Part 2 of 3 for newly minted, budget-responsible B2B marketing professionals
At the risk of stating the obvious, your marketing budget has three kinds of resources (people, money and time). Budgets address people and money; these determine your affect in the allotted time of one budget year.
It may feel like budgeting mires you down in a cesspool of wasted time (read my related “lesson learned” in Part 1 of this series). But used correctly, it is your best opportunity to:
Quantify your team's value
Showcase what you can achieve
Set company expectations
Have an intelligent conversation with your manager throughout the year -- especially during budget cut rounds.
Budgets are about much more than requesting funds.
First and foremost, take care of your people and yourself
That headline is another obvious statement, but how many of us haven’t experienced overwork to the point of exhaustion? Most marketeers are ambitious and full of ideas, often willing to go the extra mile to bring those ideas to fruition. And we often underestimate how much time a given activity will take. Before you know it, we’re burning the candle at both ends. The process of creating a budget proposal, then a budget, and finally an activity plan is an excellent way to save you from yourself.
"We can't afford to do that. We'll just need to do it ourselves."
Have you heard that before? As marketing manager, you owe it to your department to point out that "doing it ourselves" isn't free. Planning marketing resources is especially tricky because there is so much collaboration and co-creation. The lines between "people" and "budgets" are blurry.
It takes a while - especially the first year - to make a good budget. I always start by mapping people's time. It may sound counterintuitive, but it takes time to spend money. There’s no point in securing a large budget if you don’t have the people to manage the projects..
You can calculate time by identifying the number of working hours in a year. In Denmark, with 6 weeks holiday plus an estimated 2 weeks for public holidays and sick days, each person is available 1,628 hours per year over a period of 44 weeks (37 hour work week).
A good rule of thumb is that general activities like reading emails and intranet, fetching coffee, and attending company meetings take 20% of an employee's time, So effective working time is about 30 hours per week..
How to calculate the time it takes
List all tasks on a spreadsheet. I usually approach tasks in this order:
Routine tasks expected or committed, like social media, website maintenance and Adwords
Committed annual activities, like product launches and events
Activities driven by marketing, like brand campaign or marketing tests
Hint: it takes more time than you think
Once you've listed all the tasks, you just need to visualise the process. Don't forget that there is almost always time spent pre- and a post-activity.
Let’s drill down for a minute about estimating the time it takes to execute social media. I often hear people who work with social media lament over how much time it takes. And no wonder. If you asked someone in the lunchroom to estimate how long it takes to manage social media, you might hear something like 10-15 minutes per week. But when you break down the processes, the number is more like 2 hours per week. The gap between the expectation and reality can make the work incredibly frustrating
Let’s say you post twice per week on LinkedIn and once per week on Instagram. Your general rule is 50% of the time you can adapt one of the weekly LinkedIn posts to Instagram, and 50% of the time you need a unique Instagram post. (In this example posts exclude video, graphic creation or landing pages that take either additional time or money. You can always add those in as an extra line item on the budget)
See how I calculated the two-hour per week commitment to produce 3 social media posts per week
Most people who do this exercise are surprised at how much time it takes to do a good job. No wonder marketing departments experience there is so little time for follow up and analysis. When you estimate time as in the below spreadsheet, you also see the cumulative effect of how others in the department contribute to the same task.
Example of a marketing departments' estimated time usage. Unforeseen activities will occur during the year, so it's a problem if you are already in the red.
How much money does it take?
Many tasks require a budget, and your job is to ensure your available budget matches available hours to execute your plan. So open a new worksheet and start listing expenses. I recommend you create your budget worksheet with:
A column for each month
Rows organised by topics, such as:
Subscriptions
Tech stack development
Exhibitions & events
Ads
Running costs with freelancers
Extraordinary campaign creation.
You may also have wages and training in your budget. (Remember to reduce available work hours if you budget to send someone to a course.)
Get clarity about shared costs with other departments
Each company is different, and sometimes budgets belonging to other departments will affect your work. For example, some companies put marketing IT costs under IT’s budget. If this is the case for you, then someone from IT would likely be involved in any platform development. So, for example, if you need to add functionality to your website or improve data integration in your frontend stack, you’ll need to ensure that IT can also offer a person to help manage that project at the same time you want to work on it.
Here are 3 pieces of advice about budgeting for digital costs:
A website and your frontend stack are never done
They need continuous updates and improvements.. A good rule of thumb is to budget 10% of the original website development cost each year for website development. If you don't have in-house developers, set aside a separate budget for tweaks and fixes. Frontend stack investments tend to be periodic.
Time your translation costs
Get familiar with digital roadmaps
Start with annual commitments and then address costs for activities unique to the year
First list all fixed or committed costs. Then it’s time to look at variable costs. First I look at projects which are in the company’s plan and require your support. In other words, you can't say no to these activities. Examples of this are:
Product launches
Exhibitions and events
Entry into new markets or verticals
For all of the above, you should quantify both the amount it will cost and the estimated time it will take you and your team to execute.
You can save time by outsourcing to specialists but don’t neglect thinking through the process and how much time it will take to project manage it. Even something simple like a LinkedIn campaign for your product launch may take more time than you expect. For example, consider these costs and the time needed to keep them on track:
Ads: per view or click
Run and optimize the ads
Create the content.
Update content based on performance
Create analytics of ad campaign. You need the report both to learn how to improve and to show the value of these campaigns to stakeholders
Find room for blue sky
Up until now, everything you’ve budgeted is to execute something you or others in the company previously committed to. This is a good time to take a critical look and determine if it is all still justifiable. If not, now is the time to take that subject up with your manager.
If you don't have any hours left for for marketing-driven projects like company branding campaigns, activities that will support reputation building or to test out ideas to improve your marketing effectivity, consider it a red flag. There should always be some room for these activities.
It can be a good idea to work out two budget versions. One version to show management what they will get with status quo and another to show what they will get by thinking differently or upping your budget and/or headcount.
It's not worth doing if it's not done well
Budget planning requires a few hours of uninterrupted concentration. Don't lose hope. Granted, it’s impossible to record the time it takes for each process. And sometimes you may record something that will be covered elsewhere or forget something altogether. Don’t worry. It won’t be perfect and it doesn’t need to be. Marketing is dynamic and things will change throughout the year anyway. But with this method you will:
Have a much clearer idea of what you can accomplish; the best medicine against burnout
Be able to explain the coming year to your team
Be able to have concrete conversations with your manager about your department’s needs
Will be better equipped to manage change in your resources throughout the budget year
Most of us have been in the situation where we’ve needed to cut a budget. When your boss says you need to reduce your budget by 20%, it can seem painless to go from 100 to 80. But when you’ve worked out your annual commitment in this way, you can enter a constructive conversation about the specific activities you won’t deliver. It can be disappointing to scale down, but when you have a tool like this you can ensure that expectations for what you will deliver will be scaled down as well. And with that, you’ve come full circle and delivered on your most important task – taking care of yourself and your team, so you can be ready for another day.
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