:
The user is instructed not to edit any black cells, but can enter data into any of the colored cells. This encourages data cleanliness and helps maintain consistency
- Discourage users from adding rows, columns or cells. Everyone thinks they're an expert in Sheets or Excel - maybe lots of them are, but everyone has their own way of doing things. Make sure there's lots of room to add new data without having to mess with the template structure. In the Plannuh spreadsheet, we provide tables for 25 budget segments. Each budget segment has room for 50 campaigns and 50 expense buckets. It will be rare for someone to need to edit the template structure. This avoids one of the most common sets of error we see in budget templates - messing with the model.
If you follow the steps above, you will avoid the most common and painful types of error we have seen.
If you build it in the best practices Plannuh template above, you will be much more likely to develop an accurate, error-free budget
If you upload it into Plannuh, you will be able to collaborate with your marketing team in a beautiful, intuitive, visual environment that is orders of magnitude more valuable and powerful than any spreadsheet.