{"id":14915,"date":"2016-02-01T11:00:37","date_gmt":"2016-02-01T11:00:37","guid":{"rendered":"http:\/\/www.smartinsights.com\/?p=14915"},"modified":"2016-02-01T06:48:41","modified_gmt":"2016-02-01T06:48:41","slug":"case-investment-in-digital-marketing","status":"publish","type":"post","link":"https:\/\/www.smartinsights.com\/managing-digital-marketing\/planning-budgeting\/case-investment-in-digital-marketing\/","title":{"rendered":"How to make the business case for investment in digital marketing"},"content":{"rendered":"

Convincing \"the boss\" of the need for bigger digital marketing budgets<\/h2>\n

\"\"<\/a>Those of us who would describe ourselves as \u2018digital specialists\u2019 have a vested interest in evangelizing digital; we love it, we believe in it and we want to do more. However, working in real-world organisations, we need to make the business case to convince those who control the budgets that we require to implement our digital plans.<\/p>\n

In this post I'll give some ideas on making the business case to the company owner, finance or marketing managers. Of course, every boss has a different personality. What works for you?<\/p>\n

Otherwise change won\u2019t be fast enough and the effectiveness of our marketing activity is likely to decline as consumers or business customers switch to new platforms; we risk \u201cmissing the boat\u201d.<\/p>\n

The reality is that \u201cThe Digital Revolution<\/em>\u201d has not resulted in whole new marketing budgets being created. No-one is saying: \u201cOffline is working fine. But now we have social media and mobile too so we\u2019ll just double the marketing budget.\u201d Far from it! \u00a0So we are, in reality, talking about substitution or reallocation of budget for digital. Often, what we are proposing is to shift money out of press advertising and direct mail (say) into PPC and Social Media (say). We need to propose and then someone needs to say \u2018Yes OK\u2019 to this shift. But why should they?<\/p>\n

\n
\n \n Marketing budget spreadsheet template\n <\/a>\n <\/div>\n
\n

Download Expert Member resource \u2013 Marketing budget spreadsheet template<\/strong><\/p>\n

This Smart Insights budgeting spreadsheet template has been created to provide a comprehensive checklist of modern marketing activities you need to budget for including managing digital experiences (mobile and web), content marketing and traditional offline channels.<\/p>\n

Access the Marketing budget spreadsheet template<\/a><\/p>\n <\/div>\n <\/div><\/p>\n

From a commercial viewpoint, there are really only 2 reasons for organisations to spend money on digital marketing:<\/p>\n

1.\u00a0It delivers immediate ROI (or at least within a measurable time frame)<\/p>\n

or<\/p>\n

2. It\u2019s becoming increasingly important, so it will, in time, deliver that ROI, which means that brand owners need to get involved now and \u2018learn how to do it\u2019 or they\u2019ll be left behind when it really takes off.<\/p>\n

So we need to speak the language of ROI, of investment linked to return, in order to sell our digital plans in. Perhaps the best analogy is that of \u2018paid advocates\u2019 i.e. we must adopt the role of a lawyer \u2018making the case\u2019 for digital. And of course, if the balance of evidence is not in digital\u2019s favour, the case will be lost and the budget will be locked away i.e. not released.<\/p>\n

\"\"
\nRecommended Guide<\/strong>: Making the business case<\/p>\n
<\/div>\n

In this guide we explain eight proven techniques to help you convince colleagues of the need for more investment in digital.<\/p>\n

<\/div>\n

Download our Making the business case for digital guide<\/a>.<\/p>\n<\/div>\n

<\/div>\n

Convincing finance managers of the value of investment in digital marketing<\/h3>\n

Senior Finance people are, in the main, only interested in ROI; they play no favourites, and neither should we in making recommendations to them. As Commercial Accountants, they have the avoidance of waste \u201chard-coded into their DNA\u201d. They won\u2019t want to do something just because it\u2019s the latest craze or looks \u2018really cool\u2019. Quite the opposite in fact: the newest, most fashionable platforms will need to work extra hard and make an even BETTER case to convince them!<\/p>\n

So, where to start? You\u2019re the Marketing Director\/ CMO\/ Head Of Marketing and you want to convince the \u2018Bean-Counters\u2019 to invest in Digital Marketing. The challenge here is as much a matter of understanding their mind-set as much as knowing Digital and the role it can play.<\/p>\n

If you are in a not-for-profit or governmental organisation, the terminology will be different but the underlying principle still applies: The (senior) finance guys are responsible for increasing the net income (= sales less costs). Thus they need to focus the attention of everyone in the organisation on 2 things: maximizing revenue and minimizing costs. The CEO looks to the CFO to help and support him\/ her in this vital activity. And it\u2019s no coincidence that many CFOs get promoted to MD\/ CEO and even Chairman.<\/p>\n

Marketing, as a \u2018spending\u2019 department, will always be under scrutiny. Finance Directors have never been entirely comfortable with \u2018expensive\u2019 ad campaigns, on TV, Press, Outdoor, Direct Mail Etc. Part of the reason for this is the fact that they hate the rather mysteriously loose correlation between ad spend and resultant sales. As people with tidy, mathematical brains, they find it troubling that the CMO cannot promise, hand on heart, that \u201cif we spend this, we will make that\u201d.<\/p>\n

