Daily Insights

Money Matters: How Marketers Set the Budget

By: Ewan Mcintyre | Oct 21, 2019

Marketing leaders again named finance as the top organizational inhibitor of the marketing strategy in the Gartner CMO Spend Survey 2019. Yet there are signs of an impending thaw in the historically chilly relationship between marketing and finance. The source of the warm front? Marketing is getting better with money.

In the past, marketing leaders have relied on old-school, fixed budgeting methods. Even today, 25% of all marketers use rolling approaches to budget setting, and 22% still use the incremental approach of setting last year’s budget as a baseline and increasing off of it. But these methods are giving way to more agile budgeting methods. In fact, about half of all marketers now use project-based, activities-based, or zero-based approaches to spending.

For instance, 22% of marketers say they now define budgets by pricing individual projects. That’s almost twice the 12% share who said they used project-based budgeting in 2017. These fiscal indicators are part of a larger shift in marketing away from once-a-year strategy setting and toward a more agile, iterative and continuous improvement approach to strategy.

For marketers seeking warmer relations with finance, more mature approaches to fiscal management may provide the balm you need to cultivate a stronger collaboration.