thank you so much - this is so incredibly helpful. I wish I had read this earlier in my career. Would also love to read about your sabbatical. How did you plan it? What's your goals? I also one last year after a couple of years of a CMO role and now figuring out my next move.
I think we marketers often shy away from talking about budgets (understandably, it’s not the sexiest topic), but it means a lot of us end up having no real clue how to build one effectively.
Personally, I think the DAGMAR approach (aka objective & task) is the most effective way to tackle a marketing budget. If you build your plan around a clear set of goals - rather than basing it on past spend or future predictions, it becomes much simpler and more strategic.
I tend to set 2-3 measurable objectives a year (one long-term, two short-term), assign a value to each, and estimate the tactical spend needed to deliver them. I’ll then include both the proposed investment and estimated return in my proposal to the CFO/CEO either for sign-off or re-scoping.
Of course, brand tracking is key to making this work. I think Tracksuit is a cost-effecitve solution! Not just for setting benchmarks, but also for showcasing wins and spotting early warning signs. (And no, I don’t work with them!)
Speaking of which, they have a free marketing budget calculator that I found super useful as a starting point to think about the long/short split.
And on that topic… the long vs short game is always tricky. As you said, big brands benefit from ESOV and salience - but ESOV drives growth, so getting to competitive parity might just be the winning formula for Yonder. Personally, I’d lean heavier on the long, but that’s just my take!
Anyway, enough talking! here are a few resources on budgeting and brand tracking that I’ve found really useful in the past:
I’m interested in how your in-month process to move budgets across channels works. How fluid are you? And also, what your thesholds to move budgets across different months after they have been ‘locked’ by finance? Are you fluid in that regard, as it may have an impact on your monthly bottom-line P&L?
Fairly fluid. We probably review every quarter. We don’t lock budgets ever, except for the long term ones which are basically ‘this is all you have to spend until we raise more money’ so naturally those don’t change but how we spend within that period changes a lot. How do you do this at Monzo?
We're fairly fluid, where we can move budgets as we see fit across months and across channels. We worked hard to get Finance comfortable with approach, but it is proving to be really efficient, and allows us to 1) move at speed and 2) make decisions without any bias from channel owners, because channel owners' performance evaluation is not tied to AUM or efficiency. We evaluate ourselves as a team holistically. Ultimately we try to allocate budget to reach people with the right message at the right time, and the changes constantly.
Haha! The VP of Marketing and CEO comments are spot on! Different company, same type of marketing budget conversation every time
can u share the linkedin post that triggered the thought?
I would have but I couldn’t find it again! One of those posts that just disappears into the ether. If I do I’ll link it here.
thank you so much - this is so incredibly helpful. I wish I had read this earlier in my career. Would also love to read about your sabbatical. How did you plan it? What's your goals? I also one last year after a couple of years of a CMO role and now figuring out my next move.
Hey Tom - really interesting article!
I think we marketers often shy away from talking about budgets (understandably, it’s not the sexiest topic), but it means a lot of us end up having no real clue how to build one effectively.
Personally, I think the DAGMAR approach (aka objective & task) is the most effective way to tackle a marketing budget. If you build your plan around a clear set of goals - rather than basing it on past spend or future predictions, it becomes much simpler and more strategic.
I tend to set 2-3 measurable objectives a year (one long-term, two short-term), assign a value to each, and estimate the tactical spend needed to deliver them. I’ll then include both the proposed investment and estimated return in my proposal to the CFO/CEO either for sign-off or re-scoping.
Of course, brand tracking is key to making this work. I think Tracksuit is a cost-effecitve solution! Not just for setting benchmarks, but also for showcasing wins and spotting early warning signs. (And no, I don’t work with them!)
Speaking of which, they have a free marketing budget calculator that I found super useful as a starting point to think about the long/short split.
And on that topic… the long vs short game is always tricky. As you said, big brands benefit from ESOV and salience - but ESOV drives growth, so getting to competitive parity might just be the winning formula for Yonder. Personally, I’d lean heavier on the long, but that’s just my take!
Anyway, enough talking! here are a few resources on budgeting and brand tracking that I’ve found really useful in the past:
https://podcasts.apple.com/dk/podcast/warc-talks-budgets-and-roi/id1563243327?i=1000581007849
https://www.thinkwithgoogle.com/_qs/documents/7966/Measuring_Effectiveness_-_Three_Grand_Challenges_-_Google_2019_V2.pdf
https://www.rab.com/research/10014.pdf
https://minimba.com/triple-cooked-marketing-budgets-the-full-recipe/?failed-login=1
https://www.wpp.com/en/-/media/project/wpp/files/bullmore-collection/jb_ICKTHUTMISSOEYE.mp3ness%20Case
Best,
M
Very interesting and educative
Beautifully simple but effective!
Do you do any sort of tracking for the brand part or just look at the total new clients?
I’m going to write something separate on this next actually!
I’m interested in how your in-month process to move budgets across channels works. How fluid are you? And also, what your thesholds to move budgets across different months after they have been ‘locked’ by finance? Are you fluid in that regard, as it may have an impact on your monthly bottom-line P&L?
Fairly fluid. We probably review every quarter. We don’t lock budgets ever, except for the long term ones which are basically ‘this is all you have to spend until we raise more money’ so naturally those don’t change but how we spend within that period changes a lot. How do you do this at Monzo?
This is interesting.
We're fairly fluid, where we can move budgets as we see fit across months and across channels. We worked hard to get Finance comfortable with approach, but it is proving to be really efficient, and allows us to 1) move at speed and 2) make decisions without any bias from channel owners, because channel owners' performance evaluation is not tied to AUM or efficiency. We evaluate ourselves as a team holistically. Ultimately we try to allocate budget to reach people with the right message at the right time, and the changes constantly.
It's a balance of science, and art at the moment.