How to factor in technology changes, competition and capital improvements
For many properties, this summer will bring the process of putting together their FY2020 marketing budgets. With the number of changes in technology, competition, and market strength, evaluating how to allocate your budget has become a more critical aspect of the process. With the reduction of print and the changes to how broadcast is being consumed, many properties are weighing how to most effectively optimize for the coming year. Based on what we’ve seen around the industry, here are a couple of things to consider when approaching your next yearly marketing budget.
Allocate Properly to Each Media Channel
As mentioned, allocating properly to each media is paramount to planning an efficient marketing budget. One hot topic has been the shift in spend from print to digital marketing. Viewership of print publications has continued to decline, to the point that The New York Times doesn’t believe they will have a print edition in the next decade. That doesn’t mean to drop all print, but it does mean to make sure that the publications you are appearing in are hitting the appropriate audience and maintaining their readership.
It is also important to consider the shift in how media is being consumed. For example, the number of formats to view broadcast is expanding to include not just larger platforms like Netflix and Amazon Prime, but individual companies like Disney are shifting their products and programming to their own platform. This form of broadcast, over-the-top or OTT, is bought like digital media, so it is much more cost-effective and has been increasing exponentially in recent years. Digital advertising spend in the United States has grown to the point that digital ad spend has surpassed the spend in broadcast advertising for the last two years.
Since traditional broadcast TV viewership has remained flat, we don’t suggest pulling budget from TV. The incremental increase has really come via mobile devices over the past decade, and that trend looks to continue. Americans are simply consuming more media than ever, so advertisers need to be prepared to reach their audience through additional media vehicles and, in some markets, increased budgets.
Marketing Dollars for Capital Improvements and Expansions
Another area we have seen that doesn’t always get the attention it requires is allocating marketing dollars for capital improvements. Properties often make improvements, including new dining outlets, gaming spaces, new hotels, and expansion projects. Once these projects near completion, it’s time to turn on the marketing faucet to drive traffic and revenue to these new amenities. Depending on the level of these projects or capital improvements, sometimes it’s important to allocate a portion of the capital budget to marketing for big-ticket items, such as photo/commercial shoots and branding campaigns. When planning your budget, it’s important to understand what potential capital improvements are taking place in the coming year and to budget appropriately to ensure their success.
Be Prepared for Emerging Technology
Over the past few years, we’ve seen technological advancements, especially in the realm of digital advertising, such as geofencing and IP targeting. Once they became available, there were strategies enlisted that made them effective tools to immediately impact visits and revenue. Testing newly available technology is becoming more common, and many times properties have to wait until their next fiscal year to implement these types of campaigns. The days of “set it and forget it” media plans are in the past. Not only should you not fear midcourse adjustments to your media plan, but it should be an expectation. Reporting is more readily available than ever, so near real-time feedback of how your marketing dollars are performing should lead to adjustments to ensure your dollars get their maximum reach.
So as we creep up on budgeting season, take a step back and look at areas you may not have considered previously, so that you can ensure you are making the necessary adjustments that lead to an efficient and profitable year.