By Marie Gulin-Merle
For today’s businesses, getting ahead isn’t just about planning ahead. It takes both planning and pivoting to drive short-term results and long-term business growth. The pressures and uncertainties of the global economy make it increasingly important for marketers to balance their early planning with the need to stay agile.
To get the most return on investment (ROI), marketing and finance teams need to partner closely to build flexibility into how they manage their resources and budgets. This will enable them to shift investments wherever the biggest opportunities present themselves.
Leading marketers are budget-agile
To explore agility in digital marketing specifically, Google recently partnered with Kantar to survey more than 2,400 global marketers and understand their approaches to planning, allocating, and optimizing digital budgets. Nearly a quarter of the marketers surveyed are considered “budget-agile”—meaning they adjust budgets across digital channels on a weekly or more frequent basis. The budget-agile marketers also report better marketing performance than others; 48% of budget-agile marketers say their marketing performance exceeded internal expectations and key performance indicators (KPIs), compared to 33% of marketers who are not budget-agile.
Budget agility does not mean “unprepared”; 31% of budget-agile marketers engage in formal marketing planning to align strategy and digital media budget allocations every month, versus 18% of non-agile marketers.
Agility empowers marketers to stay flexible with their plans and reallocate budget to areas of high potential to improve ROI; 31% of budget-agile marketers say it’s “very easy” to get additional budget to start tests that weren’t included in the initial media budget, compared to 9% of non-agile marketers.
Having the flexibility to engage in planning while leaving room for new improvements and growth opportunities can yield better business outcomes. Budget-agile marketers are 25% more likely than non-agile marketers to report their performance as stronger than industry competitors.
Most marketers overestimate their budget agility
Many of the marketers consider themselves more budget-agile than they actually are, based on their budgeting behaviors. On average, 60% of marketers who say they are “extremely agile” only make budget adjustments across digital channels monthly or less frequently.
This gap in perceived budget agility and actual budgeting behaviors exists up and down the organization ladder, but it’s especially wide in the C-suite. C-level executives are two times more likely than individual contributors to perceive their business as extremely budget-agile.
Across the board, there’s room for improvement on making fluid budget adjustments and optimizations. Teams often lack the ability to make flexible adjustments to allocate spend where the highest-ROI opportunities exist. Only 17% of budget-agile marketers and 6% of non-agile marketers have channels with uncapped or unlimited budgets that make it easy to increase budgets for new opportunities. And even marketers that are considered budget-agile face time-consuming approvals to pass budget changes. For 59% of budget-agile marketers, digital budget changes of 20% or more take a week or longer for approval.
Four enablers of budget agility
For organizations struggling with budget agility, the good news is that it doesn’t require dramatic changes to make meaningful progress.
The Google/Kantar research uncovered four behaviors that organizations employ to improve budget agility:
- Breaking down organizational silos: 58% of marketers have created more cross-channel team touchpoints such as meetings, training, and information-sharing to improve collaboration. Budget-agile organizations are also more likely to prioritize cross-channel collaboration and develop integrated marketing teams. Budget-agile marketers are twice as likely to call their marketing across channels “very tightly integrated” compared to marketers who are not budget-agile.
- Adopting cross-channel automation: Budget-agile marketers are 29% more likely than non-agile marketers to use automation to optimize performance across different digital channels in real time to drive better ROI. Global streaming service discovery+ moved from managing siloed campaigns for its digital media buys to one holistic optimization with Performance Max, a goal-based campaign that optimizes performance across all of Google’s advertising channels and inventory.
- Implementing consistent measurement: Sharing goals and measurement across marketing channels and teams can help improve the cross-team collaboration that supports budget agility; 41% of marketers surveyed have instituted shared metrics and KPIs across channels to improve collaboration.
- Leaning on agency partners: Agencies can help encourage fluid mindsets for budgeting and breaking down silos within organizations; 42% of budget-agile marketers say their agency partners greatly influence adjustments they make after initial budget planning compared to 31% of non-agile marketers.
What budget agility means for you
In this challenging business climate, it’s critical to invest in strategies that deliver ROI. Don’t let budget plans keep you stuck in outdated strategies. Plan ahead—but be ready to pivot fast.
Budget-agile marketers can reallocate based on what’s working well, invest in new opportunities, and optimize their organizational design for better business results. For marketers that aren’t as budget-agile as they need to be, there’s opportunity to improve with simple actions, like increasing cross-team collaboration and investing in automation to improve budget management and optimization in real time.
Becoming a more agile organization can help you move faster, pivot to capture more performance opportunities, and drive more business growth.
Source: Google/Kantar Budget Agility and Channel Desiloing Research, U.S., CA, AU, BR, DE, IN, JP, U.K., Advertiser: Agile n=416, Not Agile n=1,677, Desiloed n=514, Siloed n=1,579, March 2022–June 2022.
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Marie Gulin-Merle is Google’s Vice President of Global Ads Marketing and works on building and executing a global Marketing strategy for Google’s Ads business and advertising products.