Secret Marketer: Marketing budgets are an investment, not an expense
For many marketers, this is a busy and frustrating time of year. It’s particularly so for those who follow the tax man’s view on when new year’s day falls: 1 April is our official start to the year as we seek to devise, submit and defend our annual marketing plans and budgets.
No matter where I have worked, I have always held the view that the board comprised a clever bunch of individuals – they wouldn’t have got where they are if they weren’t. But year in, year out, as I mull over the brands I have encountered, I am left stunned at how selective their memory becomes when I make my annual pitch to invest in our business. I am left pondering why they fail to make the connection between their need to grow customers and revenues, and find it acceptable to slash the very marketing budget which feeds that growth.
How many times do I have to state that the marketing budget is an investment, not an expenditure?
No matter how many statistics I show about how much more our competitors are investing; how many case studies I share on how marketing campaigns have helped us win business; or customer research that shows our brand undershoots its weight in the market, the conclusion is always the same. No matter how much pre-selling I have done to convince fellow board members to back my case, when the fateful day arrives it is incredible how much interest they suddenly develop in their shoes compared to my solitary pleas; knowing that if they get involved, they put their own budgets under the glare of the grim reaper.
The problem lies in the horribly short-term nature of the tenure of CEOs and chief financial officers. Anything that does not pay back its outlay within 12 months, and cannot unequivocally prove a direct correlation between the activity and the customer handing over hard cash, is ultimately given short shift.
Likewise, there is a view that marketing can be treated like many other expenses and is expected to reduce in cost over time. The lack of correlation between investment and cost could not be more stark.
Clearly, much of the blame must rest with me. After all, it is my job to convince them that the return on investment is undeniable. But I do believe our industry has an underlying problem in not being recognised as a critical component of any growth strategy.
It is ill-advised to be satisfied with a grudging acceptance that marketing is little more than a necessary evil. The problem is compounded if your brand has always under-invested, and you struggle to make the case for the art of the possible.
