Marketing and media expenses are often one of the biggest costs for growing companies. Reducing both marketing and media expenses while still achieving business goals will ensure your company remains competitive. It is important to utilize your marketing budget in a way that ensures profitability and creates loyal customers to have continued success in the industry.
Marketing budgets aren’t growing but marketing needs remain consistent. Learning how to reduce marketing and media costs while hitting business goals means that you’ll be able to invest wisely in advertising so profits continue to go back into your pocket (instead of being wasted on ineffective advertising).
Every business finds unique ways to market their brand to stand out against the competition. Depending on the target market, and product or service, only one or two of these areas may have more value to achieving your bottom-line.
No matter what type of company you own, it is subject to a marketing funnel. It’s crucial to understand where marketing funds are going in this marketing funnel to accurately determine if investments are worth the effort/spend. However, it isn’t necessary to provide funding toward each part of this funnel-- the smaller the budget, the lower down on the funnel you want to go. This has proven to be the most effective use of marketing dollars. As a company recovers, and there is more money to work with, it’ll be easier to prioritize spend across higher levels of the marketing funnel thus reducing waste.
This area is about awareness and opinion marketing and includes informational blog posts and practice area articles. The intention of high-funnel marketing is to reach as many potential consumers as possible with the least amount of targeting strategies.
The conversion rates of high-funnel marketing are difficult to measure, and it’s arguably the most expensive form of marketing. High-funnel marketing also takes the longest to show results.
Some examples that are included in high-funnel marketing are:
Many companies choose to invest in high-funnel marketing because they don’t want to miss out on opportunities for new customers. However, when trying to hit higher sales goals, high-funnel marketing can take longer to convert leads into purchasers.
This is where marketing becomes more concentrated, including consideration pieces such as an “About Us” page. Once high-funnel marketing has proven successful, the move to mid-funnel marketing is made to encourage leads to stick around and “learn more.”
However, this still isn’t where you want to focus your attention if you’re trying to garner more sales with less investment and effort. Instead, turning toward low-funnel marketing will be able to assist in desired results.
This is the most “niche” area of media content; it includes preference content as well as ads that finalize interested leads into purchases. This is where consumers have reached out to a company and interacted with their business. This marketing is geared toward the people you know you want to reach and are likely to purchase the products or services offered. This strategy is the most targeted and generally results in the least amount of media waste.
This area is easy to measure and track and more effective spending here often shows very quick results.
Low-funnel marketing often includes:
Essentially, utilizing a budget in low-funnel marketing has better odds of turning a profit than high-funnel marketing. If the funding is available, using both is beneficial in the long term. However, if you are looking to trim your media and marketing spending, you’re better off concentrating on low-funnel marketing. This is where more sales are gained with less investment, then reach back toward the top of the funnel as the financial situation becomes more secure. The different funnels align with whatever goals you are trying to achieve for your business and marketing strategy, and this should be considered when making a decision.
Since it’s common practice to focus marketing efforts on those who are intentionally looking for the product offered, branded searches are going to be one of the most effective choices for money well-spent. It’s crucial to look carefully at the profits that are coming in from these searches, though. Where are leads converting into actual purchasing customers? Is it from Instagram? Guest blogs? Referrals? Wherever the biggest leads are - is where branded searches should be focused.
Continue to look at sales goal numbers and focus efforts on what is helping achieve your business’ goals. It’s also necessary to adjust spending to what is working best for a particular season. From there, you can decide whether to add money back to certain areas later - or cut it completely if it isn’t necessary.
“Word-of-mouth” marketing can be considered one of the most effective- and traditional marketing tools available, and it doesn’t cost anything for a business.
Research shows that word-of-mouth marketing is responsible for over $6 trillion in consumer purchases annually. Referrals are a specific type of word-of-mouth marketing with incredibly high conversion rates of 70% or more. These types of sales account for quicker closings than other types of leads.
Concentrate some effort on encouraging word-of-mouth or referral marketing from your best customers. You can offer a promotional product or small discounts to say thank you, still saving a large part of the marketing budget much more than focusing on other areas that aren’t bringing in sales.
Consider utilizing remote workers as a way to cut down on employee costs. Moving a select number of employees to remote work is a process but in the long run, it helps keep costs down. Offering remote work to people can also help create deeper engagement and more positive feelings among the team, as people feel that they have a greater degree of flexibility and more choice over how and when they get their required work done.
