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Issue 28

Marketing budget = Advertising budget?

Adrian Abrudan
Senior partner & research director
@Loopaa
MANAGEMENT

Let’s look at it from a different angle…

Most small and medium sized companies do not use the marketing budget concept. Best case scenario is when they have an advertising budget.

But what about the other marketing investments?

Aaah… those are handled by other departments. Processes? By management. Competition? No one knows the competition better than the sales team. Cost efficiency? There’s a Financial Department…. and management.

True, but marketing analyses are focused on different themes than financial analyses. If management doesn’t have any special professional marketing skills, then marketing should be directed to analyze all processes that are creating value for the customers and should have dedicated measurements in the marketing budget. Marketing realities will keep marketing budgets mixed with other departments’ budgets, but efforts should be made constantly by marketing responsibles to have an overview on the general value created by a company on different market sectors and on different responsibility levels within the company.

Managers have a difficult decision here. How much should they allow marketing to adjust other processes inside the company?

These kinds of analyses and measures should be considered in the end, in the overall budget of the company. Reality is that the most credible, competent of them all will have the budget accepted. But sometimes they don’t check out the business from this angle.

The General Manager and marketing responsibles are the only ones that can have angle views upon the business. In the end, having control on value proposal for customers is the objective.

So… how should we build the marketing budget?

The difficult mission of managers is also influenced by the complexity of value creating processes in the company. In the end Marketing is… everywhere. It isn’t necessary to have everything centralized in the marketing budget but make sure your management team:

Also important! Encourage marketing to be creative, courageous in proposals and make the right decisions based on the real context of the company and its long term objectives!

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