Over the past few days, I’ve come across a number of articles in our local business press. Much of the content is focused on two issues. One, the rise and importance of digital within an organization’s marketing budget spend. Two, how to find less costly ways to spend on marketing efforts. With complete bias, I agree with the first point, and support the efforts for all brand marketers to see what is happening around them as it relates to the increased importance of digital in the marketing (and for that matter, operations and HR) mix.
What bothers me is the second matter at hand. How to find a way to spend less on such an important aspect of a client’s business. Since when did it become a smart decision to spend less when either (a) trying to attract new customers, or (b) retain the valuable ones you have? Fundamentally, if you want your business to grow (let alone survive), spending less in this area is counter-intuitive.
You’ve heard before (mostly from agencies always seeking larger budgets to work with from a client), think of the marketing budget as an “investment”, not a “spend/cost”. It may be trite to argue the semantics here, but underneath this statement, is indeed a rock solid truth.
Less is always less.
Allow me if you will, to argue this point from a digital spend perspective. Marketers on average allocate about 25-30% of their overall marketing budget into digital. From my records, this percentage allocation has not changed in the last 8-10 years. Yet, the digital landscape has exponentially changed. Your website is not just brochure-ware anymore, consumers are much more adept to technology changes well ahead of marketers' ability to keep pace with the new behaviors. Why then, are marketers not keeping the digital spend in pace with their customer requirements? Not to mention, since we can better track the “investment” and optimize in real-time, why limit your success here?
Pay Peanuts. Get Monkeys.
OK, perhaps an extreme exaggeration. But the point I’d like you to consider, is that when a marketer is looking for a deal, or just simply to spend less, the agency they’ve hired has to also make business decisions in line with client budgets. More specifically, the less money we have for projects, either (a) the less time we have to follow all the appropriate and disciplined process markers, (b) the less ability (once again, time) we have to dedicate toward true innovation ideation, and (c) the less chance we have to hire and retain the top talent to do the work. In any or all of these cases, theoretically, the end result is a sacrifice toward a quality output. And in that, less of an effective solution to solve a client’s problems or to truly maximize business growth and foster deep customer engagement opportunities.
Leadership Is Not A Commodity.
As a (digital) agent of our clients, we’re in the service business. The value we offer is not just in the production of our outputs, but increasingly the strategic leadership and guidance to make impactful business decisions with, and for our clients (from a digital perspective). We cannot afford to have seasoned and experienced thought leaders on staff, let alone sit across the boardroom table with our clients in planning sessions without the appropriate project budgets (and thus agency revenues) that bring these people to the table. I assure you, aiming for the best people you can afford will always result in a better outcome across the board. And will certainly cost you more in the end not to invest appropriately in the beginning.
To end on a somewhat light note, I find it interesting how we evaluate what we’re willing to spend our money on outside the corporate boardroom. When I’m personally looking for a lawyer, a dentist/doctor or any other professional service based individual or organization, choosing the cheapest option very rarely ends up providing a satisfactory result. Funny how that seemingly changes once we enter back in the boardroom.
In any event, I humbly request, that when reading future business publication articles about the cheap and fast, or down and dirty marketing activities at your disposable, you are reminded of this post. And stop to think, is it really worth the true "cost"?