Spending Limits Are Like Speed Limits

by Steve Badertscher

When asking your agency to develop the most cost-effective marketing communications campaign, the most critical word in that request is cost. As we like to say around here, “We are very good at what we do, but we’re not very good at guessing.” Let me explain.

When we are asked to develop a media plan for a new marketing communications program for example, one of the most important things to establish is a realistic budget. When given a budget figure at the outset, our account manager, creative director and media planner use it as a parameter when brainstorming creative media strategies, from which they subsequently develop a formal proposal that works within that agreed upon amount to present to the client. We don’t like surprises and neither do our clients.

We approach media planning, much like the other disciplines of our business, with a “get the most bang for your buck” perspective. In other words, we spend our client’s money the way we’d spend our own…very frugally. What we all want to avoid is spending several days developing what is thought to be a very effective plan utilizing every dollar to its fullest, only to find out when presenting it to the client that they only have a fraction of the proposed budget amount to work with.

With that being said, we think the best way to approach establishing (and communicating) budget limits with your agency is to think of them as “spending limits.” And spending limits are similar to speed limits.

For example, if you want someone to travel 25 miles per hour in your neighborhood, don’t post a speed limit sign that reads 35 mph with the hope that drivers realize children live in the area and will travel 25 mph. And consequently, drivers (read: agencies) shouldn’t ignore a speed limit stating 25 mph because they would much rather be driving 35 mph to get where they’re going faster. Another thing we like to say around here is, “Say what you mean and mean what you say.”

Post the limits. Obey the limits!

It really is that simple with communicating budgets, too.

Flickr Photo Credit: http://www.flickr.com/photos/joeshlabotnik/