Budget woes getting marketers down? Make the most of it, experts say

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The outlook goes from bad to worse depending on where you look: sluggish economic growth, concerns about inflation, predictions of a recession. The pessimism can affect marketers: most companies often look to marketing budgets as one of the first places to rein in spend. Even if budgets aren’t cut, marketing spend may stand to be scrutinized during a period of belt-tightening.

For some marketers, the uncertainty of not knowing how much money they’ll have to spend on campaigns in the first place can result in a tentativeness to commit to big-ticket spending in the near future. However, experts told us that there are some steps marketers can take to potentially protect their budgets and make the most of what they have.

Defend what you can

First things first: if you can, fight to keep your budget. That means communicating effectively with the executive team about the results that are driven by marketing expenditures.

“The more that CMOs can demonstrate the financial impact of marketing investment, the more it will be seen as a revenue driver and not a cost center,” Katie Denlinger, principal at Deloitte Digital, told Marketing Brew.

Marketing analytics can help quantify the positive effects that come from marketing spend, and even marketers at organizations with limited datasets can compile aggregate data to reinforce “how marketing is associated with growth,” and that cuts shouldn’t come at the expense of marketing, Jason McNellis, senior director analyst at Gartner’s marketing practice, said.

Go back to the basics

Vic Drabicky, founder and CEO of the agency January Digital, said many marketers are taking the moment of uncertainty to revisit “the very basics”—things like checkout flows, product pages, and email marketing. “Those are things that are generally easy to benchmark against, easy to prove, easy to track, [and] therefore easy to fund.”

Another place to continue investing? Creative and brand-building efforts, which are essential to staying in consumers’ minds—especially as privacy changes continue to affect the performance of lower-funnel marketing activity, Drabicky said.

“You can look at almost every bit of performance marketing and show that you have to have some sort of brand influence for it to have worked,” Drabicky said.

Design an experiment

If cuts are coming, use it as an opportunity to glean information about what marketing is most essential and effective for the organization. McNellis suggested that marketers use some of the same tactics as behavioral economists. In other words, “turn your budget cut into a designed experiment.”

Instead of making a standard cut across marketing, divide marketing into different channels and adjust based on specific objectives, he explained. Then analyze those shifts and the results they produce, and marketers are left with useful information about how to build out even more effective plans.

“We can take these budget cuts and we can actually use them to design the best experiments that many companies have ever done in their marketing history,” McNellis said.

Get ready to go

To be prepared to move on an opportunity, marketers may consider identifying ways to determine when and how to reinvest and dial up investment again. That may include some kind of leading indicator for the company, ideally using proprietary data, McNellis advised.

That also means continuing to spend on testing new channels—like, say, TikTok—in a time of belt-tightening. That testing is essential for marketers to be able to move fast on new opportunities when they present themselves, Drabicky said.

“You’ve got to be committed to the testing,” Drabicky advised. “If you do that, you tend to move your organization forward without putting too much risk on the table.”