Marketing Leaders: How To Secure And Prioritise Your Budget For Maximum Impact

The current economic landscape is challenging, and marketing leaders are under pressure to do more with less. While budgets are shrinking, CMOs still need to deliver results.

In 2024, it may be harder to secure your marketing budget but it’s still possible to get what you need for maximum impact.

In this guide, we’ll show you how to secure and prioritise your budget to drive qualified leads and grow revenue. We’ll also discuss the current trends in marketing budgets and how to bridge the gap between CMOs and CFOs.

Current marketing budget trends

As a CMO, you’ll be all too aware that overall marketing budgets have significantly decreased in recent years. This is due to numerous economic pressures, such as rising interest rates and inflation.

So, how is this reflected in current marketing budget trends? Let’s take a look at some statistics from Garnter’s CMO Spend Survey to develop a clearer picture:

• In 2024, marketing budgets equate to 7.7% of total company revenue compared to 9.1% in 2023.
• There has been a 15% decline in marketing budgets year-over-year since the pandemic.
• Almost 64% of CMOs say they lack the necessary budget for their 2024 marketing strategy.

The survey also highlights how budgets are typically allocated in 2024. Digital marketing now receives 57.1% of CMOs’ budgets. The three digital marketing channels that are allocated the most investment are:

• Search (13.6%)
• Social advertising (12.2%)
• Digital display advertising (10.7%)

These channels are increasingly favoured by CMOs because they are perceived to provide the most opportunities for revenue growth.

Based on these trends, it makes sense for you to allocate a large proportion of your budget to these channels too. By doing so, you give your marketing team the best chance of generating growth and justifying your marketing budget to your CFO.

Do CMOs and CFOs agree on marketing budgets?

Within B2B companies, it’s crucial that finance and marketing teams work together closely. Marketing initiatives need to be aligned with the company’s financial goals to drive revenue growth and enhance overall performance.

Across all industries, there is some agreement between CMOs and CFOs about how their marketing budget should be allocated. For instance, according to a Croud survey, both CMOs and CFOs say their top two priorities are driving revenue growth and business efficiency.

However, the two are divided when it comes to their third biggest priority:

• 44% of CFOs say it’s embracing new tech, such as AI.
• 42% of CMOs say it’s launching new products and services.

The most worrying statistic for CMOs is that only 45% of the CFOs surveyed agreed that marketing is a critical function within their organisation.

There is a clear disconnect between the perceived impact of marketing and its actual impact on B2B companies. As a CMO, it’s your job to alter this perception within your own organisation—but how do you do this? Let’s take a look.

How CMOs can secure their marketing budgets

Fortunately, there are a number of ways in which CMOs can ensure they receive marketing budget approval from the finance department.

As you can see from the statistics listed above, it’s highly likely that your budget for 2024 will be lower than previous years.

However, you can still secure an effective marketing budget based on your company’s needs, past marketing results, and projected revenue gains. Here are some of the ways you can do this.

Analyse the budgetary landscape

Before you propose your marketing budget, evaluate the current budgetary landscape closely. Familiarise yourself with the key pressures, like market volatility, that are leading to reduced budgets.

This allows you to frame your budget requests effectively by highlighting the necessity of marketing investment to drive revenue growth—even during financially challenging times.

It’s also wise to research historical budget allocations and shifts in marketing spend during past economic downturns. This helps you identify patterns you can use to justify your requests.

For example, 60% of brands that significantly decreased their marketing spend during the 2008 financial crisis saw a 28% reduction in brand awareness. These are the types of historical patterns you can emphasise when making your pitch.

Align marketing goals with business objectives

To secure your marketing budget, it’s essential that you align your marketing goals with the objectives of the overall business. To do this, present your marketing initiatives as drivers of revenue growth rather than mere expenses, which is how they may be viewed by CFOs.

To demonstrate the value of marketing to CFOs and other stakeholders, emphasise strategies that have a direct impact on the bottom line. This could include adopting a revenue growth marketing approach where each campaign is tied to highly specific revenue outcomes with measurable results.

For example, you could propose a strategy that targets high-value customers with personalised campaigns. This approach would involve increasing conversion rates via a process of continual testing and data analysis.

There are other examples of marketing strategies that closely align with broader company objectives, including:

• Loyalty programmes that improve customer retention.
• Content marketing campaigns that improve brand awareness and directly support goals like market expansion.
• Social media ads that drive increased sales among C-suite executives.

Demonstrate marketing’s ROI, CAC and CLV

When it comes to budget allocation, demonstrating the ROI of your marketing activities is vital. It shows CFOs how much revenue is generated from the organisation’s overall marketing spend.

