Should marketing spend be cut when times are tight? - #WednesdayWisdom

All businesses inevitably hit rough patches. Maybe cashflow is a temporary issue as customers are late with payment, better results are required following a heavy investment or you've just lost a key account and need time to regroup. It's not a time to be taking risks or spending money speculatively.

The marketing budget is a very tempting area where quick cuts can me made. Digital Marketing is a long-term investment and needs continued and sustained effort before the returns become fully apparent and consistent.

Cost-cutting decisions are made at board level. And when budgetary decisions are often driven by accountants. They will be acting with the best intentions, but the truth is that they may have no clear understanding of what revenue is being generated as a result of what is being done. And, if they're not shown this in good old fashioned number format, you will have a hard time persuading them otherwise. The axe will come down hard. Much to the bemusement of your digital marketing partner.

So, should you cut spending or not?

If you're running a current campaign within a sensible budget and it's generating more cash than you are spending, then the answer is almost always 'no'. Then again, being digital marketing professionals, we would say that wouldn't we? Well, that's actually not necessarily the case. The saying goes that you should never bite the hand that feeds you, but that's only true if you actually know how much it's feeding you.

This is why performance tracking is crucial for every digital marketing campaign.

The importance of measuring success

Your digital marketing team should have been sending regular reports on what a good job they've been doing for you. They show a lift in web traffic and ultimately an increase in goal conversions. If they haven't been sending reports, then they're not doing their job properly because you have no data to go on and could be wasting money. You have no data to show success and marketing cuts are unavoidable.

Maybe you've been getting the reports but with everything else that you need to do, you've been neglecting to read them. As long as they send them to you, you have the historical data there to speak to them about and assess things for yourself. Maybe you can see the improvements from an analytical side in their reports, but haven't yet translated that into revenue. For example, when you see there have been loads more enquiries coming in through the website, you should be speaking to your sales team to find out how many of these enquiries were turned into orders and what the overall value was.

Your digital agency should supply you with accurate website reports and share access to all analytics accounts. This means that on an ongoing basis you can track what your conversion rate is from incoming lead to ultimate sales.

Once you have this information to hand, it's much easier to persuade an axe-wielding director that they're aiming to make a cut in precisely the wrong place.

Big Red Digital take a blended approach to digital marketing. We share as much data with our clients as we can (without boring them to tears) and make sure we know as well as they do what return is being generated as a result of our work. This is how we build our case studies. If you need to track your ROI more accurately, you need to get in touch with me now.

By Steven Blood