Most marketers today must do more with less.
Faced with steep competition and an increasing number of ways to reach consumers, they need to spend every penny wisely. Setting the right marketing budget is critical. Nielsen set out to uncover how those responsible for their company’s marketing budgets make decisions.
Nielsen surveyed almost 200 marketing budget decision-makers at large B2C companies in the U.S. Their research found that when planning budgets, a majority of B2C marketers cobble together spreadsheets, in-house analysis and agency recommendations, or simply adjust the previous year’s budget. As a result, they don’t have confidence in how they’re spending their company’s marketing dollars.
But there are some practices that marketers who are more confident in their marketing budget decisions have in common. This research report presents the methodology and findings from Nielsen’s survey of B2C marketers with recommendations for how to improve the budget planning process.
The Marketers’ Dilemma
The process of assembling a marketing budget is typically fraught. Marketers must evaluate their performance from the previous budget cycle and make predictions about what impact future activities will have on the bottom line.
Gathering accurate data about spend and performance is challenging. Marketers often have to estimate costs and can be penalized if they wish to grow budgets for untested initiatives or if campaigns from the previous year didn’t perform as expected.
In addition, the process is time-consuming, with some estimates at up to 20%-30% of senior executives’ and financial managers’ time. The bottom line is that the budget process can be a barrier to innovation and improvement, with many marketing executives settling for incremental
changes from the previous period.
B2C Marketers Must Do More With Less
B2C brands face unique marketing challenges.
Those in the retail, financial services, travel, consumer products, health, automotive and food industries must target individual consumers through multiple marketing and media channels. They manage large budgets that typically range from USD $1 million to USD $20 million or more. As the number of platforms, channels and devices has skyrocketed, marketing and advertising budgets have not grown in parallel.
By one estimate, spending on consumer-focused advertising and marketing slowed in 2017. At the same time, CMOs and other marketing executives are being asked to grow results and contribute directly to the bottom line. There is little consensus regarding the best way to allocate budget for optimal return. With a wide array of forecasting models, methodologies and tools at their disposal, many brands continue to rely on external agencies or, in many cases, the humble Excel spreadsheet.
Nielsen Research Overview
In order to understand how marketers are setting their budgets today, Nielsen conducted an anonymous third-party survey of almost 200 marketing budget decision-makers at large B2C companies with over USD $10M in revenue and USD $1M in annual marketing spend in the US.
Nielsen sought to answer some of the biggest budgeting questions facing B2C marketers today:
• How do big B2C brands measure the impact of marketing activities on performance?
• How confident are these marketers in their ability to determine the most effective marketing budget allocation that will drive the greatest return for their brands?
• What sources of information do marketers use when deciding how much to spend and where to spend across marketing and media channels?
• What tools, if any, do marketers use to estimate the impact of their budget allocations?
• How often do marketers have to adjust or re-evaluate their spend changes throughout the year?
The results showed that marketers who use marketing mix modeling or other advanced analytic solutions to evaluate, simulate and optimize decisions about spending have far greater confidence that they are allocating their budgets the right way
If you are interested in further information, read complete report herewith: Solving the Marketer’s Dilemma: How Data-Driven Decision Making Improve Budget Confidence and Results