Fall has officially arrived, bringing Eagles football and pumpkin flavored coffee from Dunkin’ Donuts (not our client yet). Before I go any further though, I should introduce myself: my name is Michael McCall, and I am the Director of Strategic Account Leadership and Development at i76 Solutions. I hope you enjoy my blog, and if you have any questions, such as why my title is so long, please ask James Huth.
Marketers will be faced with many tough questions over the next year. First and foremost, they have to allocate their advertising and marketing budget. Digital, broadcast, event marketing, research—the choices are endless. Unfortunately, there is no magic formula: all organizations are unique, and all business verticals face different challenges. Your competitive landscape, your industry’s growth stage, and your evolving target markets are important factors to consider when in deciding how to allocate your marketing dollar.
However, I’d like to share what I’ve found to be a good starting point for budget allocation, as well as a current trend regarding both online and offline advertising. Based on my research, and recent conversations with CMO’s, this is an estimate of how the advertising pie is currently being divided:
This can serve as a useful baseline when preparing your budget. You can also figure on your competitors doing something like the above, so whether you’re trying to catch up in some areas or trying to zig when your competition is zagging, you now have a reasonable starting point for your planning.
Speaking of planning, I recommend using the 70/20/10 rule. This rule (credited to Morgan McCall, no relation) applies to professional and workplace learning. Although the original model was intended for leadership development and management trainees, many within Learning and Development are applying it to other vocations. The marketing model suggests that 70% of investments should be in established and successful programs; 20% should go to emerging trends that are starting to gain traction; and 10% should go to ideas that are completely untested.
According to the 2014 fifth annual Marketing Budgets Report, published by Econsultancy and sponsored by Responsys, there continues to be a shift from off-line to on-line advertising. This report, a survey of more than 600 company and agency marketers, suggests two things.
- Agencies are investing more of their clients’ budgets in digital marketing. In 2014, 50% of agencies plan on investing 30% or more of their clients’ budget in digital platforms, versus 38% in 2013.
- On average, 38% of their total marketing budgets are being spent on digital, which is a 3% increase from last year’s figures.
My conclusion from this report: if it’s not broken, break it! Technology is changing daily, and you can’t afford to not to be proactive. I would even encourage advertisers to carve out a small portion of their budget (around 5%) to test emerging advertising mediums.
Where is technology going? How can you acquire greater intelligence to measure ROI? These are the questions that need to be continually asked. Lastly, if you haven’t had it, try the pumpkin flavored coffee at Dunkin’ Donuts, it’s worth the trip.
P.S. Go Birds!