Once upon a time, the CMO of a mid-market technology company submitted her annual budget to the board of directors. They opened the spreadsheet with excitement and exclaimed, “this is excellent, but there’s just one problem – it’s not big enough.” The board called the CMO and said, “your team is doing such a good job and we believe so much in marketing that we’re giving you 3x the budget that you’re asking for.”
Ah, yes, the fairytale every marketer dreams about. In reality, marketing, in particularly advertising and PR, is the first department to take a hit during budget reviews, especially against growing fears of a potential economic recession, stock turmoil and M&A ambitions.
So, while you are likely starting 2019 with less budget than you initially asked for, all hope is not lost. Here’s how to advocate throughout the year for additional funds while also building an ongoing case for budget increases in years to come.
If your C-suite and board members don’t have a strong SaaS marketing background, they might genuinely be unsure of an adequate marketing-to-revenue ratio. According to Deloitte’s The CMO Survey, companies spend 7.5% of revenue on marketing, but that number is much higher for tech companies at 13.8%. And Wordstream says startup and growth-stage companies’ marketing budgets should be as high as 20% of gross revenue due to the burden of new market penetration.
I recently heard an A++ quote: “Reporting kills. Analysis thrills.” As a CMO, you likely look at a multitude of reports from across marketing functions each month – website traffic reports, social media engagement scores, press clip reports, demand gen updates, and more. Individually, these metrics only tell a piece of the story. In order to truly prove the effectiveness of each of your individual investments, you need to analyze your multi-channel data collaboratively to paint a comprehensive picture.
Let’s take your press clip report as an example. If your PR firm provides you with media impressions and ad value equivalency numbers, push them to go deeper and identify which media outlets are doing the best job at driving referral traffic to your website and subsequently how that traffic behaves. Then, you can begin to bridge the gap between vague brand awareness activity and top of funnel leads, and validate your financial investment in that PR retainer.
Ah yes, the threat of competition. Here are a few tactics to supplement traditional competitive intel in order to justify a greater marketing budget:
- Track competitors’ social media engagement. At ARPR, we utilize Sprout Social’s competitor analysis tools (example to the right). These comparisons can often signal that you’re being outspent by the other guys.
- Keep a running log of what channels and how often your competitors are running paid ads – from podcast sponsorships to banner ads on industry sites. Pro Tip: use a sharp eye when looking at competitors’ byline articles in trade publications – many of them are paid native advertising today.
- Use digital marketing intelligence tools, such as SEMrush and Moz, to find out what keywords your competitors are bidding on, their SEO rankings for industry key terms, and more.
- Find out which PR firm your competitors use. If it’s a large agency headquartered in NYC or SF, rest assured they’re paying well north of $20,000 per month, which means you’re being outspent and can request more PR budget from the board.
Executives with financial oversight deeply value team members who exhibit a strong sense of cost consciousness and budgetary restraint. If you can prove that you’ve created efficiencies (e.g. vendor consolidation) and run price comparisons, you’re more likely to gain trust, and ultimately, more budget authority.
For example, ARPR has moved many clients from pricey wire services like PRNewswire to significantly more affordable services like PRWeb – saving them tens of thousands of dollars per year. In addition, our Panoramic Approach and team built to execute it provides SaaS leaders with the opportunity to consolidate marketing vendors under one roof.
If your marketing team needs an integrated PR partner in 2019 that can maximize budget resources and help you demonstrate ROI, download our whitepaper Rethinking the RFP Process: How to Select a Tech PR Partner to Push the Limits.