Finance Directors in companies who spend on marketing will in general, be familiar with advertising in offline media and will, in most cases, have arrived at a kind of \u2018grudging acceptance\u2019 that it is a necessary evil (i.e. if you stop it your sales will go down), whilst still suspecting external agencies and other partners of secret mark-ups and rip-offs and often introducing procurement experts (internal or external) to audit these \u2018suppliers\u2019 and look for \u2018value\u2019 (aka cost savings).<\/p>\n

Explaining the principles of media attribution models<\/a> and the move away from last click wins models can really help we find \u2013 finance guys like this analytical approach. It can also help you explain the value of media which are traditionally more effective in brand building and demand generation rather than direct response.<\/p>\n

For investments in systems such as CRM or email marketing systems that are aimed at increasing existing customer loyalty, then customer lifetime value models<\/a> are the best approach.<\/p>\n

So, if you\u2019re using Google Analytics, use the Multichannel funnels<\/a> to show how social media marketing or display advertising contributes \u201cassists\u201d sale earlier in the path to purchase.<\/p>\n

The challenge is to convince the powers-that-be that this new activity will be well managed, tightly controlled (especially budget-wise) and ultimately that it will deliver BETTER ROI than other platforms\/media. So no pressure then\u2026<\/p>\n

Convincing marketing managers of the value of investment in digital marketing<\/h3>\n

Here your approach will partly depend on the attitude of the main marketing person to Digital. Are they an experienced marketer with little or no exposure to Digital? Or someone who is, on the whole, a believer in digital with reasonable exposure to it (e.g. in their previous career) but who needs ammunition to sell digital internally? The former group is more of a challenge, but you can work with either.<\/p>\n

Even today, there is still a group of senior marketers (often the MOST senior) who have largely managed to avoid digital for their entire long, successful careers. Their comfort zone is entirely offline: TV, Press, Outdoor, Collateral, Direct Mail, Exhibitions, PR, Design, you name it. Think back to 1990 (if you\u2019re old enough!). These people were comfortable (and on top of their game) in those days; maybe they\u2019re in denial about the changes since.<\/p>\n

It\u2019s not that they\u2019re hostile to Digital, more likely they\u2019re a little scared of it. Sure, their kids are on Facebook and they have a smartphone (in common with their senior colleagues) but they\u2019re suspicious of those \u201cApps\u201d they read about in the Marketing Press and which the Agency\u2019s spiky-haired Head Of Digital (who looks about 16) keeps banging on about.<\/p>\n

Moreover they\u2019re likely to be sensitive about revealing the depth of their ignorance about digital, especially in front of their junior (web-savvy) colleagues.<\/p>\n

They are, however, probably not stupid. They can be taught; and this is the key. With this group you need to reassure and (ever-so-subtly) educate them as to the benefits of digital as part of their marketing mix. Maybe organizing a program of in-company training for the non-digital specialists in the organisation might help? And \u2018you-know-who\u2019 could be invited to sit in? This is Stage 1; demystification and reassurance using plain-talking explanation.<\/p>\n

However, if your marketing manager is already fairly digitally savvy and indeed digital-friendly, but just needs some hard-hitting ammo for the Board, business owner or the Chief Financial Officer, then your task is easier. You don\u2019t need to preach \u201cThe Internet Revolution\u201d playing dramatic videos about \u2018The Connected Planet\u2019 and proclaiming apocalyptically that \u2018The World Is Changing\u2019; rather you must simply supply some ROI projections that convince all parties. At this point, we can move seamlessly to the strategy outlined in a) above (convincing the Finance Guys). Just give this case to the CMO and wish him\/ her every success in his\/her meeting with the CFO!<\/p>\n

Lastly you may need some external help. So you should either pay a consultant (who are often surprisingly persuasive in front of the Board even when merely delivering a script written by you) or tap into a reliable source of free assistance: in my experience, Digital agencies are always very keen to help clients free up budgets to spend on digital activity (Funny that!). If they have Account Planners with a business brain, as an increasing number do, they may be your best allies in putting a robust case together. Digital Media planners can also be very helpful in helping you build your case for similar reasons.<\/p>\n

Which techniques have you found successful in making the business case?<\/p>\n","protected":false},"excerpt":{"rendered":"

Convincing “the boss” of the need for bigger digital marketing budgets Those of us who would describe ourselves as \u2018digital specialists\u2019 have a vested interest in evangelizing digital; we love it, we believe in it and we want to do …..<\/p>\n","protected":false},"author":11361,"featured_media":14916,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_glsr_average":0,"_glsr_ranking":0,"_glsr_reviews":0,"footnotes":""},"categories":[346],"tags":[],"class_list":["post-14915","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-planning-budgeting","srace-plan","primer_bundle-new-primer-bundle-4"],"acf":[],"yoast_head":"\nHow to make the business case for investment in digital marketing | Smart Insights<\/title>\n<meta name=\"description\" content=\"How to make the business case for investment in digital marketing Convincing "the boss" of the need for bigger digital 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