However, ROI isn’t the only metric you should track and present to the finance department. You should also pay attention to customer acquisition cost (CAC) and customer lifetime value (CLV).

If you present a favourable CLV-to-CAC ratio as part of your budget proposal, it shows that your marketing efforts will acquire customers who generate significant revenue over time.

Build collaborative relationships with CFOs

In the Croud survey, 23% of CMOs and CFOs said that a lack of collaboration is a major stumbling block when allocating a marketing budget. Clearly, this means that enhancing collaboration with CFOs is an important factor in securing your budget.

Here are some tips on how to do this effectively:

• Early involvement: Involve CFOs in your marketing budget planning as early as possible. Ideally, they should be involved in the first steps, such as the market research phase. This encourages a collaborative environment where finance and marketing are on the same page. It also helps more realistic financial and marketing goals to be formed.
• Incorporate CFO insights: One of the best ways to help CFOs understand the rationale behind your marketing initiatives and specific requests is to involve them in discussions and incorporate their insights into your budget proposal. This makes it easier for you to pursue strategies that are financially viable and aligned with the company’s goals. As a result, your proposal is more likely to be accepted.
• Regular meetings: It’s also important to hold consistent strategy meetings between finance and marketing teams. This reinforces collaboration and helps both teams understand each other’s objectives and challenges.

Building collaborative relationships is essential for securing your budget and ensures that finance and marketing work together to grow the business.

Utilise data and analytics

Earlier, we discussed demonstrating ROI, CLV, and CAC when securing your marketing budget. Although you can work these out using formulas, it can be time-consuming and lead to errors. The most effective way to evaluate them (and other metrics) is to use real-time reporting and predictive analytics.

In particular, dashboards are a great way to visualise real-time marketing performance metrics. Software like Funnel and Improvado aggregate data from various channels to provide insights into performance. You can then present this data to CFOs in an easy-to-understand way.

Predictive analytics tools are very useful for forecasting ROI. They allow you to project how different budget allocations could impact revenue generation. So, you can use this data to clearly demonstrate why you’re making specific budget requests.

Use benchmarks for budget advocacy

Benchmarking your marketing budget against your competitors is another effective strategy for securing your budget.

It enables you to compare your budget with industry standards and can be used to justify why you need increased funding.

However, for this strategy to be effective, you’ll also need to highlight how other companies have improved their performance with an increased marketing budget.

To do this, you can use case studies of your competitors that outline specific marketing strategies and the results. For example, a competitor may have increased their marketing budget by 5% and seen a 15% increase in their sales.

Just remember, whenever you share case studies, you should focus on quantifiable metrics like CLV, ROI, and market share growth. This demonstrates the fact that increased funding is an investment with measurable results.

How CMOs can Prioritise their marketing budgets for maximum impact

Once you’ve secured your marketing budget, you need to prioritise and allocate it effectively to ensure you achieve maximum impact for your business. Here are some strategies you can use to do this.

Identify KPIs

Identifying KPIs for your marketing strategy is a crucial step. In fact, 25% of the CFOs and CMOs in the Croud survey said that misalignment on KPIs was a major issue. Plus, if you fail to identify KPIs, it can lead to a lack of strategic direction and misaligned budget allocation.

So, how do you ensure that your marketing team is aligned with finance when it comes to KPIs?

First, you need to identify the key focus areas that are critical in helping the organisation achieve its goals. These typically include:

• Customer engagement
• Revenue growth
• Brand awareness

The KPIs you choose should be specific and measurable. For instance, instead of simply tracking website traffic, you could measure the number of unique visitors your site receives from targeted marketing campaigns within six months and the number of leads generated.

You also need to ensure the KPIs are realistic by basing them on industry standards. For example, in B2B SaaS, the average lead-to-MQL (Marketing Qualified Leads) conversion rate is 39%.

Identifying KPIs helps you focus on high-impact channels, which we’ll cover next.

Focus on high-impact channels

Your marketing budget should be allocated in a way that prioritises the most high-impact channels. Of course, there are many ways to measure the impact of a channel, but ROI is perhaps the most important metric for CFOs.

In 2024, SEO has the highest ROI of any B2B digital marketing channel, at 748%. As a result, SEO should be a high priority for any CMO to invest in.

When it comes to SEO, you have two options: keep it in-house or outsource it to an agency or consultant.

While using an in-house team might seem appealing at first, it has several downsides. For a start, it’s usually much more expensive to build an in-house SEO team than outsourcing, as you need to hire a number of skilled employees with high salaries.

Additionally, creating effective SEO campaigns is very time-consuming and takes experience and expertise to get good results.

The best way to keep costs down, save a tonne of time, and guarantee success is to hire an expert consultant like Growthack.

With our Enterprise SEO service, you get a highly experienced team that will design and execute a winning strategy for your business. We perform thorough keyword research, develop a bespoke content strategy, and optimise your entire site to drive qualified B2B leads and increase revenue.

Conversion rate optimisation (CRO)

CRO involves using strategic tactics to optimise your pages in order to improve your conversion rates. Essentially, it’s the process of turning qualified traffic into conversions, resulting in increased revenue.

One of the cornerstones of CRO is prioritising high-intent keywords over high-volume keywords. Users searching for high-intent terms are more likely to convert than those who are searching for broader terms.

Other tactics, like in-stock notifications, have also been shown to significantly increase conversion rates. In fact, 67% of B2B businesses use them to boost their conversions.

If your SEO team or consultant doesn’t use strategies like this, it can result in low conversion rates, misaligned search intent, and lost revenue.

So, it’s crucial you allocate a portion of your budget to CRO. The best way to do this is to hire an experienced SEO consultant like Growthack Digital.

Our CRO service consultants will create SEO content that clearly demonstrates the value proposition of your products/services and highlights their key benefits. Plus, we’ll strategically incorporate CTAs to encourage users to convert.

We’ll also ensure your site provides a seamless user experience and we’ll build trust and credibility with social proof. Contact us today to find out how we can turn your site traffic into valuable conversions.

Implement continuous evaluation and adjustment

When prioritising your marketing budget, you must continuously evaluate performance and adjust your budget allocation accordingly. If you don’t, it can lead to misallocated funds, reduced relevance in your marketing activities, and missed opportunities for revenue growth. 

This means implementing regular performance reviews and feedback loops so that you have a constant supply of data on marketing effectiveness.

Here’s how this helps you prioritise your marketing budget:

• Feedback loops help you identify marketing initiatives that are failing to achieve your business goals. You can then reallocate funds to activities that are more successful.
• Regular performance reviews enable you to swiftly adjust your marketing budget to address market changes and emerging trends.
• Feedback loops also allow you to test out experimental marketing approaches. If they work, they can be scaled up, and if not, they can be quickly discontinued to reduce financial risk.
• Reviewing performance against your established KPIs ensures your marketing budget is allocated to support the most important business goals.

Invest in AI tech

One way CMOs are addressing the issue of reduced budgets is by investing in AI tech. Generative AI tools can help marketers increase and improve the productivity and efficiency of their marketing initiatives. This is often more cost-effective than relying on the manual completion of repetitive marketing tasks.

According to a HubSpot survey:

• 48% of B2B marketers use AI for research.
• 22% of B2B marketers use it for ideas and inspiration.
• 75% of B2B marketers say it helps them spend less time on manual tasks.

Of course, it’s unwise to become overly reliant on AI tools—especially when it comes to content creation. AI is still very limited in this respect and is prone to bias and plagiarism.

However, it can be highly valuable for tasks like:

• Identifying customer trends and preferences.
• Segmenting your audience.
• Creating datasets for training purposes.
• Monitoring marketing performance.
• Creating reports and dashboards.

Allocating some of your marketing budget to AI tool investment helps improve operational efficiency, make data-driven decisions, and optimise your marketing spend.

How much of my advertising budget should I allocate to social media?

The percentage of your advertising budget you allocate to your social media channel depends on your business, industry, and your specific goals.

However, it’s always a good idea to assess industry standards when allocating your budget. Although it applies to overall marketing budgets rather than advertising budgets specifically, Gartner’s CMO Spend survey found that:

• B2B businesses allocate 7.3% of their budget to marketing products on social media.
• B2B businesses allocate 8.9% of their budget to marketing services on social media.

What are the common mistakes CMOs make when pitching their budgets to CFOs?

Some of the most common mistakes CMOs make when pitching their budgets to CFOs include:

• Lack of data-driven justification.
• Failing to align their proposal with the overall business objectives.
• Overemphasis on long-term results while neglecting short-term financial gains.
• Poor communication of the value of marketing.
• Insufficient market research.
• Lack of negotiation and flexibility.

Final Thoughts

To secure your marketing budget, you must align your marketing goals with your overall business objectives, foster a collaborative relationship with CFOs, and demonstrate the value of your marketing efforts.

Then, you can prioritise your budget by identifying KPIs, focusing on high-impact channels, and continuously evaluating and adjusting.