The marketing budget is not an expense item, but an investment whose return is measured
In most companies, the marketing budget is set as a total at the start of the year and spent from that total throughout the year. Yet budget planning is not merely setting the total; it is defining in advance how that total will be distributed among brands, product groups, channels,
segments, regions, campaigns, and periods, which target each allocation serves, and what return it expects. A good budget plan is one in which every item has a campaign, a target, and an owner
standing opposite it. When the budget is built this way, every spending decision during the year can be evaluated as a contribution to a target; when it is not, it is reduced to the single question of “is there anything left in the budget.”
When budget planning is weak, three problems arise together. First, the budget is made according to the past: last year’s figure is increased by a percentage and the distribution is not questioned; items with no return live on for years.
Second, plan and actuals are disconnected: expenses sit in accounting, campaigns in marketing, results in sales, and putting the three side by side is left to a spreadsheet made by hand at month end. Third, in-year changes
are off the record: when the budget is cut or a transfer is made from one item to another, that decision stays in an e-mail, and the difference between the original plan and the current plan, along with its rationale, is lost. The result is a budget for which the question “how much did we spend”
can be answered at year end, but the question “what did we gain” cannot.
In Minerva, the marketing budget is built within the budget management module in connection with the marketing plan. Budget items are defined along the dimensions of brand, product group, channel, segment, region, campaign, and period;
each item is linked to one or more campaigns and events and tied to an owner. Expenses flow directly from purchasing, invoice, and expense records into the relevant budget item; the contacts, quotations, and orders tied to the campaign
constitute the item’s return. In this way, plan, commitment, actual spending, and achieved result appear on the same screen. Budget versions and revisions are kept with their date, user, and rationale;
transfers between items are tied to an approval flow, and limit overruns are prevented through alerts and controls. Scenario-based budget versions can be compared, and the next period’s budget is built on the
item-by-item return of the previous period.
Build your budget not by adding a percentage to last year’s figure, but as an investment plan in which every item has a defined target, owner, and return.