Managing marketing budgets under pressure: how to do more with less

Ruth Saunders

INTRODUCTION

In recessions, marketers are often under pressure to ‘do more with less', with CEOs demanding marketing budgets to be cut and yet sales to be maintained. This creates two major challenges for marketers:

  • How to justify the ‘black hole’ of marketing spend, showing how it directly impacts sales and thus generates a valuable return

  • How to reduce spend whilst maintaining sales in both the short-and longer term (when the brand equity decay has kicked in) by identifying which part of the budget should be cut and how to allocate the rest of the spend to buoy up sales.

As many of us have experienced, it can be difficult to measure the overall return of marketing spend as well as isolate the ROI of specific marketing mix elements, with marketing still being relatively backward in justifying its commercial contribution at the Board table. As John Wanamaker famously said "I know that half my investment in advertising is wasted, but the trouble is I don't know which half".