4 Steps to Forward-Looking Budget Planning for Marketing Leaders

An evolving landscape requires a new lens to look at budget planning. But unlike past years where marketing leaders focused heavily on backwards-looking performance metrics to plan for and predict future budget needs, we’re in a unique time when future-looking insights are at your fingertips. Such insights can advance your ability to build sustainable budget plans to tackle even the most complex business objectives for 2024.

We’ve all heard (and had) this conversation before: “What worked last year?” Add to that the pressures of having to do more with less and marketing leaders are all-of-a-sudden caught between a rock and a hard place. In 2023, Gartner found that marketing budgets would remain flat, year-over-year, at 9.1% of overall company revenue versus 9.5% from the year before.

Marketing analytics teams spend time and resources providing marketing mix modelling (MMM) and multi-touch attribution (MTA) performance report cards to their stakeholders to measure past results and provide forward-looking recommendations, which are used to make decisions on next steps. But historical performance does not dictate what will happen in the future. And by the time you get recommendations from MMM and MTA, it’s too late to use the data. For example, numerous scenarios could play out that impact your financial forecasting and budgetary planning for next year:

• Consumer demand fluctuates due to the changing national unemployment rate
• Economic environment changes quickly as interest rates rise even higher
• Supply chain challenges result in a decrease in product supply
• Your competitors increase their media investments, reducing your brand recognition

It’s difficult to shift the culture within an organization from making budgetary decisions based on historical performance, to making decisions based on forward-looking predictions and all-encompassing forecasts. It’s a collaborative, lengthy process to establish budgets, and it takes a village to shift all stakeholders with an entire company to think about planning cycles in a new way. However, focusing solely on historical performance creates a vacuum. It leads to reduced time and resources for marketing analytics teams to look ahead and provide value. Companies looking to drive growth know that becoming truly data-driven is paramount to success, but until the process of extracting value from data becomes seamless, that adoption barrier will remain.

How can marketing analytics teams deliver more value during budget discussions and shift the culture of decision-making? And how can marketing and business leaders make every dollar count toward the bottom line? The following four steps outlines a data-driven, forward-looking program that can deliver optimal budget planning strategies:

1. Open the black box measurement process

   Surface timely insights on what’s happening behind the scenes with an always-on dashboard that surfaces statuses and guided workflows. Share current steps and the path ahead. The transparency on data accuracy, analytics and timelines builds credibility and confidence in planning and decision-making.

2. Speed up cyclical planning cycles with always-on planning

   Provide insights for decisioning at different cadences based on business needs and speed using the same model to increase accuracy and precision.

   • On Demand (Cyclical) – annual, bi-annual, quarterly or timed during key business planning cycles to help brands make critical decisions on business drivers and long-term strategy.
   • Live (Always-On) – fine-tune activities on the fly and continuously optimize levers within tactics and channels to adjust to a dynamically changing and evolving market.

3. Evaluate multiple scenarios at once to proactively plan

   Evaluate different investment scenarios to evaluate plans at a fast pace. Incorporate multiple business objectives in a single scenario to weigh different goals to give your team a roadmap of next steps.

4. Collaborate for more accurate financial forecasts

   Continuously anticipate and react to change and share updated insights across functions and teams. Adapt and pivot to changing market conditions, adjust assumptions, and optimize to deliver more accurate forecasts for monthly to annual planning. This flexibility builds credibility and transparency into planning and decisioning with stakeholders.

The four steps we listed above are crucial for marketers can get ahead of the challenge of budget planning season. Shifting the focus from backwards-looking reports, to forward-looking decisioning can help marketers change the perception that marketing is a cost centre, and that it is adding value to the business. Plus, these steps can help maintain, and even grow marketing budgets for the upcoming year.

Putting these four steps into practice is impossible without the use of a technology platform to speed up insights, increase the precision of analytics, and collaborate with stakeholders to drive adoption.

If you’d like to learn more about how brands are partnering with Analytic Partners to build a Commercial Analytics Program and how they’re utilizing our GPS-E platform to take these steps to grow value for their businesses, please contact us here.

P.S. Check out our recent announcements to GPS-E enhancements for forward-looking decisioning!