As the fiscal year approaches, the CFO and finance team finalize the company’s financial plan. Now, it’s time to reconcile the final marketing budget with campaign plans and departmental needs. To ensure the most impactful programs remain funded, campaign owners should use zero-based budgeting practices to mark the high-value line items in their budgets.
Zero-based budgeting means starting each budget cycle from zero, which can be as often as every quarter or month. Every program is reviewed and justified based on current needs and priorities. For marketing campaigns, this involves evaluating and justifying every line item from scratch in terms of its expected impact and importance. This approach enables marketing leaders and campaign owners to make more strategic, data-driven decisions about resource allocation.
You also need to review the campaign budget allocation through the lens of global vs. regional needs, business unit requirements, and functional departments to make sure there is alignment. StratOps will revisit the impact models to ensure that marketing can still meet its targets with the revised budget and plan. Once the CMO and marketing leadership make the final decisions on this year’s investment plan it gets communicated to the entire marketing organization.
When executing marketing plans, it's essential to keep in mind that the finance team won’t focus on the details of line item spending. The CFO and FP&A are concerned about the predictability of marketing spend and results.
They care about:
However, communicating results can be challenging. Finance and marketing teams need to see the budget through different lenses. Which often results in speaking entirely different languages when it comes to spending.
Finance sees the world through the lens of general ledger codes and cost centers, while marketing likes to see their budgets by campaigns, audiences, or regions. Marketing budget owners also like to see investment plans by function or programs. However, marketers are often beholden to finance systems and reports that don’t provide meaningful or actionable data about their investment plan.
This disconnect can lead to inaccurate forecasts and unspent dollars. Marketers need to learn how to speak finance’s language and clearly show how their plans and investments support business objectives. Due to these different views, StratOps must ensure that even though the budgets are viewed through different lenses, marketing has the same numbers as finance. Bridging this gap is crucial for aligning both departments and ensuring everyone is on the same page.
Finance isn’t trying to be a blocker; they want to be a partner. At the end of the day, finance is focused on managing the organization's financial resources to ensure its stability, profitability, and growth. By understanding each other’s perspectives and working together, marketing and finance can ensure that every dollar is used effectively to drive the business forward.
The marketing budget needs to be viewed in real time according to the accounting standards finance follows and the campaign, program, or audience views that marketers need to make strategic decisions about their investment plan.