According to a Gartner report, digital marketing budgets now average about 2.5 percent of revenues and are growing 9 percent this year, but as the report concludes, "Increased funding is a double-edged sword. It brings new opportunities but puts more pressure on marketers to deliver and prove a return on the investments." It's probably fair to say most companies still see marketing as a cost center, a necessary evil that needs to be justified in order to survive the line item veto. That's unfortunate, because marketing can do much more than justify itself through ROI analysis. It can become a profit center.
The role of marketing and the funding it receives need to be defined and planned in order to deliver profitability. There are many moving parts, including:
We talk a lot about sales and marketing alignment, but really all four of these business segments need to be aligned and measured on a continuous basis in order to achieve primary business goals. If each of these segments is achieving internal goals and working together to achieve company-wide goals, there is a very real possibility your company can become profitable and stay that way despite market fluctuations and unforeseen competitive factors.
Well, you could ask the executives from each division to come up with their own plans and then sit down with them and try to mash them into a whole. That's basically how the U.S. Government works, and you know how well that approach has been doing lately... Instead, why not start from a blank slate? Get your leaders and key stakeholders in a room for a kaizen-style conference and ask them to check their egos and agendas at the door. Start with the Business Goals and identify the outcomes you are looking for over the next several quarters and years. Now each leader suggests ways their business unit can contribute to meeting or exceeding those outcomes, the benchmarks they will use and challenges that need to be overcome. The leadership team then needs to develop a working plan and budget for executing it. This won't work if your company is siloed and each leader is primarily motivated to protect and aggrandize his/her own empire. If that's the case, you need to rethink the whole enchilada.
Digital marketing has some unique characteristics that can be exploited to drive profitability.
In my next post, I will start to break down some of the primary contributions, or Assets, by digital marketing to the bottom line. We'll look at strategies, tasks, technologies and examples for meeting specific goals and KPIs and ultimately, making your company more profitable.
Photo credit: pheezy
With over 30 years of business and marketing experience, John loves to blog about ideas and trends that challenge inbound marketers and sales and marketing executives. John has a unique way of blending truth with sarcasm and passion with wit. Connect with John via Twitter, LinkedIn or Google Plus.