3 Ways CMOs Show ROI as Marketing Budgets Decline

BY: Alexandre Pelletier

PUBLISHED: 8/6/2020

For marketing leaders, budget time can be summed up in a two-word phrase: prove it.

Have your team’s efforts had a meaningful, measurable impact on business performance?


Is your spending on MarTech leading to the greatest potential ROI?


This pressure to prove value is felt when CMOs get wind of budget decreases. Your spending is lower but the stakes are getting higher—how do you demonstrate value? Good question.

Let’s take a look at some of the stats from Gartner’s CMO Survey and discuss what actions smart marketing leaders need to do to get ready for the ROI spotlight.

Marketing Budgets Are a Moving Target


Gartner found that although marketing budget amounts rose from 10.5% to 11% of company revenue from 2019 to 2020, 44% of those surveyed are bracing for a moderate cut of up to 5% or a significant cut of more than 15%. Gartner stated in the report, “for many organizations the budget they had at the start of 2020 will be different than the budget they spend.”

1. Make Strategic Snips


Whether you’re in the process of trimming your budget or you know cuts are on the horizon, making smart, strategic snips is the name of the game. Gartner recommends taking a closer look at your MarTech stack for potential redundancies, as well as reviewing your in-house capabilities against your agency resources, as both tend to be the areas with the greatest opportunities for cost savings.

But don’t assume that firing your agency is your best solution. I realize I may sound a bit biased here, but the reality is that working with the right agency partner can save you money while improving your return on investment. For example, there have been many times that our agency has worked on-site with clients as members of their team, augmenting their in-house capabilities. Similarly, Gartner also found that more marketing leaders are outsourcing technical and data projects to agencies. Their motivations?  Improve operational efficiencies, depth of skill and experience, not to mention the reliability an agency provides in producing higher-quality work.

I especially love this quote from Gartner’s CMO Spend Survey 2019-2020: “Agencies offer an unparalleled breadth of scope, economies of scale, and an ability to offer much-needed, external strategic input.”

In short, strategic cuts are what will make a difference, and if you’re working with a trusted partner, they may be able to point out potential areas of savings that you wouldn’t have considered.

Marketing Analytics Are a Vital Capability


Marketing analytics ranked second to brand strategy when asked about vital marketing capabilities. From Gartner’s own client conversations, they learned marketing leaders are struggling to prove the value of marketing analytics and struggling to advance their analytics capabilities.

2. Get Your Metrics in Tip Top Shape


Gartner’s recommendation here is to identify and empower a marketing analytics leader within your team, and to allow that person the autonomy to think beyond the marketing analytics roadmap. I think that’s a great start—but I also think it’s a bit short-sighted to imagine that one person in an organization—especially one in a position senior enough to be making high-level analytics decisions—is going to be an expert in each analytics aspect of every tool within your MarTech stack.

Instead—and for MERGE clients I know I’m preaching to the choir here—I’d suggest that your marketing analytics leader consult with a proven marketing consulting firm—where you have the benefit of multiple skilled consultants who literally eat, breathe, sleep, and dream in these programs for multiple clients, day in and day out—and perform an audit on your existing marketing automation programs setup, integrations, and processes.

Is there a chance that you’re basing your marketing decisions on the most accurate, meaningful data possible? Yes! But there’s an even bigger chance that you aren’t.

Why risk your ROI and your reputation on bad data (and bad results) when you can get expert guidance on ensuring your analytics are on point?

IT and Sales Are A CMO’s Top Supporters


While there may have been long-held challenges between marketing and IT, as marketers grow in technology and data capabilities, Garter found the relationships are also growing stronger. The same holds true for sales and marketing– as we strive for cross-department alignment, relations have improved here as well. It’s always good to have allies, as your colleagues can be major supporters come budget time. Similarly, it’s important to know who could throw potential roadblocks to your plan.

3. Build Relationships with Marketing Inhibitors


While positive relationships are being built in some areas, marketers still face detractors. Specifically, finance. Here again, this supports the importance marketers have placed on understanding campaign metrics and being able to demonstrate ROI of money spent and contribution to revenue. CMOs must continue to foster this relationship, and marketing operations can really boost those initiatives, as you are hands-on with the data. Nothing is more powerful than showing your CFO the marketing budget spent on (for example) a LinkedIn promotion and the sales obtained as a result. And if you are lacking good reporting in your organization, now is the time to invest in multi-touch attribution. When you speak a CFO’s language and can show documented results, it builds credibility in you, your team, and your spend– as you’re able to confidently “prove it.”