Here’s a question we don’t ask ourselves enough: What happens when this year’s marketing allocation actually works?
Of course, we know what happens. Better brand awareness. More customers. Increased sales. Company growth.
But what does it mean for next year’s budget?
Well, the obvious move is that you take next year’s budget and allocate it for most of the stuff that worked. This makes sense—you want more of everything referenced above, so you need the funds to keep that engine running.
I’m more curious about budgeting for the “stick your neck out” kind of stuff. The never-been-done, creative strategies you test next year with one eye firmly on the future. The long plays—the ones that might not get reported as part of your weekly KPIs, but those that represent ambitious opportunities down the road.
The “fun money.”
Now, I’m not advocating that we think about marketing budgets through the context of personal finances. There’s a big difference between splurging on an expensive dinner or weekend getaway and allocating a certain percentage of your organization’s marketing dollars to efforts that may or may not bear fruit. There’s nothing “fun” about taking risks on new strategies—especially when you’re on a tight budget.
But, when you have the funds, and you plan for it, it gets easier to make those decisions guilt-free. Should I allocate it where it works to ensure more of a good thing? Or, do I go outside my comfort zone to try something different?
Before I talk through some strategies for making those decisions, I want to acknowledge the anxiety of determining marketing strategy—and spending—in general. The world is changing faster than we can gain our footing. We’re running so fast to keep our engines humming—our lead generation funnels, content creation, PR strategies, and digital platforms—that we forget the basics.
What does it mean for next year’s budget?
I know I’m guilty of this. Part of this is because I’m not a “back to basics” person. You’ll never be able to pry my newest-generation iPhone out of my hands and replace it with a flip phone, even if those new versions Samsung’s rolled out in recent months have admittedly piqued my interest. But, just as the humble flip phone is making a comeback, I’m advocating that getting back to basics is actually the best way to plan to spend those opportunistic marketing dollars.
I’m talking, my friends, about using a good, old-fashioned SWOT analysis to take some of the stress off a big shift to the unknown in order to make those determinations.
Step #1: SWOT your marketing budget opportunities
Let’s say you’ve allocated 75% of your marketing budget to proven activities that will keep your engines going and continue to give you the results you want, which leaves 25% for the bright and shiny.
Here’s how you might start to think about allocating that spend through a SWOT analysis.
When your investment has powered success, there are ways to reinforce what you’ve already achieved, or reach outside and step into a set of testable scenarios. In all cases, the learning you’ll yield from leveraging your strengths will serve you for future strategy. For example:
- Double down on your investment success. If your marketing investment has actually driven growth, your channel strategy has been a true strength for your brand. Investing more into high-performing channels would, in theory, ramp that success up to the next level. Of course, there’s a tipping point where you’ll start to see diminishing returns—but at this stage in the game, you’re probably not there yet.
Lean times often call for out-of-the-box experimentation.
- Shift strategies. If you’ve successfully engaged a customer sector, there are at least two ways to uplevel your investment there: allocating new and shiny resources to gain a greater market share of an existing sector, or establishing your business in a new market where a large competitor lives, to see how elastic the market conditions really are. You won’t know unless you apply some resources to the task.
- Feed different audience segments. Perhaps most of your marketing efforts over the past few years have centered on new customer acquisition. Maybe it’s time to upsell existing clients and put customer marketing on the front burner.
Here you’re thinking about anything that might stop your marketing from performing at its highest level. Some pieces here might be:
- Focus on talent retention. The tried-and-true and the new won’t matter if you don’t have the team you need to make it all happen. Now may present an opportunity to reorganize your org chart. Are there roles you might bring on that add value to new business, technology, or marketing?
- Weather unexpected market conditions. We all saw this phenomenon during the peak of the pandemic with many e-commerce brands. They were indispensable during COVID but found it tough to pivot when people began going out into the world again. If your company is successful right now, but you’re being honest with yourself and know much of it is because of a particular moment in time, it’s worth investing that test money into understanding how to meet future customer needs—or, Challenger Sale-style—teaching them about needs they didn’t know they had.
Opportunities are often connected to big swings of the P&L. Strong financial performance can support non-revenue-generating brand activity; lean times often call for out-of-the-box experimentation. Here are a few considerations if you find yourself with some extra funds:
- Give back. Brands have long established value by giving back to communities and causes, as long as the efforts are authentic, real, and aligned with the brand’s identity. These endeavors are funded by strong revenue performance and market share successes. If your business has had a strong year, use the financial bandwidth to do something different: align with a purpose-driven organization, offer free training on your software to a local school district, or give employees a vacation day in exchange for a volunteer day that helps others. Do it now, when the balance sheet is looking good!
Note: Be sure your “give back” aligns with your brand values and actions. Your customers are smart, and they’ll see through a gratuitous association with a cause or nonprofit organization.
- Show up where your competition is not. While your board may wonder why on Earth you want to test out TikTok for your B2B business, now may be the time to do just that. Exploring new-to-you tactics and channels requires creativity and new thinking. As long as it rolls up to your larger marketing and business strategy, these funds can give you the freedom to try a channel that you’ve never had the funds to do well previously.
While strengths in our business fuel our tolerance for uncertainty, pressurized conditions put us on the defensive. Hidden within may be opportunities to allocate resources to creative defense measures, such as:
- Protecting the castle. Is your biggest competitor going public, with big plans to expand the business? Is your current customer base at risk? Those are hard realities to just shrug your shoulders and say, “Yeah, we’ll catch up to them/figure it out next year.” Drill down on customer retention measures, whether it’s expanding your customer success department, establishing monthly or quarterly in-person meetings, or simply picking up the phone (imagine that!) and connecting in real-time.
- Diversification of channels. Maybe you’re relying on one or two channels for customer acquisition, and one of them (LinkedIn! Facebook! Instagram!) has an algorithm that’s always changing. Taking a portion of your budget to explore other options—affiliate marketing, email—can ensure you’re mitigating these factors before they become problems you can’t come back from.
Step #2: Calculate your most “future-focused” opportunitiesBudgets are a reflection of business strategies across all elements of a business—product development, technology, human resources, marketing, you name it. To drive true growth, we need our marketing strategies to be directed at only the most important things—and our budgets need to mirror that.
Marketing fun money gives us the chance to test, explore, and expand.
In essence, budgets become our fuel for that growth—if they’re forward-thinking and mapped to ambitions that drive the business forward. Otherwise, they’re just a bunch of numbers.
As you think through all of these actions you could take with your marketing dollars, make sure you’re thinking: how future-focused are each of these opportunities?
Take that last SWOT example I shared—the competitor going public. As you’re planning your defense, are you fighting back with additional advertising to support your brand—a more measurable, immediate, potentially short-term lift—or an entire refresh and relaunch of your brand identity: a bigger, more foundational, sustaining, and long-term lift?
I’m not saying the most future-focused opportunity will always be the best answer, but I do think that getting into the habit of assessing our opportunistic marketing spend through this lens is a good one.
Because in the end, this isn’t “fun money” in the way we typically think about it in our personal lives—spending it on our wants instead of our needs. Marketing fun money gives us the chance to test, explore, and expand, but whether it’s bright and shiny or traditional and effective, we all want it to do the same thing—drive growth and meet business objectives.