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How to cut a million dollars off your marketing budget

When you’re running a marketing or creative department one of the least fun things to hear your boss tell you is “Great job last year. The work was great. The campaigns worked really well. This year we need to do the same amount of work – at the same quality – but we have to cut your budget.” Huh?

That’s pretty much how the two years I spent at LeapFrog, the beloved toy, electronics and learning apps brand went. Consumer products – and especially toys and gaming – is a risky business that requires huge outlays of cash to manufacture products that you hope will be hits at Christmas time. No matter how many data models and consumer tests have been run, ultimately the consumer will decide the fate of the company for the next year while looking at their Christmas list. With over 60% of revenues for the year hinging on the last quarter, everything has to work just right for the margins to work. In our case, we’d manufactured too many units of a gaming console that came to market a month and a half later than planned, which effectively shortened our most significant sales window by a third. The results were in. We’d done well in the months our products had been on shelf – but that missing month of sales meant we’d be discounting units for the next year… thus, everyone’s budgets were cut.

How to cut a marketing budget fast:

1. Shift your product campaign strategy to a master brand strategy

As an advocate of brand-led campaigns I’m already behind this in principle, but the fact is that raising awareness for several different product line brand names is a lot more expensive than raising awareness for a single brand umbrella with multiple products. Take the example of Disney versus Warner Bros… It doesn’t matter what movie, TV show or game Disney produces; Disney fans trust the brand and are likely to try it just because of the prominent presence of the master brand on the product. Warner Bros, Fox or other content makers however have to raise awareness individually for each movie, TV show or game they produce (each with its own budget).

This gives them the flexibility to produce a wide array of content for different markets, while Disney must produce family-friendly content only, but the cost efficiency of each marketing dollar Disney spends is far higher because awareness is built in. If your product lines let you do this, you can reduce creative agency fees dramatically by building multiple campaigns, landing pages, commercials and packaging systems from a single style guide… more on that later.

We did this at LeapFrog and our agency fees were literally on-third less than they were the previous year... Depending on your marketing budget, this alone could be your missing million dollars (or more). But it’s not right for every brand.

2. Streamline review and approval processes

In a lot of companies, it’s unclear who needs to see what at which stage for it to be considered “approved”. And frequently executives will have overlapping mandates which creates a lack of clarity in who gets “final approval” on product and brand marketing materials… Which means more time is spend redesigning, rewriting and refactoring work as last-minute “approvers” weigh in and insist on more changes.

In traditional matrix organizations, often these changes address Cover-Your-Ass edge cases from risk-averse managers who don’t want to get blamed if something goes wrong…. It’s literally the opposite of an Agile process. When you add up the costs of the people in the meetings as well as the dollars spent on senior designer, copywriter and engineer time these ‘opportunity costs’ become real costs that bloat your budget when you are forced to hire freelancers to work on other projects that your team don’t have time to work on.

There are two possible remedies for this:

  1. Switch your entire corporate culture to an Agile approach (it’s possible in a small company — but more difficult if you produce physical goods for retail with hard deadlines)

  2. Use a RACI chart to manage a matrix environment in an established company.

RACI stands for “Responsible Accountable Consulted Informed”. If you look it up on Wikipedia you’ll see other variations of it…. It doesn’t matter which one you use. The point is, it gets everyone who thinks they have input on a project into a single document and forces department heads to assign roles for them… So there is no longer any guesswork about who approves what, when and how many rounds of review are allowed.

Getting approval to go out of scope should require making a business case to a CMO or COO. Get their buy-in; they’ll be happy to do this since you’re addressing a thorny problem for them that’s way too in-the-weeds to deal with.

The key to this working is buy-in from all stakeholders. Expect all the ugly politics about who should have final approval to come out in these RACI chart meetings; which is the point. It’s better to figure it out here than use whole teams of people as pawns in a dumb power struggle between two execs whose jobs overlap.

Once the chart is set, with everyone’s input, empower a program manager to ruthlessly defend the process with your and your bosses’ backing… they’ll love it. You should expect to have to enforce it once or twice for it to stick, but once in place your freelance costs from rework will drop like a rock.

At LeapFrog this step alone reduced freelance costs across all media by 30% in one year and sped up time to market on physical products by 10% (from clarity on packaging approval processes). Air freight for late products to get to stores by shelf date went from 50 products the previous year to 1 product in the next. Boom.

3. Focus

Most companies that run out of runway do so because they have too many good ideas and not enough people or capital to execute them all very well.

