SBP 015: The Art of Budget Planning, with Dr. Grace Kite

Budget planning.  These two words can bring back nightmares for many marketers. A daunting task that pins marketers against finance departments in a game of chicken to see who blinks first. We know how difficult this process can be, so we called an expert to help us.  In this week's show, Dr. Grace Kite, Founder and economist, joins us from Magic Numbers to discuss budget planning, channel distribution, and what percentage of total revenue should be allocated to marketing. She also helps us understand the role of econometrics and shares how she really feels about CPA! This is a timely episode that we know you will enjoy. Enjoy the show! ____________ Our Guest: Follow Dr. Grace Kite on LinkedIn: https://www.linkedin.com/in/grace-kite/ Magin Numbers: https://magicnumbers.co.uk/ Magic Numbers Profile: https://magicnumbers.co.uk/people/dr-grace-kite/ Marketing Week Author Page: https://www.marketingweek.com/author/grace-kite/ ____________ The Sleeping Barber Podcast: Follow our updates here: https://www.linkedin.com/company/sleeping-barber/ Get in touch with our hosts: Marc Binkley: https://www.linkedin.com/in/marcbinkley/ Vassilis Douros: https://www.linkedin.com/in/vassilisdouros/ ____________ Literature: Three data-led pointers for marketers during budget season: https://www.marketingweek.com/grace-kite-three-pointers-budget-season/ When it comes to marketing payback, words matter just as much as numbers: https://www.marketingweek.com/grace-kite-marketing-payback-words/ If there was a marketing effectiveness ‘crisis’, it’s now over: https://www.marketingweek.com/grace-kite-effectiveness-crisis/  ____________ Timestamps: 0:40 - Introduction to Dr. Grace Kite 1:30 - What percentage of total revenue should be allocated to marketing? 6:30 - Does the industry impact what percentages of total revenue are allocated to marketing? 9:00 - What is the best way to allocate your budget? 10:30 - Econometrics and channel distribution.   11:50 - The 60/40 rule, budget allocation, and the nuances between offline and online. 14:00 - Excess share of voice and its impact on setting budgets. 17:30 - Market orientation and its impact on budget planning. 20:00 - Budget planning during a crisis. 23:00 - And why testing is important. 26:00 - Reach vs. frequency. 29:35 - Academic research may not be representative of all industries.  31:20 - Online vs. Offline media 38:04 - Did we shift to digital means more than we should have? 40:10 - CPA and why it can be misleading. 44:00 - What is incrementally? 49:00 - When SEM is important 52:36 - The role of econometrics measuring the efficacy of marketing. 54:00 - Defending research and the marketing budget. 57:30 - Defending budgets through the lens of time. 59:40 - Decrease in price sensitivity. How do marketers influence price sensitivity?  1:09 - How to get in touch with Grace 1:10 - Post-pod discussion with Mark and Vassilis