The Marketing Bureau


Specialist Marketing & Communications Resourecs

19

Sep

A CMO's Guide To Finding Cash


By Scott Esmond
First Published on www.imediaconnection.com


Among all the painful business learnings driven by the recent economic challenges, the increased demands on CMOs to deliver measureable results and ROI on marketing dollars is one that is here to stay.

Marketing leaders are rising to the occasion and are looking at their deliverables and relationships with an economic mindset that seeks to quantify value and deliver assets. If you're among those who have done the math to justify your marketing, here are five tips for finding or creating budget.

Enroll Other Departments
Your digital presence should support more than just converting customers. One of the best things a CMO can do is determine how your efforts are benefitting the various departments and seek out budget assistance for their piece of the online customer relationship. For example, if the site hosts feedback forms or customer support tools, then the customer service department is getting value through time saving and satisfaction and should provide funding in exchange for those returns. If your website includes a job board, then some of the money from the website could be coming from the human resources department. If you're not doing so already, configure website analytics reports to track key metrics for various departments to justify budget from them to support their related objectives.

Look at OPEX and CAPEX
Operating expenses are the cost of doing business (advertising, rent, utilities, insurance, supplies, etc.). Capital expenses are newly purchased assets or investments that improve or extend the life of an existing asset. Your entire digital presence likely originated as a marketing investment to create an asset years ago (CAPEX), but many aspects have matured to be considered a necessity, or cost of doing business today (OPEX). Opinions might differ among CFOs and controllers on how to approach digital assets. Today, companies are funding digital initiatives such as search engine optimization, website maintenance, and even the website itself from operations budgets. Additionally, speak to your CFO, controller, or tax advisor for guidance on classifying your investments in digital. From a tax perspective, a capital asset might qualify for accelerated and bonus depreciation that can assist companies in minimizing their corporate taxes all the while improving book earnings. If your company is not tax motivated, you can still capitalize the asset and utilize the depreciation expense over the useful life of the asset. Either way, a company can generate significant benefits from capitalizing these costs from both a book and tax perspective. Taking this CAPEX approach into consideration can offset the out-of-pocket costs. Conversely, operating expenses show up on the income statements immediately and don't offer any future benefit or tax flexibility.

Hold Your Partners Accountable To Your Goals
The economic landscape is also changing for marketing firms, and those that are thriving are realigning to support you and your performance requirements. If you truly view your agencies as partners and are transparent with your goals and challenges, asking them to put skin in the game is a good conversation for all parties. Shared success models succeed on trust, transparency, clear metrics, and defined responsibilities. It also helps to have at least one year of working together for a baseline. If your existing partners are simply delivering less with less, they are either not allowed enough control to own results or it's time to explore how other agencies are aligning their models around the realities of your foreseeable future.

Get Agile
Agile is a methodology that has grown beyond its IT and engineering origins. More business leaders are embracing this management practice for its purpose to break complex projects into smaller and faster deliverables while being nimble enough to accept change. When led by empowered individuals from your team in collaboration with a skilled partner, the agile process can demonstrate incremental results through tangible, iterative improvements instead of relying on the success of one large, inflexible deliverable. When working on your website, for example, this style of development can allow you to define and launch incremental releases that each deliver measurable improvement and collectively represent your entire vision for the website.

Share The Spotlight
Investigate the feasibility of joint marketing initiatives with key partners. Do a quick audit of your vendors and partners and determine which share at least some of your goals as well as relevancy with your audience. If you have a solid understanding of your consumers and their brand preferences, consider reaching out to some of those preferred brands to explore opportunities. Retail companies such as Walmart are doing this by asking brands to divert marketing dollars proportionate to their share of sales to Walmart marketing programs. In a more collaborative approach, leveraging each other's brands in a concerted and mutually beneficial way should lead to new interest at a lower cost basis. The digital landscape lends itself very well to this through cross promotions in your email and social media channels.

If your marketing department is feeling the squeeze, get creative and uncover ways in which you can obtain money from other departments, leverage joint marketing initiatives, ask marketing partners to financially commit to your success, and demand incremental improvements within your marketing projects. You'll probably never have access to your ideal budget again, but these are some clear way we've seen leading businesses get the most out of what they have.

 

Scott Esmond is director of business development at Red Door Interactive.

 

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