Marketing budgets

Now I have spent my entire working life in the product marketing function of large software companies. Each year I go through a planning and budgeting cycle. I ask for alot and get very little. I know it is not just me - I have many friends, in similar roles, and they have the same frustration. I think I understand why but lets explore my logic.

There are three key Marketing functions in any large organization. Corporate Marketing where the CMO sits and primarily governs the brand. Field Marketing ususally reports into the regional General Managers. Finally Product Marketing will report into the Heads of R&D for the product / business units. Each of these marketing functions has an annual budget. The question is - how is that budget allocated and in what proportions?

THINK GLOBAL

Corporate Marketing needs the big bucks to spend on promoting that brand. Consistently that investment only returns a 5% success rate (meaning out of 100 people you market to at this level only 5 will retain any kind of recall). The tools for Corporate marketing are advertizing, PR and the Web prodominately. These are high cost mediums and combining that with the 5% success rate means you need to increase that investment even higher.

ACT LOCAL

Field Marketing is the closest to customer in terms of customizing the messages for their particular market. They are also closely aligned to revenue targets and revenue generating marketing activity. That being tha case they can justify large budgets as long as they are bringing in the customers.

BUILD THE FRIGGIN THING

Now we come to Product Marketing. Arguably the most important function in any business (I am not biased). This function takes the product to market, packages and positions it in a way that makes it attractive to the target market. Here is the problem. Product marketing does not really use advertizing and PR too much and there is no real revenue drivers (not sure you would all agree with that - but it depends on the industry and the company). The key measurement is building products that make sense and making sure they get to the customer in a way that makes sense.

So there we go. I have little budget because my marketing friends in corporate and field get first bite of the cherry and I then find it hard to justify awareness and revenue generating activity that they are already doing. But that's OK...my job is far more mentally challenging (at least that is my story).

Comments

[Dhruv]

Tell me Chris, how much money would you need? Also how much return can investments in Product Marketing generate, i'm assuming its a bit more than 5%?