In an ever-evolving market, marketing teams should be able to try, test and learn. Allocating money for this purpose may be difficult since it’s less certain but it can bring you the strongest outcomes.
Using a zero-based budgeting framework lets you focus on accounting for projected costs and performance outcomes for new initiatives where there isn’t past data to reference. It also helps assess reallocating budget for new initiatives or campaigns that come up after the budget has been confirmed.
Anything new brings risk, so you’ll need to justify each expense for its potential ROI and compare that to the ROI of existing campaigns. Thus, it allows business leaders to revisit, remeasure and reevaluate their marketing strategy. Then, leaders can decide if it’s worth pursuing or to stick with what they know works.
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According to The Sprout Social Index™ 2023, 38% of consumers agree that the most memorable brands on social prioritize original content over following trending topics. And 26% agree that memorable brands take risks with their social content. This demonstrates the dynamic nature of the marketing landscape, where innovation and bold approaches are valued by customers.
Take a look at past results
The phrase “Yesterday’s lessons, tomorrow’s innovations” holds true when setting marketing budgets during a recession. It’s all about knowing what’s working, and focusing in on activities and core channels that are delivering.
See where your dollars had the most impact in the previous year—the campaigns that brought the biggest return on ad spend (ROAS), conversion rates or lead sources. For example, if you got X number of leads from influencer marketing in the previous year, you can propose an X+10% increase in budget for the same activity this year.
Create internal benchmarks by platform and across all media channels to identify areas of investment that are not worth continuing. If you didn’t have metrics in place last year, now is the perfect time to implement them based on your company’s overall goals.
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