Why you shouldn't battle for budget scraps
For the right advertisers, the internet offers numerous ways to create demonstrable and predictable ROI from one's marketing efforts. Thus, there is no longer the need for a budget that limits progressive marketers. When one sees positive ROI from a marketing campaign, the profit-maximizing thing to do is spend as much as you can. Unfortunately, this is a completely different mindset from the static, set-piece budget battles that marketers have fought with their corporate counterparts throughout the 20th century.
This might come as a newsflash to those CMOs on calendar-year planning cycles who just went through the budgetary buzzsaw with their CFOs in an effort to beg, borrow, and steal marketing dollars for 2010 -- but it is not a misprint or a delusion. In the past 15 years, the advertising game has been turned on its head by the rise of the internet and the emergence of performance marketing. According to Forrester Research, by 2014, interactive marketing will near $55 billion and represent 21 percent of all marketing spend. Those who understand and exploit the new marketing opportunities will be freed from the tyranny of a "percentage of sales" budget and be empowered to drive increased profits through performance marketing programs that deliver predictable and demonstrable returns on marketing investments.
If you're frustrated by the annual scramble for budget scraps, it's time to initiate a conversation within your company that moves your model beyond the antiquated set-in-stone marketing budget. Read on to gain a better understanding of the case to be made for performance marketing, whereby your success dictates greater marketing reinvestments.