The Essential List of 12 Data Elements for Marketing Budgets

Marketing budgeting is a challenging task. Boards are always asking challenging questions and unfortunately, the standard finance systems can’t help. Combine this with a budget that has literally thousands of purchase orders spread across many marketers and the reporting and forecasting gets that much tougher. A CMO who can’t answer basic budgeting questions will raise red flags about their ability to respond to more advanced questions around CAC, ROI, and overall marketing effectiveness. With the right data cube of information, however, understanding spending is easier. This post looks at the 12 data elements required when building your budgets so CMOs can confidently answer the most challenging questions from boards and the CxOs. This post won’t tell you if spending on the Superbowl ad makes sense, but it will provide a roadmap to understanding where your spending went.

The Root of the Problem

Financial systems are not designed to track and present spending information in the correct format for CMOs to make informed decisions. Finance systems were designed around the purchase order and account codes. They are very good at tracking vendor spend. But marketers think in terms of programs. Each program compromises a mix of spending types, purchase orders, goals, products, regions and even accounting codes. This gap between how finance reports data and how marketers think causes issues for CMOs.

For example, let’s look at a typical trade show. A trade show program for a single venue might include classic trade show expenses. It might also include contractors, advertising, some SaaS software, tchotchkes, etc. The trade show might consist of a customer event in addition to the focus on lead generation. Sales might have a piece of the event to close significant transactions. Different product teams might have a more substantial presence depending on their growth goals and the trade show attendees. 

In this example, saying all these expenses are “trade show” isn’t accurate. The costs for this event fall into multiple accounting codes, not just “trade show.” In addition, the purpose of the spending targets new customers, existing customers, and sales support. Budget attribution by product is also different. Some product teams cost more money to exhibit, whereas other products might not be exhibited at all. Finally, your central trade show team has the money to run the trade show infrastructure. Still, a different group might have money for the customer event, and individual product teams might decide to spend on special giveaways or sponsorships. But, when all is said and done, the CFO or CEO or board might ask, “How much are we spending on the trade show?”. The ability to provide the top-level answer, but more importantly, detail the subcomponents, allows the CMO to demonstrate supreme budget control.

Financial budgeting systems are rarely built to handle this level of tracking and reporting. While financial tracking systems are always the system of record for spending, most marketers deploy a custom solution to track their spending. These custom solutions are likely:

• Excel-based

• Custom no-code applications built with products like bubble.io

• Solutions like Allocadia (now part of Uptempo) or Plannah ( now part of Planful)

Regardless of your path, here are the 12 data elements you need to track for each program you decide to run.

#1 Easy to Understand Program Name

A common sense name for the program is essential to understand the spending quickly. In our example above, assuming we were going to Kubecon 2023 Amsterdam, “Kubecon 2023 Amsterdam” would be the program name. We would then add multiple expense items beneath this program, such as T&E, advertising, sponsorships, etc.   

#2 Funding Status and Timing

Programs are either requested or approved. Once approved, open purchase orders and signed contracts commit the company to spend. As the program is delivered, the program manager can forecast the total project based on contracts, open purchase orders, and any additional spending not reflected by the contract or current PO. Finally, actual expenditure is recorded as the bills come in from various vendors.

In summary, spending for programs are categorized as:

  • Requested
  • Approved
  • Commit (total of open POs, contracts signed)
  • Forecast (estimate of total expenditure based on commit + future contracts/POs not yet opened)
  • Actual (Bill’s received)

In our trade show example, let’s assume everyone put in money for the tradeshow in December for an estimated spend of $400K. By August, some product teams have pulled out, while at the same time, the booth transportation costs have gone up 2x. By September, the month of the show, it appeared as though two hundred and fifty thousand $250,000 had been committed to spending, with $15,000 spent and a revised forecast of $300,000 based on the expectation of an additional $50K for onsite expenses with the company credit card. With this information, the CMO can increase spending on other programs since the forecasted amount for the show is now $100,000 less than the budgeted amount.

#3 Owner

All spending has to have an owner. Delegating the ownership to the person responsible for the ROI or business case is critical. Delegation also forces SaaS applications, contractors, agencies, and other highly scrutinized expenses to have owners to vouch for the fee. The owner also provides a clue as to the type of expense and provides accountability to the forecasting process.

#4 Product

For multi-product portfolio companies, understanding spend by product where possible helps improve the CAC precision. Reporting on spending by product also helps strategically allocate money across cash cows, growth products, and early-stage investments.

#5 Goal 

Marketing can invest in new logos, upselling existing customers, cross-selling new products, retention of current customers, buzz, and awareness. Understanding the allocation of investment across these categories helps a CMO balance spending and answer questions on the marketing allocation of resources. 

#6 Region 

As companies scale globally, understanding marketing spend by region is vital to ensure the spending aligns with revenue goals by region. In addition, staffing new sales territories requires marketing to over-invest to drive results.

#7 – #12 Expense Details

While the first six metrics describe the marketing program, the next group of entries are the expense details for the program. Most programs will have multiple expense line items. Expense details equate to purchase orders which map to the finance team expense controls.

The expense detail items are summarized in the table below for the Kubecon2023 trade show:

#7 Expense Name#8 Type
(Accouting Code)
#9 Vendor Name#10 PO Amount#11 Actual Amount#12 PO NumberDate
Booth Sponsorship (10 x 10)19191 (Trade Show)CNCF Foundation45,00045,00023410/1/2023
Trade Show Consultant19230 (consulting)Joe Acme12,0004/1/2023
Stickers19240 (premiums)All Premiums.com4564562374/1/2023

7) Expense name is a common sense name for the item getting procured. Similar to the program name, someone not associated with the program should be able to understand the expense.

8) Type is the accounting code for the item. Most finance systems use this account code as the building block of the budget.

9) Vendor name is self-explanatory. The ability to run reports on spending by a vendor or search for a vendor’s name is essential. Vendors sometimes bill the company without reference to the department or person who procured the service. Or, in some cases, CFOs want to know why you are spending so much with vendor X.

10) PO amount is the amount of the purchase order. When the PO amount is filled in, the amount committed for the program starts to go up since the PO provides the license for a vendor to bill the company for services delivered.

11) The actual amount is the final bill sent to the company. Using Google Adwords as an example, you could open PO for $100,000. But the final actual bill from Google might only be $95,000.

12) PO Number – this is the crucial linkage between the finance and marketing systems to track actual expenses through the system.

Conclusion and ROI

These are the twelve key budgeting data elements. Tracking these will enable CMOs to understand their marketing spend. But what about ROI? Many budgeting SaaS providers have hooks into Salesforce for ROI calculations. The challenge is the breadth of ROI-type measures. For example, how is the ROI analysis done for PR programs? Or for CRM system implementation? What about a trade show? ROI analysis is integral to the budgeting process but can be handled separately. The first challenge is getting data into a format that allows the CMO to understand the budget by goal, region, product, program, owner, and accounting code and to understand the current finance spending target against the budget allocation, forecast, commitment, and actual spending. 

Photo by StellrWeb on Unsplash

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