Article

Marketing efficiency

How to free up 20-30 per cent of your marketing budget
Published

2 September 2024

Think of your marketing budget as a portfolio. You have countless options – countries, channels, products, customer segments. To win, you need to think like a CFO. Staying on top of the numbers is not optional; it is mandatory. Marketing has evolved into a discipline where being as data-driven and financially savvy as the finance team is no longer a nice-to-have – it is a must.


Gone are the days when marketing was all about creative storytelling and flashy ad campaigns. Today, it is about results – measurable, data-driven results that contribute directly to the bottom line.


What is marketing efficiency?

Marketing efficiency is about understanding the impact of every dollar spent. It is about doubling down on what works and cutting the fat from what does not for both working and non-working capital. When focusing on efficiency, you are not just making marketing more effective – you are aligning it with the broader business strategy.


With this in mind, you should be able to answer two key questions:

  1. What are we spending our money on (working and non-working capital), and how does it contribute to growth?
  2. How do we create the optimal marketing operating model to support our business strategy and enable efficiency and quality improvement?

Embracing marketing efficiency means embracing accountability. It means revisiting your agency set-up and how you operate across brands, functions and markets. If you can demonstrate that your marketing initiatives are efficient and driving growth, you will not only defend your budget – you are likely to increase it.


How to get started: a call to action for CMOs (and CFOs)

Across industries, we have seen that tightening up on efficiency can free up 20 to 30 per cent of your budget. This is money you can directly funnel into growth or boosting your bottom line.


We have identified several cases where there is an inflated media spend on channels, product verticals or departments without a review of actual performance. This leads to missed opportunities and a suboptimal marketing model that often remains hidden in daily operations. This issue is often driven both internally and externally:

  • Internally, it often comes from the marketing or sales team demanding spend or attention on certain business units simply because the business unit exists – a prime example of the boiling frog syndrome, where we fail to recognise the gradual waste in our marketing spend as we become accustomed to it.
  • Externally, this pressure generally comes from the media agency demanding specific spending levels to “guarantee” performance or from sponsors allocating disproportionate budgets to certain areas, forcing marketing teams to comply. These pitfalls and assumptions make it increasingly difficult for CMOs to justify budgets and propose improvements.

And here is the kicker: these issues are often caused by guesswork and overreliance on questionable statistical models.


It is time to adopt a new blueprint.


The marketing efficiency blueprint

And so, in today’s landscape, marketing efficiency is critical. Thinking like a CFO allows you to potentially free up 20-30 per cent of your marketing budget, which can be turned into growth fuel or improved margins.


The path is clear: diagnose to identify savings opportunities, set clear and measurable targets in terms that the CFO cannot dispute, craft a road map of initiatives and execute on it.


The result? A marketing organisation that is not just about creative storytelling and flashy ad campaigns but also accountable, efficient and a true driver of business impact.

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