03 February 2010

Inputs vs. Outputs

A key tenet of channel neutral-planning is that budgets are not pre-assigned.

In Ye Olde Marketing, each discipline was given its budget before the fiscal year began; thus a marketer would usually spend the same amounts on TV, promotion, etc., from year to year.

In modern marketing we start with a consumer insight and figure out the mix of channels that will best engage the target and achieve the business objective.

So it was interesting to read this article on Adweek.com this morning telling us that "CPG's Online Spending Lags". The data, shown in the chart above, appears valid.

The headline, however, represents an old mindset. "Online spending lags" -- lags behind what? CPGs have a lot of smart people helping plan their budgets, people who actually use online media and understand its power to engage consumers. Isn't it possible they are assigning a budget to online media that properly leverages its power to engage their consumers? Or is their some percentage of the marketing spend CPGs "should" assign to online media?

The percentages assigned to all marketing channels -- retail programs, mass media and digital -- should be outcomes of the planning process, not inputs.

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