It’s that time of year. Planning for the next year is likely well underway at your organization. Figuring out your budget can be one of the more daunting tasks when looking to a new year—but it’s also one of the most important. Establishing your marketing budget for the next year opens doors to other decisions about how to best leverage and optimize your investments.
So, as you begin planning for Q1, we pulled some insights from our State of Data and Technology report to help. Here are a few questions to ask yourself when budget planning:
1. Are you getting the ROI you need from your martech stack and current marketing investments?
Is there anywhere you’re investing that isn’t producing the results you expected? Take time to evaluate your investments from last year to see what isn’t performing.
Ask yourself about your martech stack—is it too complex? Our recent study found that many marketers have overly complex martech stacks. In fact, 19% said their current technology stack is more complex than a black hole. If you’re finding your martech hard to work with, the issue may be that it’s just too complicated and your 2023 plan should address that.
Over 90% of the marketers we surveyed agreed to some degree that replacing, updating or consolidating tools in their current technology stack would make it function more efficiently. Nearly 85% of those surveyed expect increased investment in marketing and sales technology in the coming year. Your martech should help you reach your goals—not create more challenges.
So, assess your current investment. If you aren't getting the ROI you expected, see what changes can be made to your budget to optimize your stack.
2. How will you address challenges?
Think about any challenges you faced with your campaigns this year. Did you address them quickly and effectively? Or did they leave your team scrambling to figure out how you can pivot and take the necessary steps to fix the issue? How you answer probably has a lot to do with how you planned for potential challenges ahead of time.
Having a plan to allocate budget to address challenges next year could be key to making sure you can efficiently address issues when they inevitably pop up. In fact, when we compared the responses from our recent survey, we found that high-growth companies are more likely to do this than their peers. 88% of high-growth companies reported they have budgeted plans to address challenges in the year ahead. Read our blog for more insights into what high-growth companies are doing differently.
You can start by looking at some of the challenges you faced this year and how you solved them. Evaluate how much budget you needed, or if you could’ve addressed the problem more effectively if you had an additional budget allocated. Once you’ve looked at previous challenges, you can consider other potential pain points you may be able to better navigate if you allocate budget ahead of time.
3. How is your data performing?
Your data is the fuel that should power all your marketing efforts. The quality of your data can make or break your campaigns. Is your data driving the results you’re looking for? If it isn’t, take time to do a deeper analysis of your data to see how your budget can better support it. You may need to invest in different tools or sources to make sure you have high-quality data.
Something to consider when evaluating your data—companies that are performing better report having normalized data. Organizations that saw a 20%+ increase in revenue last year reported their data was extremely normalized at a rate 2x more than the full data set. When looking at your tools, consider how normalized your data is and if there are tools you can add to help.
Investing in your data can be essential to making sure you reach the right audience and hit your KPIs. So, make sure your marketing budget for 2023 supports enhancing or expanding your data.
Next steps
When planning for next year, take these questions to the table to discuss with your team. These questions can help you better evaluate your current budget and make data-driven decisions around next year’s budget.
You can learn more about how other marketers approach their budget in Breaking Down the Data: Revenue and Budgets.
