“Scope is crucial for creating awareness and attention, leading to sales.”
Marketing budget is central to the marketing manager’s mission – but misconceptions are commonplace. Josefine Bradt from PHD Sweden debunks five budgeting myths.
Myth 1: There is no exact science to estimate the size of the marketing budget that a brand needs to grow
Before you present the marketing budget for the management, you should have done your homework. First of all, you need to know what your business goals are, i.e. what do you expect the management to achieve?
Knowing your business goals, you can calculate the amount of budget needed using good investment planning tools and mathematical calculations.
Once you get an idea of the relationship between business goals and performance based on budget, there are often two options left: Increase budget or lower goals. If this is not done at an early stage, you could be blamed at the end of the year.
But how do you get a brand to grow? You need scope to gain brand awareness with the goal of becoming top-of-mind.
Myth 2: To grow a brand, it is enough now to invest only in digital media
Range is required to get a brand to grow. Social media and paid search can, for example, act as cost-effective alternatives when compared to TV, online video, radio and outdoor advertising, but it’s often not enough. In order to reach your audience as a whole, you often need TV in combination with online video, radio or outdoor advertising.
But why should I invest in traditional TV when no one is watching?
Myth 3: No one watching TV anymore
Even if you do not watch traditional TV anymore, it does not mean that the Swedish population does not look at it at all. The report “Swedes and the Internet” launched in early October 2018 shows that 80% of those aged 26–35 years old and 85% of those aged 16–25 are still watching traditional TV daily.
It is true that traditional television viewing is decreasing and will continue to decline, but at present, traditional TV offers an unbeatable range which still makes it a very interesting marketing investment.
With traditional TV, radio or outdoor advertising, you will reach the broad mass and with online video they target specific audiences that will provide incremental reach. This combination has proved to provide a very high and cost effective range.
We have purchased traditional TV for a long time, but how do I buy online videos or even digital media in a cost-effective and modern way?
Myth 4: Programmatic purchase of digital media is not as effective as the market says
Despite a varied reputation, programmatic buying is the most effective way to buy online video and banners. It is humanly impossible to be as effective as an automated purchase option.
For example, if you are looking for the cheapest flights to Paris, it is probably more effective to use a price comparison service than to compare prices for all airlines.
Similarly, programmatic purchases where systems automatically compare and bid on inventory. However, purchasing digital media spaces is more complicated than buying airline tickets, so qualified experts need to strategically optimise their advertising.
But should we hire experts or help outside?
Myth 5: Only the largest (and richest) companies can afford to use media agencies
Historically, companies have turned to media agencies primarily to get help with purchasing media to reach a broad audience, as it requires time-consuming administration, and expensive, high-quality systems rarely available internally.
In order to achieve a relevant scope, media investment should not be too modest. Nowadays, there are lots of smart companies that choose to help media agencies for their marketing when it comes to areas like search, analysis, social media, as well as the entire media strategy.
By using a media agency, companies save money on wages, education and expensive systems, while the quality of the work performed often increases.
Hiring a media agency does not always mean investing in millions of dollars; it can be done for a few thousand a month.