Why cutting marketing spends during a downturn is not the most reasonable solution and how marketers can negotiate and justify the necessary investments when the company is trying to save money. In this article you will learn about four tips on managing marketing spends during a slowdown more efficiently.
Since during crises and downturns budgets are especially strictly controlled as companies try to save resources, marketers find themselves under even more pressure to communicate the value of their investment decisions. Simply reducing media spends will not do because in the long term it will negatively affect brand equity and future sales. Here we will discuss some advice from a recent McKinsey article that can be useful for weathering challenging periods like we are currently going through. The Covid-19 pandemic has dramatically changed the market conditions and consumer behaviour, that’s why companies need to take prompt actions to stay competitive and secure future growth. If you use Marketing Mix Modelling to evaluate marketing performance, you need to adjust your models so that they would account for Covid-19 factor.
We will also tell you how our solution helps to optimize budgeting and give the best performance with limited and fixed funds. Since marketers are primary drivers of business value, companies should not sacrifice this budget share in favor of cash reserves. The best solution is to implement effective spend management and agile decision-making that will allow marketers to allocate funds where they will be the most effective and make tactical changes to campaigns. It requires optimization of workflow to make it more efficient and flexible. Such changes don’t come easy, but companies from different industries that succeed in the following things get the most value from spend management. The recommendations presented below are not new, but their combination can result in significant changes.
- Use only necessary and the most efficient tools, services and channels, increase their share in your budget. To make informed, data-driven decisions on what to invest in you need to have a clear understanding of how every channel performs, evaluate its impact. AdoptoMedia offers an advanced solution to measure the marketing spend efficiency per each channel in your media mix for each product you promote. Our platform allows forecasting, measuring ROMI and tracking it in real time. You can run “what if” scenarios to see how budget reallocation will affect business KPIs, and Media Mix Tool with AI technology creates an optimal budget for future periods. With every ingestion of actual campaign data the model is updated automatically, so you can see how channels are performing and make tactical in-campaign adjustments if necessary. Our models also take into account the COVID-19 factor. As for work with agencies, companies need to have a flexible statement of work. The process of adding new tasks and removing no longer necessary ones should be simple and fast to better align tactics with marketing objectives and avoid waste of budget.
- Change the work process to enable faster decision-making. To be able to do this you need regular analytics and reporting, which is possible when you achieve the best-in-class level of marketing accountability on the Forbes marketing accountability maturity model. Reaching this level requires implementation of marketing automation tools that collect data, analyze it and visualize reports for easy interpretation. CheckMedia Solution by AdoptoMedia is the right tool for the task, it collects actual data on ad placements and automatically generates reports for marketing and finance departments, which are visualized in the form of dashboards. Switching to an agile organizational model, where cross-functional teams make their own decisions without waiting long for approvals will also speed up the decision-making process. It means a company should get away from top-down decision-making, which may be challenging, but it can reduce time to market. Agile marketing teams are perfect to successfully implement the test-and-learn approach. Another aspect that should change is the budgeting process: CMOs need to actively participate in it instead of letting CFOs make decisions based on the last year’s analytics and results. Marketers have a better chance of getting the necessary funding if they clearly communicate their strategy and justify the spendings. Our platform is the right tool for the task, it can calculate optimal media mix for every product and forecast ROMI per channel. With it CMOs will have the necessary data to support their ideas and demonstrate the value marketing investments generate in a way that CFOs understand, using common KPIs and metrics. Effective communication between CMOs and CFOs is important for development.
- Optimize where the work is done. According to the Association of National Advertisers, in 2018 78% of companies had an in-house agency compared to 42% in 2008. In-housing the right aspects will be very beneficial for your company, even though there are also some common challenges arising in the process. Many large brands successfully create in-house agencies to better control marketing spends, ensure transparency of operations, become more efficient, manage programmatic media buying or have better control over their clients’ data. With AdoptoMedia you can build an in-house agency to manage your marketing spends, media planning, launch campaigns, optimize media mix with full transparency and visibility.
- Pay the right price for the services and tools you use. With our platform you will know exactly how much you spend on advertising and how effective these investments are.
Try AdoptoMedia if you want to measure the effectiveness of your marketing activities and maximize it. Our flexible platform can be integrated with existing IT infrastructure without undermining the workflow to transform your business, automate routine processes, significantly increase marketing ROI, measure the impact of each channel in your media mix on business KPIs and maximize it.