3 Rock Solid Budgeting Tips for Marketers to Plan for 2021 Amidst Economic Uncertainty
The secret of getting ahead is getting started
This season is ideal for marketing-conscious organizations to begin scratching their heads on planning for the next year. However, given the economic uncertainty in the wake of the COVID 19 pandemic, forecasting how things will happen in 2021 is no easy task.
The unexpected yet massive changes in buyer behavior, uncertainty around suitable channels of marketing for correspondences while keeping up the correct voice tone and the overall condition of the economy make 2021 budget planning distinctly tricky.
Whatever the future unfolds, there are three critical rules for marketers to consider when planning the following year’s marketing budget during these difficult times.
1. Yep, data is at the forefront of any planning. Compute your budget utilizing new and fresh information, not historical projections
When you make annual plans, it is a standard practice to put together your budgetary plan concerning earlier years and increase OR decrease the bar. While pandemic forced many marketers to squeeze their budgets in 2020, many of us may need to adopt a conservative strategy to 2021 as we may continue facing budget constraints.
Rather than promptly downsizing your marketing strategy, pause for a breath to draw a baseline of your marketing budget needs with a bottoms-up approach. Gauge future consumer interest for your products/services and the reasonable cost per conversion to get a clearer image of the spending you need.
For example: To capture the rising demand and making the most of the upcoming holiday season, you would have already done your math. It is imperative to set the budgets correctly. Study cost-per-click fluctuations, search query growth along with several other data points to forecast an appropriate budget.
To forecast budgets all the more precisely in an ever-changing digital world, Google has built a Performance Planner that allows forecasting key areas up to 18 months ahead of time.
2. Marketing is an investment; not an expense
Marketing should be treated as a long-term profit-center for the business and, therefore, tied to business-wide goals, such as online or offline sales, new leads, reviving lost leads, consumer engagement, and so on. During turbulent times of economic uncertainty, this is perhaps even more considerably significant.
Regardless of whether your organization is tightening its spending or expanding to meet new demand, it may not be easy to legitimize burning cash on marketing without a definite goal assigned. Zero in on how much new business your marketing endeavors might potentially produce instead of over-burdening senior management with KPIs like CTR and reach.
It would help if you gauged your channels comprehensively. Normally, lower-funnel activities have higher ROI; however, many advertisements, for example, video ads, search ads, and remarketing ads, work collectively. Each marketing dollar spent has the potential to generate several in return.
To estimate the return on ad spend (ROAS) and expected campaign performance, you can utilize simulators within your Google Ads account.
If your management is looking to tighten the belt, you may need to begin with a more modest spending plan. Abstain from spreading it thinly over all channels; pick channels with the highest ROAS.
3. Shifting demand requires dexterity
The year 2020 has made marketers learn an important lesson — consumer behaviors can change very rapidly. Marketers must adopt flexibility into their budget to prepare themselves to react to new challenges or opportunities that the year 2021 may bring to the table.
In the year 2020, many of us witnessed a dramatic shift of consumers to online channels, which lead to accelerated digital adoption. This shift, in turn, brought a significant improvement in ROI for most digital marketers. The businesses that advocated traditional marketing channels were forced to adapt to digital platforms to engage their consumers. With that in mind, and considering the point that digital marketing is comparatively less cost-intensive, you may be able to stretch further your marketing activities. Do not miss the reality that businesses are more online than ever before, which has stepped up the war to win the online space. The above may make you realize that you may now require a higher budget to compete and make the most of newly sprung opportunities.
Most organizations have a fixed yearly marketing financial budget, which they distribute monthly or quarterly. Though not evenly, these budgets are allocated based on campaigns strategized for that particular month or quarter. In the current evolving times, marketers must monitor and change these budget plans frequently. For example, do not make a yearly plan; instead, make shorter sprints. Review your marketing and promotion activities every 15 days to ensure that your best-performing campaigns are not compromised due to incorrect budget forecasts and allocations.
You can’t forecast ambiguity; however, you can be prepared for what’s coming next.
Planning a robust marketing budget can be complicated even when circumstances are most favorable. Think of the times when unpredicted economic uncertainty can factor in, which makes planning even more difficult. None can predict what the future may hold; however, it is now more important have to have an adaptable mindset. That way, marketers can be more prepared to leverage any surges in demand and new opportunities that may arise when the overall economy begins recovering.
