To see a return on marketing investment (ROMI), you have to master the delicate art of managing a marketing department’s budget. Unfortunately, even the most sophisticated marketing teams struggle to calculate their true marketing ROI. If you’re a CEO or leader, it can be difficult to see where your marketing resources are best utilized.
You likely aren’t involved in day-to-day marketing operations, making it difficult to plan for your team’s limited resources. After all, you don’t want to mistakenly pull the plug on a successful advertising campaign based solely on the price tag—you have to consider ROI.
When it comes to marketing budgets, it’s not about the cost but about the returns you see on these marketing expenses. But don’t worry: a fractional CMO can offer unbiased, professional advice that will help you make the most of your marketing resources.
→ Trust a fractional CMO to help you avoid these 5 common marketing budget mistakes.
1. You don’t have strategic goals
It’s impossible to budget without a goal. Goals help you understand where you need to funnel money and why. Since 60% of the world’s most successful marketers have a documented strategy and objective, your team needs to understand its mission to make the most of your marketing budget.
You may have goals for the business as a whole, but what about marketing? Do you have goals for your sales and marketing teams? Do those goals support and align with the business’s mission?
People are 10 times more likely to achieve their goals when they document them, too. Partnering with a fractional CMO can help you not only outline your marketing objectives but achieve them, too.
2. You’re relying too much on social media
83% of marketers advertise their brand on social media. Although nearly everyone is on social media—and for good reason—it’s not the be-all, end-all. As a CEO, it might be tempting to funnel your resources into Instagram and Facebook, but a strong marketing strategy avoids channel reliance at all costs.
You might be less familiar with them, but other marketing channels are valid, too.
- Email marketing has an average of 4,200% ROI.
- Google Ads generates $40 for every $1 spent.
- Content marketing is 62% less expensive than traditional marketing methods.
While your fractional CMO can certainly provide social media expertise, they can also help you untangle your marketing mix so you devote resources to ROI-positive channels.
3. You don’t know your target audience
As a CEO, you spend a lot of time working with your customers. Chances are, you feel as if you know your customers very well. But you need to carefully consider your ideal audience any time you evaluate a marketing budget.
For example, is your budget allocating $100,000 to billboards? Will your customers see those billboards? Or would Instagram Ads get more customers’ attention?
It’s nearly impossible to invest your marketing budget wisely without researching your audience first. An audience analysis is always necessary: it validates any assumptions you have about your customers.
A fractional CMO will guide you through audience analysis and apply the results of that analysis to your marketing strategy. Once you understand how your audience wants to interact with your business, it’s much easier to dedicate resources to the correct place.
4. You don’t measure results
If you’re managing a team of entry-level marketers, chances are, your business isn’t tracking its marketing performance. You can’t prove which campaigns actually worked if you aren’t tracking your results. You might see the money the department spent on a creative campaign, but are you following the money the campaign brought in?
Proper attribution models will help you focus less on cost and more on true marketing ROI. A fractional CMO will help your team set up proper tracking and attribution for a more well-rounded view of your ROMI.
5. You measure the wrong data
US brands spend $30.61 million every year on marketing data—we’re starved for information about our campaign performance.
Maybe your team has already invested in data. That’s great! But data is tricky: your marketing team needs to track the right metrics to truly understand how marketing affects the bottom line. For example, vanity metrics like website views might sound valuable, but how do those views affect your bank account?
Your budgeting decisions are only as accurate as your data. A fractional CMO will help you track the correct metrics for your unique business situation. This way, you can make decisions based on reality, not on vanity metrics.
When to hire a fractional CMO
As a CEO, you need to create a properly managed, well-defined marketing budget that takes your business to the next level. Avoid these 5 common missteps to manage your marketing budget right from the start.
It helps to have an experienced marketing leader at your side. yorCMO’s fractional CMOs help CEOs make better budget decisions. As a fiduciary partner, your fractional CMO will negotiate with vendors and hold your team accountable for ROMI.
About the author:
Rich is a marketing & advertising executive with a passion for brand building. He has delivered multi-million dollar growth for leading national, regional, and local brands. His deep experience and expertise in all areas of integrated marketing, allow Rich to bring great insight and practical problem-solving skills to any company’s leadership team. Get in contact with Rich and learn how he can help you grow your business: