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Clients: Tell Us What Your Budget Is!

  |  October 13, 2009   |  Comments

Without knowing what a prospect wants to spend, media planners and buyers can end up doing a ton of research and pitching ideas that the client cannot afford.

Why are some companies scared to disclose their budget to potential media buyers? What bad things could we do with that information? We will know eventually, right? Let me state here and now: It's okay to let media buyers know what your budget is! In fact, there are not many valuable things we can do without knowing that information. If it's a test, decide what you can risk on a test. Don't ask us what you should test if you cannot tell us what you can afford.

Consider this: What if you went to an architect with no specific idea of what you wanted and said, "Design me a house." What would the architect say? Most likely the architect would ask, "How much do you want to spend on your house?" You wouldn't say, "Well, do some research, draw me up some plans, give me some ideas first, and then tell me what I should spend." A serious builder knows what his budget is, has an idea of what he wants, and shares that with architects he deems worthy of interviewing and requesting detailed information from.

What inspired me to write about this issue? I recently participated in a pitch conference call with a prospect who wanted us to do media planning and buying but refused to reveal their budget. Of course we gave a presentation describing our full capabilities. The prospect said they were looking for a good partner and we seemed like a good fit but still didn't want to reveal their budget at this point in the process. Now that is fine, except when they wanted more details on what we would do and sought advice on what they should spend.

Now this is a very open-ended question that takes a lot of work to answer. Of course we want to please the prospect and get their business. But for most busy agencies, these situations create an uncomfortable and risky situation.

First, as an agency and business, you have no idea what kind of account you are trying to acquire. Is it a $1,000,000 budget or a $10,000 budget? You can end up doing a ton of research and pitching ideas that the client cannot afford. Under a good scenario, you will hit the nail on the head. Under a worst-case scenario, you will hand over a lot of research and information to a prospect who says, "thank you very much," and then you never hear from them again.

Second, how should I, as the guy pitching, know what a prospect should spend on a display advertising campaign? I mean c'mon, I am an agency. We generally want media budgets to be as high as possible so we have a lot to work with, right? When I'm pitching a client, I don't know how much they can afford or how much they can risk on a test -- that all depends on them. (Sure with search you can use the Google click estimator but with a consumer product and display -- the sky is the limit!)

In my experience, serious clients have a budget in mind and share it with potential media buyers on their short list. Serious clients don't ask for free information and they don't ask what they should spend. While serious clients may not reveal exact figures, they will give ranges to media planners so they can develop strategies, preliminary plans, and ROI (define) models. Then, we as planners can do our research on the best way to spend the money. We know how many sites we can go after and based on the budget, what type of value-added placements and volume discounts we can expect.

Finally, if we know the client's budget range, we can give advice on whether that amount is enough to do a test or be competitive in a certain space. But only after we can make the important decision on whether your budget is big enough to be a viable account for our agency. If it is, then it's fair to ask us to do that kind of research.

So let me finish off this article with some constructive bullet points for both clients and agencies.

Clients: Let potential agencies know what your budget is; include a budget range in your RFP. That way, you won't waste time with agencies that are either too big for your budget or too small for your budget. You will also get much better information from the agency when you ask for specific ideas, budget advice, and a preliminary approach.

Agencies: Be upfront with prospects and ask them to be honest and frank about their budget. Tell them you must know so you can ensure you are a good fit and so you can provide them with an accurate and meaningful proposal that makes good use of your time and their time.

This discussion is aimed at opening up a direct and honest dialogue during the pitch process that makes better use of everyone's time, allows media people to yield better plans, and helps clients make faster decisions.

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ABOUT THE AUTHOR

Harry Gold

As founder and CEO of Overdrive, Harry Gold is the architect and conductor behind the company's ROI-driven programs. His primary mission is to create innovative marketing programs based on real-world success and to ensure the marketing and technology practices that drive those successes are continually institutionalized into the culture and methods of the agency. What excites him is the knowledge that Overdrive's collaborative environment has created a company of online media, SEM, and online behavioral experts who drive success for the clients and companies they serve. Overdrive serves a diverse base of B2B and B2C clients that demand a high level of accountability and ROI from their online programs and campaigns.

Harry started his career in 1995 when he founded online marketing firm Interactive Promotions, serving such clients as Microsoft, "The Financial Times," the Hard Rock Cafe, and the City of Boston. Since then, he has been at the forefront of online branding and channel creation, developing successful Web and search engine-based marketing programs for various agencies and Fortune 500 companies.

Harry is a frequent lecturer on SEM and online media for The New England Direct Marketing Association; Ad Club; the University of Massachusetts, Boston; Harvard University; and Boston University.

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