Highly satisfied employees have a better time-to-productivity ratio, which means they’re more likely to produce better sales numbers.
How many additional teams or outside agencies are being collaborated/partnered with? Effective marketing often means reaching out to an external company in respect to your in-house marketing team. This can allow your business the ability to see a return on marketing investments, but sometimes hiring an agency can take up the majority of a marketing budget.
Look closely at how many agencies and vendors your organization is working with. It’s not necessary to cut all vendors from a budget; consider utilizing one or two agencies to perform multiple tasks instead.
Creative is an important part of marketing. It’s crucial for commercials, ads, and marketing materials, to stand out from the competition and be remembered. However, it isn’t required to reinvent the wheel. Utilize the best parts of effective campaigns and give them a freshening up for the new movement.
Taking content from old platforms and revamping it for a new medium can also be an effective marketing tool. Facebook used to be the end-all and be-all of social media marketing, for example, but now, if businesses aren’t utilizing TikTok and Instagram, they’re probably not reaching their target audiences across all platforms. Take those Facebook posts and videos and trim them up for the newest channels to bring in younger, newer audiences.
Reducing your marketing and media budget doesn’t have to mean reducing sales goals as well. Many companies have success with adjusting the places they spend advertising funds while still hitting sales and profit goals, especially when they recruit help to make the most effective decisions.
Many organizations find that they can realize places where they were spending extraneous funds by embracing a zero-based budgeting program.
Instead of beginning with a particular budget and going down as you spend, start from zero. What are the places and strategies that can be utilized without spending anything? Sure, certain resources are nice to have, but are they bringing the returns expected from the investment?
Marketing today is a completely different ballgame than it used to be 50, 20 or even 10 years ago. The advent and exponential growth of technology seem to change and evolve just as soon as a business has gotten a handle on it. One of the benefits of technological advances in marketing, is the ability to automate tasks reducing billable hours to a person. Having the ability to free up the marketing team with automation, allows them to work and focus on other areas utilizing a budget more efficiently and effectively.
Chatbots – Customer service is one of the most important aspects of a business. If a lead becomes frustrated or a first-time customer can’t get their questions answered, you’ve lost them.
However, chatbots can give excellent customer service and get consumers to the right area without costing extra time and money. Chatbots are great for gathering intel, giving personalized assistance, responding to social media blogs, promoting content, and plenty of other tasks your organization requires. They’re incredibly efficient because they take only an initial setup and then essentially run themselves.
Email Auto-Responses – Good email autoresponders make customers think that there’s a person on the other end of the keyboard. They help initiate that deep level of customer service that’s necessary for loyalty without increasing workload or necessary investment in employee time.
Email autoresponders are often used for online courses or seminars after which a product or promote service can be pitched. These help scale marketing efforts, making it easier to make the money back on the costs it took to get those leads in the first place.
Instead of hiring an entirely new team, use those you already have on staff. They understand the brand, the mission, and the market. They can create marketing materials that a business can benefit from without having to pay for another salary, benefits, or office space.
Think about utilizing free alternatives in other areas, such as software and social media management. Sometimes, there are significant benefits to paid tools such as CRMs, email marketing, and SEO research; however, there are often free resources that can get the same or almost the same job done for no cost.
Questions to consider when thinking about in-house work:
Sometimes, budget cuts mean slashing expenses in difficult places. However, reducing media and marketing expenses can have both positive or negative effects depending on how this process is approached. If it’s done haphazardly and with a negative outlook, it could create a downward spiral in a business. On the other hand, if it’s done intentionally and to increase efficiency, the opportunity to save money and increase long-term profits at the same time presents itself.
Understanding the negative effects before cutting marketing and media budget can prevent difficulties within the business. If cutting costs is absolutely necessary, meaning that to come from the advertising sector, these decisions could bring about unintentional consequences, such as:
Marketing is a constant cost. That’s the way a business’s name gets out into the world and how products are purchased and put into customers’ hands. Without marketing, how will people be aware of this product or service?
Reducing marketing and media expenses doesn’t mean getting rid of advertising. It just means making smarter, more intentional choices that will still allow for achieving the goals set forth.
There will always be competion and competitors. Without marketing a product, the competition will be right there to swoop in and grab the share of the market that is being lost.
However, you don’t have to be at the bottom of this economic seesaw. If you know that competition is out there, use the remaining marketing budget to get on top and beat out the competition. Use marketing funds to get into the areas of the market that your competition hasn’t captured yet and make an impact on your sales to bring yourself toward the top.
