Fundamentals

Why does marketing needs a framework for budget planning? Learn about necessary steps that need to be done prior to any marketing budget planning.

Marketing needs its own budget framework

Finance focuses on cost centers and cash flow. Marketing needs a structure for growth metrics and campaign management. Build your framework to track spending by marketing-relevant properties. Use categories like business goals, channel types, and initiative status.

Control your real-time spending data

Don't wait for monthly finance reports. Set up automated cost tracking from ad platforms. Use budget tools with Slack notifications for expense updates. Analyze variance analysis, YTD and remaining budgets by categories.

Consider setting up automated alerts for when spending reaches certain thresholds of your allocated budget to stay proactive with your tracking.

Define your budget structure first

Choose how you'll analyze the budget before planning expenses. Common breakdowns: marketing goals, expense categories, initiative types. Pick 3-8 main categories to keep analysis manageable. Avoid an "Other" category that becomes a dumping ground.

Run pre-approval analysis

Most CMOs skip analyzing their budget before submission. This leads to multiple revision rounds. Check metrics like quarter-over-quarter growth and budget-to-conversion ratios. Create charts showing these metrics. Stakeholders will require them during approval anyway.

Skipping pre-approval analysis often results in multiple revision cycles and delays in getting your budget approved. Invest time upfront to save time later.

Clarify your planning autonomy upfront

Ask direct questions. Should you propose target numbers or work within given ones? Can you suggest budget ranges? Will you need multiple versions? Understanding these expectations prevents creating misaligned plans.

You have freedom to move budgets

Your CEO and board care about hitting targets within the total approved budget. The exact original plan matters less. Move money between channels freely during the year. Keep total spending within limits. Shift funds from underperforming to successful campaigns as needed.

Learn finance team language

Master key finance terms to be treated as a business partner, not the biggest cost center. Know cost centers vs marketing categories. Understand fiscal year structure. Learn how finance calculates KPIs like ARR. This expertise speeds up approvals and builds CFO credibility.

Building a strong relationship with your finance team and speaking their language can significantly smooth the budget approval process.

Focus on fixed vs variable cost ratio

Finance teams scrutinize fixed costs like headcount. These are hardest to reduce if needed. Keep most spending in variable costs tied to performance. Think channel media spend vs salaries. This shows you can adjust quickly if conditions change.

Make growth investments visible

Separate existing programs from new growth initiatives. Show timeline and success metrics for each new investment. This clarifies both maintenance costs and growth opportunities.

Start with historical performance

Base planning on last year's actual results, not the original budget. Look for patterns in channel performance and seasonal variations. Use this data to justify continuing successful programs or reallocating resources.