Cash, Lies and ROI, Redux: 3 Signs Your Marketing Budget Is A Flight Risk

First, it's important to understand why budgets are growing. In my CMO peer groups, I'm seeing four main reasons:
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On a sunny July 6, 2013, morning, Asiana Airlines flight 214 entered its final approach at San Francisco Airport. With four pilots in the cockpit, the jet was cleared to land with visual approach on runway 28L. At the time, the Instrument Landing System (glide slope) on 28L was out of service.

Sadly, things went terribly wrong, terribly fast. Asiana’s pilots approached the runway 40 knots slower than the recommended landing speed, resulting in the tail falling off, a cabin fire, and the loss of three lives.

In the days that followed, some experts and authorities speculated that Asiana’s pilots have a reputation of being overly reliant on instrument-guided landings and inferred that the faulty ILS may have caused the calamity.

How many marketing leaders rely heavily on analytics, business use cases, and spreadsheets to guide their organization’s customer and demand generation initiatives? In my experience, over-reliance on these analytical instruments is a recipe for too many go arounds -- some of which can be extremely costly.

First, it’s important to understand why budgets are growing. In my CMO peer groups, I’m seeing four main reasons:

  • Explosive growth in reliable marketing technology solutions. The advent of marketing analytics and big data to make informed strategic decisions, profile customers more accurately, and track campaign results now provides marketing leaders with powerful decision-making ammunition. Companies such as HubSpot, Oracle/Eloqua, and Marketo are industry darlings. Boards of directors love these products. So do CEOs and CFOs.
  • Increased receptivity to fuel integrated marketing efforts that blend online and offline elements. While digital budgets are growing, marketing department leaders also continue to invest a healthy portion of their budgets in offline events. These may include exclusive breakfast seminars, customer appreciation events, and awards programs.
  • Reduced reliance on IT for day-to-day direction and support. Most of today’s marketing operations, lead generation, and data analytics tools are cloud based, so IT is not needed to install and support them. Marc Benioff, CEO and Founder of Salesforce.com, is known for coining the company mission “The End of Software.” This moniker resonates within his company as well as within Salesforce’s monolithic partner ecosystem. According to Penny Herscher, CEO of big data solutions provider FirstRain, “We are seeing increasingly where Marketing is in the (budget) lead. They have to be the arbiters of the decision. Many IT departments are feeling left out, and less influential.”
  • A mind-set shift from managing costs to driving top-line growth. Companies are emerging from a cautious investment spell fueled by the Great Recession. While this is a refreshing transition, it requires marketing leaders to choose from a broader spectrum of investments. Many, such as predictive analytics, are not yet proven and require a “big bet” mind-set. Not all leaders are accustomed to embracing this level of risk. But those who are willing to create a “marketing innovation slush fund” are reaping rewards.
  • Marketing leaders face many opportunities to grow their budgets and support an increasing number of strategic programs. Yet expanded authority does not give marketing leaders license to fly at unsafe speeds or altitudes. In fact, the biggest obstacle on the runway is their organization’s resistance to change and turf battles.

    My next post will address the greatest causes of CMO budgeting resistance. In the meantime, don’t let these high-speed trends run your marketing organization aground.

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    This post originally appeared in FastCompany.

    [Image: Flickr user Angelo DeSantis]

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