By Marie Gulin-Merle
For today’s businesses, moving forward isn’t just about planning ahead. It takes planning and planning to drive short-term results and long-term business growth. Global economic pressures and uncertainty make it even more important for marketers to balance their early planning with the need to be agile.
To achieve the highest return on investment (ROI), marketing and finance teams must partner closely to build flexibility in how they manage their resources and budgets. This allows them to switch investments wherever there are great opportunities.
Leading marketers are budget efficient.
To specifically explore efficiency in digital marketing, Google recently partnered with Kantar to survey more than 2,400 global marketers and understand their approach to planning, allocating and optimizing digital budgets. Nearly a quarter of marketers surveyed are considered “budget-aggressive,” meaning they adjust budgets across digital channels on a weekly or frequent basis. Budget-oriented traders report better trading performance than others; 48% of budget-conscious marketers say their marketing performance exceeds internal expectations and key performance indicators (KPIs), compared to 33% of budget-conscious marketers.
Budget efficiency does not mean “unplanned”; 31% of budget-efficient marketers engage in regular marketing planning to align strategy and digital media budget allocations each month, compared to 18% of non-efficient marketers.
Efficiency empowers marketers to be flexible in their planning and budget to target areas with the highest potential to improve ROI. 31% of budget-savvy marketers say it’s “very easy” to get additional budget to launch experiments that weren’t included in the original media budget, compared to 9% of non-efficient marketers.
Having the flexibility to engage in planning while leaving room for new improvements and growth opportunities will result in better business results. Marketers with tight budgets are 25% more likely than non-tight marketers to report their performance is stronger than industry competitors.
Most marketers underestimate their budget
Many marketers consider themselves more budget efficient than they actually are based on their budgeting behavior. On average, 60% of marketers who say they are “extremely agile” make budget adjustments monthly or less frequently.
This gap in perceived budget efficiency and actual budget behaviors is present up and down the organizational ladder, but is particularly wide in the C-suite. C-level executives report that their businesses are financially capable of twice as much as individual contributions.
Across the board, there is room for improvement in making fluid budget adjustments and reforms. Teams lack the ability to make flexible adjustments to allocate costs where there are high-ROI opportunities. Only 17% of budget-averse marketers and 6% of non-agile marketers have channels with unlimited or unlimited budgets that make it easier to increase budgets for new opportunities. And even marketers who are considered budget-savvy face time-consuming approvals to pass budget changes. For 59% of budget-oriented marketers, digital budget conversions of 20% or more take a week or more.
Budget efficient four adapters
For organizations struggling with budget efficiency, the good news is that it doesn’t require dramatic changes to make meaningful progress.
A Google/Cantar study identified four behaviors that organizations employ to improve budget efficiency.
- breaking down organizational silos; 58% of marketers have created additional cross-channel team points, such as meetings, training and information sharing, to improve collaboration. Firms with budgets are also more likely to prioritize channel collaboration and develop integrated marketing teams. Budget-savvy marketers are twice as likely to call their marketing “very tightly integrated” across channels compared to budget-conscious marketers.
- Embrace cross-channel automation: Budget-agile marketers are 29% more likely than non-agile marketers to use automation to optimize performance across digital channels in real-time to drive better ROI. International streaming service Discovery+ has moved from stealth campaigns It buys a general arrangement for the digital media High performanceA goal-based campaign that maximizes performance across all Google advertising channels and inventory.
- Applying consistent measurement: Sharing goals and metrics across marketing channels and teams can help improve cross-team collaboration that supports budget efficiency. 41% of marketers surveyed have established common metrics and KPIs across channels to improve collaboration.
- Leaning on agency partners: Agencies help encourage fluid thinking Budgeting and budgeting in organizations; 42 percent of budget-efficient marketers say they have the most influence on their agency partners’ adjustments after the initial budget plan, compared to 31 percent of non-efficient marketers.
What budget efficiency means to you
In this tough business climate, it is imperative to invest in strategies that deliver ROI. Don’t let budget plans keep you stuck in outdated strategies. Plan ahead – but be ready to strike fast.
Businesses with the budget can relocate based on what’s working well, invest in new opportunities, and improve their organizational structure for better business performance. For marketers who aren’t as budget efficient as necessary, there’s an opportunity to improve with simple tasks like increasing cross-team collaboration and improving real-time budget management and optimization.
Becoming a more agile organization helps you move faster, capture more performance opportunities, and drive more business growth.
Source: Google/Cantar Budget Agility & Channel Desilong Research, US, CA, AU, BR, DE, IN, JP, UK, Advertiser: Agile n=416, Not Agile n=1,677, Desiloed n=514, Siled n=1,579 , March 2022–June 2022.
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Marie Gulin-Merle He is Google’s Vice President of Global Ads Marketing and works on building and implementing global marketing strategy for Google’s advertising business and advertising products.