Investing in marketing and media budget is just that—investing. The idea is that the money invested is going to convert into gains and a return in your investment in the future. Essentially, companies that don’t take risks and don’t invest – also run the risk of not growing. However, this doesn’t mean that it’s necessary to throw money at every available outlet. Marketing and media costs are valuable and should be considered with a high degree of attention. If you want to grow, you’ll have to spend- but you can spend to increase your chances of sustainability and profit.
You’re trying your best to keep shutdown from happening. You shouldn’t be spending marketing dollars without knowing exactly what the goal is. First, maximize the budget to get things in proper working order. Haphazard spending can get a business into the same difficult situation as haphazard cutting.
A recession can have an effect on everyone’s budgets, just as it’s impacted all consumer spending. Many companies have taken to offer discounts and clearing their shelves of products that aren’t selling or aren’t bringing in enough profit. That can also have negative repercussions. When companies see their competitors putting up sale after sale they tend to do the same. Instead of imitating the competition, try taking a new approach when spending advertising dollars can have its benefits during a recession and beyond.
Oftentimes, one of the hardest parts of cutting media and marketing budget is getting an objective perspective. Data-driven consulting firms can help compile the research and analysis to make decisions that are proven to be effective.
Performance analyses, or marketing audits, are reviews of all the data related to your marketing and advertising. These help a business understand exactly how much they’re spending, which includes more than just what is being spent on ad spots and digital inventory. It includes the salaries of content creators, office space for those employees, and remarketing and retargeting efforts.
It’s important to know how much money is going into each marketing sector, including software, advertising, and media. With this information, assess how much money is coming in based on what is being spent and see if it is worth continuing (or if it needs to be cut).
This is an economic law stating that if investment is increased without changing any other parameters, eventually the returns will become smaller while having to continue increasing effort (i.e., spending).
You must find the point where your investment begins to decrease, and then go backward from there. Only spend on marketing costs up to the point where the investment brings in the most profits. The part of the budget that is left over should be allocated to another area that could use a boost for increased profits.
There’s not a business out there that hasn’t made mistakes. Take advantage from each experience and use that knowledge to further future investments and marketing efforts. Take chances and continue to grow your business with appropriate risk.
It’s also crucial to consider the economic state when assessing what has worked in the past and what will continue to provide desired results in the coming years. As we discussed, the recession has affected both consumer spending and entire industries as competitors strive to remain profitable while keeping their customers happy. It would be extremely beneficial to consider the information from recessions past and learn what would work for your business. This is valuable information to keep on hand, too, as recessions aren’t random, but part of an economic cycle. They’ve happened in the past, and they’ll happen again, so with the necessary preparation, a business will be more likely to come out on top amidst this adverse time.
When in a recession, customers tend to act in the following ways:
With all these known consumer behaviors amidst a recession, businesses need to address their marketing budgets and understand how to continue securing customers even though people are becoming choosier about where they spend their money. Companies aren’t trying to dupe people into spending on what they don’t need; instead, they’re showing them why their products and services are helpful to them in achieving their goals while coming out of a recession.
There are so many ways that a business can cut costs for its media and marketing budget. Even if your company has slashed the marketing budget drastically with big goals still to hit, don’t feel that you must consider all these steps at once. Instead, choose the area that has the highest cost per conversion and examine through a cost analysis. Then, when you need to continue cutting costs, you can move down the line to the low-cost-per-conversion areas since those bring in the most profit for the least output.
Marketing expenses aren’t ever going to go away. There will always be new markets to explore and new people whom you can reach to create new customers and clients. However, investing efficiently with your marketing budget can help you to increase your profits and keep your business sustainable, even in difficult times.
If this still feels overwhelming, a solid investment can be to hire a team such as Matrixpoint. Although this might seem like an added cost, it will lower your overall spending since an outside agency can look at media and marketing expenses as a whole and advise on the best way to cut back most efficiently.
MatrixPoint’s marketing, media, data, and cybersecurity consultants will ensure that your company makes the right decisions when it comes to maximizing your marketing budgets. Our experts will design a customized strategy for your specific needs, allowing you to immediately adopt industry best practices to ensure your marketing campaigns are effective and efficient.
Ready to schedule a consultation with MatrixPoint’s marketing experts? Contact us now to learn more about how we can help.