agile marketers said it’s “very easy” to get additional budget to start new tests that weren’t included in the initial media budget, compared to just 9% of non-agile marketers. This clearly indicates the power of agile budgeting in driving growth through experimentation.
So, How to grow your business using agile budgeting? Let’s delve into it.
If you’ve been in the realm of project management, you’d be familiar with the concept of Agile. It’s all about prioritising speed and flexibility to adapt quickly to changes. Agile budgeting borrows from this concept, allowing businesses to respond swiftly to changes in demand and allocate resources to areas with the most potential.
In the context of digital marketing, agility has always been a selling point, with the ability to shift budgets, test, and iterate quickly. However, the reality is that marketing channels have often been managed in silos, with budgets planned over fixed time frames. But with advancements in Generative AI, responses to market shifts can be faster than ever before. This is leading many marketers, including marketing consultants, to redefine their understanding of agility.
Being budget agile means responding faster to market and business dynamics, as opposed to being bound by fixed budgets based on strict timelines and channel-specific silos. This is a significant shift for businesses and agencies, especially those used to working and budgeting by channel.
Adopting agile budgeting isn’t a walk in the park; it requires rethinking, reorganising, and reprioritising. It necessitates tight coordination across marketing, sales, and operations, with marketing and finance working closely together.
But is it worth it? Absolutely! Changing how your business plans, allocates, and optimises digital budgets may seem daunting, but research shows that companies don’t need drastic changes to be more budget-agile. In fact, you may already be practising agile budgeting without even realising it!
Agile budgeting is the driving force behind AI-powered cross-channel campaigns like Performance Max. Instead of allocating a specific amount to each channel, your budget is dynamically applied wherever there’s demonstrated customer demand. The goal is to find incremental conversions or conversion value at your target, irrespective of the channel.
A recent survey conducted by Google and Kantar involving over 2,400 marketers worldwide showed that nearly a quarter of those surveyed were considered budget agile. These marketers adjust budgets across digital channels on a weekly or more frequent basis.
The survey revealed some interesting findings:
• 31% of budget agile marketers engage in formal marketing planning every month to align on strategy and digital media budget allocations, compared to 18% of non-agile marketers.
• For 59% of budget agile marketers, digital budget changes of 20% or more take a week or longer for approval.
• 31% of budget agile marketers find it “very easy” to get additional budget for new tests not included in the initial media budget, compared to just 9% of non-agile marketers.
• Budget agile marketers are twice as likely to call their marketing across channels “very tightly integrated.”
So, what’s the takeaway? Agile budgeting doesn’t mean discarding your planning process. It means planning for change, providing space to adapt and shift as conditions change. It also involves aligning on marketing goals that make sense for the business and implementing consistent measurement and metrics across teams.
Being budget agile doesn’t mean moving away from having in-house or agency teams focused on specific channels. It means breaking down organisational barriers to ensure regular collaboration and sharing among teams.
Establishing trust and partnership with your CFO and finance teams is also key to moving toward budget agility. As the data shows, a significant hurdle to being budget agile is getting timely budget allocation or reallocation approvals.
In conclusion, agile budgeting is a powerful tool in the hands of digital marketers, providing the flexibility and speed needed to seize new opportunities and drive growth. As a Marketing Consultant, I encourage businesses to explore this approach and leverage its potential to maximise ROI in the ever-evolving digital landscape.
