Companies often engage in numerous marketing initiatives, utilizing a variety of communication channels, including Public Relations (PR), direct internet communication, promotional activities, merchandising, and more.
Clarity and transparency in promotion and communication programs offer multiple benefits, especially during periods of confusion about program prioritization. This leads to more effective budget allocation and better preparation for future investments.
This poses the challenge of evaluating the effectiveness of these channels, reaching the right targets, and ensuring a positive Return on Investment (ROI).
To gain a comprehensive understanding of how priorities are set across various functions—mainly Marketing, Sales, Services, and others—it is crucial to develop a detailed portfolio of promotional and communication activities.
The key to gathering such information is measuring the purpose, objects, and means of communication. This effort aligns teams transparently with company objectives, avoiding unexpected, muscular activities that defend individual budgets without considering the full perspective:
This exercise promotes transparency. Finance should support this effort by providing validated data and ensuring appropriate population of data fields, avoiding an individualized approach. Communication expenses must align with Finance’s records, making Finance the starting point for developing a valid ROI score.
Running this transparency exercise provides invaluable insights, creating a baseline for current programs, ensuring a well-balanced approach, and preparing for better budget planning:
Overall, measuring marketing programs allows for wise budget distribution across multiple owners and programs. Again ensure Finance supports the approach for visibility on program allocation and costs.
Identifying metrics to assess program effectiveness is absolutely necessary. It can be a real challenge but key to ensure ownership on communication program success.
The best approach is probably to ask program managers to define metrics that measure program performance and success in meeting objectives. These metrics should then be reviewed and agreed upon with the teams to ensure alignment and commitment.
Measuring ROI for marketing programs is often challenging. It requires identifying suitable metrics to assess program effectiveness and determining each program’s contribution to ROI improvement. Understanding the benefits of each program, evaluating their efficiency, and quantifying their share in the ROI improvement are essential.
Another approach consists in measuring revenues versus costs on program expenses. This approach that is measuring margin impact is very useful to understand the weight on profitability of those marketing programs but somewhat far from a measure of program performance. For this reason, additional metrics to measure program performance are certainly required.
Measuring ROI can be challenging and may be misleading if used as the sole metric for program effectiveness. Ensure program managers provide a comprehensive set of metrics, including ROI, to demonstrate program performance.
To implement these strategies, start by designing a simple list of programs, including parameters such as purpose, objects, means, scope, budget, and program leaders:
Begin with clarifying the purpose, the “why”, of these programs to understand motivations and align them with needs and benefits.
A valuable practice is to list all programs with their ROI. Some programs may be low-cost and necessary, easy to maintain and continue. reversely, some may be high-cost with undetermined impact and performance, requiring focus and attention.
Consider building a matrix with two axes—cost and ROI—to highlight these dimensions for programs. This approach is essential. Additional dimensions, such as customer segments, market segments, communication channels, and company organization, can also be included for a more comprehensive analysis.
Understanding the budget from the perspective of customer or market segments helps comprehend where the budget is spent and how it effectively supports growth segments. Prioritize budget spending on growing and more profitable market or customer segments. On the other hand, investing in declining segments should raise a warning signal.
Identify communication paths such as public relations, advertisements, sales campaigns, promotions, and retail campaigns. Allocate the budget appropriately across different channels to support sales activity effectively. Creating a multi-year history of promotional program spending helps assess the adequacy of spending to objectives and needs. When faced with cost reduction on marketing programs, consider adjusting reductions based on ROI to minimize impact while maximizing performance for the company.
Also, consider who is spending the promotional and communication budget. It is not rare for this budget, for accounting purposes, to include the budget Sales or other functions can spend on various customer events. Is this budget well spent? Is it preventing marketing from deploying adequate promotion and communication programs? Pay attention to all promotional and communication programs, not just those run specifically by one function.
In conclusion, the company must spend these promotion budgets wisely. Ensure visibility and transparency so that decisions are made confidently, and budgets are spent according to the objectives set by the company. This is why the “why” is so helpful in prioritizing communication programs.
Managing marketing program costs by source, impact, and channel is crucial to ensuring appropriate investment. Over time, this approach helps evaluate both adequacy and effectiveness. Engage everyone involved in communication program spending, even those outside the marketing function. “Follow the money” to gain a comprehensive understanding of the marketing promotion and communication budget.
© marketingdecision.org
As discussed, building a list of promotional programs is essential. Done well, this enables project comparison, provides insight into customer impact and ROI, and helps teams decide which projects to invest in. This ensures a fair balance across regions and markets, in line with company priorities as outlined in the marketing plan.
The following section may include tools, some free, some with a fee to support this site development. If you consider a tool should be presented in this section and is missing, please let us know at: contact@marketingdecision.org
Explore tools related to the topics covered in this section. For a wider selection, visit our webshop using the link below, or continue browsing our marketing mix pages for additional insights and solutions.
© 2025 MARKETING DECISION SOLUTIONS. All Rights Reserved.
