- Budget planning for B2B CMOs can feel like the plot of the classic movie Groundhog Day
- When CMOs don’t know how their budget compares to those of other companies, they can’t justify their marketing organization
- A recent report from Forrester reveals the true costs of B2B marketing for 2020
In Harold Ramis’ classic 1993 film, protagonist Phil Connors introduced the world to a new meaning of the term “Groundhog Day.” In the film, Connors is stuck in a time loop and forced to relive February 2 over and over. Since then, “Groundhog Day” has become part of the English lexicon, used to describe a monotonous, unpleasant, and repetitive situation.
Unfortunately, B2B marketers are experiencing their own version of Groundhog Day when planning their budgets. Every year they take the same approach: They base budget plans on last year’s program and personnel investments and structure them to match their own organization. The unintended consequences of these decisions are that when budgets come under scrutiny, they’re hard to defend because marketers can’t demonstrate how they’re aligned to the business’s revenue engine.
Today’s B2B marketing leaders need better planning information to avoid the tragic cycle of repeating past budget planning mistakes. They should leverage an external benchmark to understand the investments other B2B companies are making in marketing. The benchmark should include information about budgets across companies of different sizes and industries and address the various ways in which companies allocate their marketing budgets across the globe.
Marketers also need better insights into how to structure their budgets. Instead of allocating budget to the different teams that make up their organization, they should allocate budget to the integrated campaigns designed to support the key revenue generation initiatives on which the business is focused. By taking this approach, marketers can demonstrate how their investments support the company’s business objectives. Additionally, by using tools like the Demand Unit Waterfall™, marketers can show how budget increases, decreases, and reallocation will drive different performance results — and when asked to show how marketing contributes to the company’s bottom line, they can answer easily.
Several years ago, we began benchmarking marketing budgets across B2B marketing organizations of all sizes to identify how they were allocating resources. By running the survey for more than a decade, we detected spending trends. This information has become the most widely known baseline into marketing planning efforts across B2B companies everywhere. In 2020, we redesigned the study to capture information in different categories to better assess the alignment of the marketing budget with typical B2B business objectives.
To learn more about the study and its results, join me and Robin Mackenzie for a webinar on November 18 in which we’ll reveal the new budget data architecture and budget benchmark information from 2018 through 2020. We’ll explain the important trends in the data and show how marketers can structure their budgets to demonstrate a better connection to their company’s revenue engine.
The film Groundhog Day portrays eternity as a repeating cycle instead of a straight line, and the only way Phil Connors can break the cycle is by changing his behavior. The same is true for B2B marketing leaders: They need to break the cycle of bad budgeting by adopting behaviors that drive more effective alignment of the marketing organization with business objectives.