You've got your budget, but what's the spend in marketing- related areas of your organization?
By now, you have probably received your 2006 marketing budget and are planning how to spend it. For many marketers, it may not be as much as hoped. Let me tell you a secret: your marketing spend is in actuality a lot greater than that number you received from finance, particularly if you're only responsible for the online marketing.
The trend is steady. Online marketing budgets are rising at a healthy rate. But marketers must understand online marketing's total cost as well as its role in the marketing mix. Costs for many online marketing functions, such as Web site development and server and site management, may not flow into a marketing budget.
Strategically oriented online marketers can extend their influence by understanding where marketing touches various parts of the organization, quantifying these touch points, and incorporating them into their overall marketing strategy. From an ROI (define) perspective, it's important to grasp the full impact of your true marketing spend across the company.
Determine Your True Marketing Spend
Traditional marketing spend totals provide a relatively accurate match against their assigned budget. In online marketing other company areas may house costly marketing-related items. Before considering how to spend your 2006 budget, determine the breadth of your influence. Though some items may not involve a real marketing cost, they contribute to your organization's ability to get the best marketing bang for its buck.
Your true marketing spend includes all the following factors. Though you may not be able to claim full control of these budgets, you must ascribe either all or a portion of these costs when calculating a fully loaded campaign ROI. You must also consider this broader perspective when developing a marketing strategy and related tactics.
A list of online marketing's most common hidden costs:
When you're calculating your true spend, consider the staff dedicated to these functions and include fully loaded cost for each full-time equivalent (FTE).
Consider Your Marketing Strategy
Now that you've determined your true budget, consider your overall marketing strategy. If your online marketing budget only covers a small portion of the overall spend, you may not be able to set priorities independently. Be part of the process to the greatest extent possible. Regardless of your percentage of the corporate marketing spend, online affects offline marketing, and offline affects online marketing.
Considering this interaction before developing campaigns enables you to take advantage of any synergies as well as plan for them cost-effectively. If you intend to post your firm's TV ads online, for example, parts can be filmed that adapt well to online viewing and make your TV ad more interactive for little or no cost.
Your goal is to use online tools to cost-effectively acquire and retain customers while increasing profitable revenues for your firm. Understanding and managing the full breadth of your online marketing expense base enables you to strategize while leveraging all relevant areas of your organization.
Step back and understand what you're doing from the broader corporate perspective. You can't maximize your contribution to corporate ROI if you don't take your true spend into account.
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Heidi Cohen is the President of Riverside Marketing Strategies, an interactive marketing consultancy. She has over 20 years' experience helping clients increase profitability by developing innovative marketing programs to acquire and retain customers based on solid analytics. Clients include New York Times Digital, AccuWeather.com, CheapTickets, and the UJA. Additionally, Riverside Marketing Strategies has worked with numerous other online content/media companies and e-tailers.
Prior to starting Riverside Marketing Strategies, Heidi held a number of senior-level marketing positions at The Economist, the Bookspan/Doubleday Direct division of Bertelsmann, and Citibank.
Heidi is also a popular speaker on current industry topics.
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