Instead of making hard choices and remaining disciplined in focusing on one or two things until they’ve achieved a pre-defined benchmark, they re-allocate resources every few weeks to different priorities, reacting to comments from board members, analysts, outside experts, midnight inspirational visions, new survey results or their spouse. Every company has to be able to adapt to shifting market dynamics — or pivot if needed — but there’s a big difference between pivoting at a critical moment based on hard data and just being unfocused.

Alot of visionary leader types are also a little A.D.D. I’ve found. So it’s incumbent on YOU to manage up and help them fight their own destructive instincts long enough for you and your team to put something into the world that will provide actual data from which to make further decisions. This means agreeing on specific, measurable milestones and identifying what data you will look at once you’ve reached each milestone. Try to get your CxO to agree to only make big changes at those moments.

Expect a lot of pressure to cave on this within a few weeks — especially if your CEO fancies themselves a reincarnation of Steve Jobs (I’ve met a disturbing number who do). But hold your ground — and remember; if they run out of runway, you’re getting laid off before they are.

4. Find one photographer you trust who owns their own studio

We spent alot of money on photoshoots… and awarded work to many different photographers. I’m all for patronizing the arts, but in a budget crunch, look for a jack-of-all-trades photographer who can produce great work across several different styles for all of your product lines.

The key is to find one who owns their own studio. The reason is that photographers are project-based small businesses. That means their income is feast-or-famine – and a photographer who owns a studio is carrying higher overhead costs than one who doesn’t. A photographer like that would be happy to negotiate a deep discount for a guaranteed minimum amount of work each month that covers his or her overhead. It allows them the rare luxury of being able to find more lucrative or diverse work without having to worry about how to cover their bills… And you become their most important client so scheduling emergency shoots are no longer an issue.

5. Repeat the above with other vendors

Everything I just said above is also true for other vendors who have high overhead costs (if you have enough business for them that it significantly impacts their bottom line). If you print tons of stuff, negotiate an exclusive with one printer. If you ship a lot, negotiate with one carrier. If you regularly produce videos for content or social media campaigns, pick a small production company and become their most important client with a pre-negotiated price sheet. Remove the incentive for independent vendors to try to get as much as they can from you for each project, not knowing if they’ll ever get another job from you again.

6. Use the 80-20 rule and style guides to reduce labor costs

Senior creatives are expensive. Production artists are not. The difference you are paying for is the ability to invent something new, creative and unique – not the production of ads, videos and web pages. So if you’re supplementing your in-house workforce with freelancers to get it all done, look at the campaigns you have to produce and identify the 20% of work that will make the biggest financial impact for your company. Then have your senior creatives develop a detailed style guide for how to produce multiple variations of the other 80% of work.

No one will like this at first; you will appear to be automating creativity, which you kind of are. But that’s okay. When you’re done, you can hire production teams in lower-cost areas of the country (or world) to produce templated creative that is reviewed and approved by your in-house team…. And your valuable creatives will be able to focus almost all of their time on the most high-profile, impactful work you need to produce for your company to succeed.

It’s also a great chance for you to teach your managers and directors how to manage remote teams and optimize brand guidelines for global brand management automation (yes, a lot of catch-phrases in that sentence — imagine it on your resume!)… which will help them grow into business leaders one day.

7. Clear your production artist’s plates

In order for your production team to absorb all of that templated creative work, they have to stop doing things that are a waste of time right now.

If your company doesn’t already have a digital asset management system (DAM) in place, you should get one… or if you’re small enough, use file-naming conventions to create an organized self-serve asset archive on Box, Dropbox or Google Drive. You’ll know it works if your production team is no longer being asked by anyone in PR, social media or marketing to “find this” or “send that”... which is likely eating up 10% - 20% of their time. This also will mean that unapproved photos, old logos and work-in-progress video edits won’t be posted anymore.

8. Teach your managers how to manage a budget

Build a shared Google sheet with a row for each manager and a column for each week in the year. Show your managers how to track their weekly freelance expenses and let them manage their own freelance budget quarterly.

You’ll be surprised how good they’ll get at negotiations, time management and holding their vendors to budget when they can control the best way to spend money to excel at their jobs. This eliminates unplanned requests from your managers that force you to go over budget; it becomes part of their job to make sure they’ve allocated enough resources for seasonal increases in demand or big yearly trade events.

And again, this is a critical mentorship opportunity to help marketers and creatives become managers. To help them succeed you need to walk through what they’d like to accomplish each quarter and help them think through the resources required to accomplish it… but the end result is on-budget execution that very rarely goes over.


There’s many other ways to cut a marketing budget as well – this is just a few I’ve got time to write about right now. Let me know if you’d like to hear more or want an in-depth how-to article on any of the items above. In the meantime, you can see more detail on alot of this in my LeapFrog case study here.

Thanks for reading!

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