"Tell me the value you'll deliver and we'll find the budget you need...." This is a common reply to the budget question when speaking with prospects. All too often, prospective clients are unwilling or unable to provide a budget for the communication services they come shopping for. It's a weird and frustrating situation for a commercial transaction that has a price attached to it.
Imagine going into a car showroom and saying to the salesperson "I want a car that does this, this and this. Oh, and I want it to have these features, be in this colour and to be 100% reliable." The Salesperson would very quickly lose interest when you refused to give them a price you were willing to pay.
This analogy is not as tenuous as you may think. At least when you go shopping for a car, you know how that car is going to perform. You know what return on investment you are going to get measured in terms of speed, acceleration, fuel economy, reliability, in-car entertainment etc. In other words, you get what you pay for if you define the 'value' you are looking to get from the purchase at the point of sale.
Which brings me onto the Neilson 2018 CMO Report. This interesting study of 195 director level respondents covers a host of topics but the headline that caught my attention was the statement that marketers are "struggling with tools, technology, data, analytics to measure ROI, effectiveness, and attribution as they now have responsibility to report marketing ROI and delivered value to the C-suite."
It got me thinking that marketers and communication departments in particular, need to have the same confidence in the product they are buying in terms of value that they would when buying that car. Perhaps the reason that budgets are often not provided is because agencies cannot show that value and because comms owners struggle, like their marketing colleagues to measure RoI, effectiveness and attribution.
It's a chicken and egg situation. Agencies need to continue to get smarter in their ability to prove attribution and to build on all the progress that's been made to focus comms around business outcomes. And as Brett House, VP of product marketing and strategy at Neilson says: "Take control of your data, get it integrated and in one place, and create a workflow that enables multiple departments to plug into the single data source. This will help break down silos and align goals."
This advice is leveled at the CMO but it is equally relevant at a communications departmental level. By working better together, agencies and clients can define the value and the RoI from campaigns. It just takes a shared agenda. And that starts with providing a budget for the type of campaign that you are 'shopping' for.
we saw that 25% of respondents said they were not comfortable calculating ROI across their digital and traditional media mix. You also have different departments wanting to claim credit for achieving specific ROI. We did hear that 79% of marketers are planning to invest more in analytics and attribution tools over the next year because they know they need to work their way through these issues.