Читать книгу Marketing Performance - Freundt Tjark - Страница 6

Transparency creation – it's easy to say and hard to do. This is because the marketing budget is scattered across so many different business units, functions, and departments at most companies. While most CMOs are in charge of all advertising, responsibility for activities such as co-op campaigns, sales support, public relations, owned media, and sponsorships often resides elsewhere in the organization. Yet all these activities affect your target audience in some way or another, and they should all contribute to your overall marketing objectives. A substantial share of the budget can also be hidden in the P&L of local subsidiaries, franchise partners, or affiliate companies.

So, before you even think about sizing, compile a comprehensive list of all the buckets in your current budget. Obviously, the number and granularity of budget positions will vary from company to company. Conceptually, taking stock should include all investments that are made to advance customers – current as well as prospective – towards your company on their purchase decision journey from awareness and consideration to purchase and loyalty. You don't need us to tell you that marketing is so much more than advertising. But in some industries – such as retail or B2B – traditional advertising typically only accounts for a relatively small share of the total budget. Make sure your transparency effort also captures point-of-sale activities, direct marketing, sales support, events, sponsorships, and indirect costs, such as agency fees and production expense. Compare our discussion of the “total cost of ownership” of a given touch point in Chapter 5.

The structures of most organizations – and the respective decision rules – are often the products of history and politics rather than business requirements. Typically, the marketing budget mirrors this internal view. As a result, the building blocks of the budget are often departments and business units, rather than products, channels, or target groups. But the budget should be a function of the market you are serving, the objectives you are pursuing, and the instruments you are using to reach these objectives. To promote an investor's mindset, we recommend you create transparency in two respects:

• Which objective is a given investment meant to support – brand building, customer acquisition, or sales support for a specific product or service?

• Which instrument, or combination of instruments, are we using to reach that objective in our target group?

This will lay the foundations for optimizing the allocation of funds to business units (see Chapter 2) and instruments (see Chapters 5 and 6). Ideally, investments should be split according to where and how they reach your audience: on TV, in a print ad, online, as a leaflet that is delivered to their homes, in a store, in the form of an addressed direct mailing, or as part of a loyalty programme. This will help you take on a consumer perspective, rather than worrying about budget ownership. Keep in mind that costs incurred at the same touch point may be split between multiple departments. For example, your company's website may be co-funded by the IT department, corporate PR, and your own function. Some marketing activities may not be treated as marketing expenditure at all. For example, co-funded sales stimulation campaigns are often managed as stand-alone profit centres. While this is good news from a return on investment perspective, it can turn transparency creation into a nightmare. Depending on the size and the complexity of your organization, transparency creation can take several weeks, but it is worth the effort. It will not only help you quantify the total “I” (investment) in “ROI” (return on investment), but often also triggers a productive debate among executives about appropriate allocation keys and accountability assignments.

Systematic transparency creation is imperative not only at the corporate level; it should be a matter of course for all your direct reports and their teams – be it to allocate funds to investment units (Chapter 2), to quantify the true cost of each touch point (Chapter 5), or to apply advanced analytics and optimize the mix of marketing instruments (Chapter 6). In each of these respects, transparency is the prerequisite of reliable, fact-based decision making. In this chapter, we will focus on the total size of the budget.