Marketing Budget Template: How to Find More Money

Lessons from Managing $400M +

In marketing, we generally need more money to run more programs, more advertisements and make a bigger impact. But sometimes we’re not even spending all the money we’ve been allocated because of poor budget management. 

I love budgeting and budget processes. I like having money, spending money, knowing where the money is going, using up all the money we have been given, and being ready to use more. I also like having my budget in order so that if, heaven forbid, finance needs money back quickly, I know how to extract it while doing the least harm. 

“The Price Is Right” Budget Game

When I ran awareness advertising at Oracle, I managed my direct budget of $40 Million plus the rest of the advertising budget: $80 Million in total per year. My goal was to use as much as possible without going over significantly, ideally being within 3-5% of the total money allocated to us. In public companies, any money you don’t use in a quarter is lost - it doesn’t carry over to the following quarter. Any money you don’t use for the year is lost - it doesn’t carry over to the following year. At scale, budgets are often set by % increase over the previous year - so if you massively underspend what you were given, it might reduce your basis for growth or stability the following year. Thus, playing the “the price is right” game — how do I get as close as possible without going over — is a strategic advantage to maximizing your budget this year and next. (Many private companies alsodo not roll budget over between quarters or years.)

There are two major challenges you need to balance when trying to maximize your budget through planning:

1. There will be unexpected costs from programs (pet projects of the CEO, competitive or market surprises) that you didn’t plan in

2. Projects will slip in time, may come in under budget, or not get done at all.

Plan for the Unexpected With Holdbacks

Seasoned executives expect something unexpected to happen every year. Instead of begging the CFO for more money, or scrambling to cut an existing program, it often makes sense to set aside a small portion of your budget for unexpected surprises. PRO TIP - DO NOT CALL THIS A “SLUSH FUND” - IT WILL DRAW ATTENTION OF FINANCE, AND YOU COULD LOSE IT. I like to allocate extra budget to a program in a critical area of the business, like demand generation, that looks fully legitimate to investigators - but I let the leader in that team know the budget line item is provisional and could be moved as needed. But! It’s also important to remember you put it there and use it up if an emergency didn’t claim it.

If your team is big enough, consider having a headcount holdback for important strategic priorities as well. Again, I don’t tell the finance team that this is an ‘extra’ - I often allocate it to a real need on our priority list that's legitimate. Leaders can get frustrated if they think they are getting more headcount that later gets taken away. So I make it clear to the leader where I’ve “stashed” the extra headcount that it is not “theirs” - we will decide later in the year where we need it most. Sometimes this holdback helps us shore up a critical program or launch a new program. At times I have used this headcount to “buy” more support from partner teams — giving the UX team one of my headcount to help with growth, giving analytics an extra headcount to drive marketing support. If you allocate 100% of your budget and headcount, it is difficult to respond to the changing needs of the business throughout the year.

Run Over-Budget Early, Closer Later

When I oversaw the $80M Oracle budget, I let people initially plan at 10% over budget for the year, knowing many programs would be delayed, changed, or that people would under-spend their buffered estimates. (This is especially difficult as team size increases and buffers get layered on buffers.) As the quarter drew on or the year drew on, I’d bring down our margin to be 5% over budget or 3% over budget. I’d look regularly and actuals and plans to see how close we could get. There’s an art and science to balancing holdback and over-spending to get as close as possible to your budget. I found a lot of fun in the game.

Have A Strong Budget Tracker And Team Budget Hygiene

It goes without saying that the most important part of using all these budget tips is to have an effective tracking system. You’d be surprised by how many early and mid-stage startups lack effective budgets. Or how many later-stage marketing teams rely only on finance instead of actively grooming their own budget and actuals.

Your budget template needs a fantastic summary page that can quickly show top executives your plan, your actuals, your forecast, and your year-over-year growth. I like to have detailed tabs in the same workbook for each sub-team that follow the same pattern but have line items on each specific spend. I have each leader take ownership of their budget, actuals, and forecast and link their sub-page total to the departmental summary - so as they update their budget, my overview is up-to-date as well.. At Atlassian, we’d review our marketing budget in our leadership team meeting monthly to see where we were over and under to make sure we used every dollar we were allowed.

I’ve assembled a quick template that shows these categories here:

Budget Template

35.4KB ∙ XLSX file

Download

Download

Plan a “Grab Bag” for Good Surprises

In public companies, sometimes the holdouts for the company pop up at the end of the fiscal year for marketing to use - one year at Oracle, I received $5M that had to be entirely spent in the last 6 weeks of the fiscal year with no value being delivered after that end date (I couldn’t pre-pay advertising for the next year for accounting reasons). The company had its own holdback for strategic initiatives, acquisitions, etc, that weren’t used but needed to spend it in that fiscal year to manage earnings ratios and year-over-year comparisons. The first time something like this surprised our department, we weren’t able to spend it as strategically as we would have liked.

The answer - we kept a set of “quick action” high-impact programs that we had on the ready. We called it the “grab bag.” It’s extra work to have a fleshed-out high-impact wish list, but it can be helpful for the end of the year, or a CEO’s request for “what’s something big we could do to… announce this product… juice the pipeline this quarter… get more press…” Just because you don’t have the budget yet doesn’t mean you shouldn’t sketch out some add-on spend ideas - it will also help you get ready for the next budget cycle. 

Make Friends with Finance

I learned early that friends in finance could be a strategic advantage to my department. For starters, they could help us troubleshoot our budget and actuals to make sure we were finding and using every dollar (sometimes actuals get misclassified, sometimes headcount in your department is actually tagged to a different team for some reason, etc.) But more than that, I found that my finance partners could give me insights about the business - the financial stress we were under, or the heads up on unexpected good things I should consider. They could help defend my budget and budget priorities to the CFO, and help me plan better for the next fiscal year.

Prove the Return

CFOs are cautious of marketing because sometimes we seem like a cost center more than a revenue engine. The CFO’s goal in life is to figure out where to invest money to get the greatest return - will the company make more money if they invest more in engineering and the product? Or more in outbound enterprise sellers? Or more in marketing? So, to the best of our ability, we need to pro-actively report on the IMPACT of the budget categories - blended marketing cost of acquisition, campaign-specific pipeline, and revenue.  The purpose of spending all of the allocated budget is to maximize the return for the business. If you can prove how much additional revenue you can bring in an additional dollar spent in marketing, there is a potentially unlimited budget available. (Pandora’s box here for another post)

So, enjoy the game, or find someone great on your team who can rock it for you.

What are your best budget corporate budgeting hacks ?