How to Create a Budget Your Boss Will Love in 5 Easy Steps

By Katie Paine, CEO, Paine Publishing

For a lot of organizations, summer means budgeting. And for many of you, this dreadful task is the professional equivalent of final exams combined with a visit to the proctologist—and a migraine headache thrown in for good measure. Never mind the average PR or social media manager’s loathing of Excel spreadsheets. You’re now juggling the hopes and dreams of your department and staff with cold, hard accounting realities.

Fortunately for those of you who have good measurement systems in place, you have a superpower waiting to help: Your data. Here’s the short answer on how to use it:

• Gather what data you have.
• Rank your last years’ efforts, from Perfect Performance to “I’d never do that again.”
• Factor in the resources each required, from Pain In The Ass (aka PITA) to Easy-Peasy.
• Analyze the results, and create your 2016 budget accordingly.

So, don’t put off that dreaded budget session a minute longer. Once you’ve got it out of the way, you can go to the beach and enjoy summertime. Here are the details:

First, assemble the data you need to make the tough choices you’re facing. You’ll need:

1. Last year’s budget, ideally broken out by initiative, program, or at least by activity. For instance, events vs. publicity efforts, or PR agency vs. social.
2. Your agreed upon definitions of success. One might be “increasing the marketable universe,” which would entail bringing in leads or inquiries, message dissemination, increase in engagement, etc. Or it might be “get our messages across to our target audience,” or “reposition our product line.” Whatever the goal, make sure whoever needs to approve your budget agrees with it.
3. Any extant data from your PR/social media monitoring or measurement. Include Google Analytics or other web analytic data, any survey data you might have, as well as any social engagement data that is available.
4. Your organization’s overall priorities, goals, and targets for 2016. Not necessarily the exact number, but at least an idea of how much the company wants to grow next year. There’s a big difference in budgeting for a small company that wants to increase sales by 50% and a major corporation that might hope to grow market share by 1%. You will also need to know what leadership’s top priorities are.
5. A list of any other significant events or parameters that will affect your promotional plans. For instance:

• A company anniversary,
• A new competitor,
• Entering a new market (geographic or industry),
• Any change in brand or rebranding effort,
• A significant repositioning, or
• A major new product launch.

Now follow these 5 steps:

Step 1: Look at your list of priorities for 2016.
What programs/initiatives/campaigns are similar to something you did in 2014 or 2015? List them all out and then note next to each one what it cost in terms of resources and direct cost.

Step 2: Do some counting.
How many events/campaigns/initiatives did you do in the 2014-2015 budget year? How many press releases did you issue? How many tweets or posts did you produce? Will you be expected to do fewer, more, or the same level of activity in 2016?

Step 3: If you tracked the results of each event, then give yourself a shiny gold star.
What were the goals of each event: Desirable publicity? Leads? Web traffic? Engagement? If you knew them and tracked the results you’re 90% there. If you didn’t track anything at all, you can still do a lot of analysis using historical data available in Google Analytics or your traditional media analysis.

Step 4: Get out your calculator.
Nothing fancy here, but you do need to do a bit of division. Take the budget for each event and divide it by the number of “results,” e.g., leads, traffic, articles, posts, comments, etc. That gives you your efficiency factors for each one.

Step 5: Analyze your results.
Look for the most efficient and least efficient programs or offices. Figure out the context and reasons behind the best and worst performing and see if more training and improved performance might enable you to maintain current head counts but improve your results.

Here are a few examples of how this has worked in real life:

Example #1: Planning Press Tours

When I was Director of Communications for Lotus (now part of IBM) our mission was to get messages out about new products. I decided that I needed to weigh the cost of our activities against the degree to which each one got our messages across — I called it the CPMC (cost per message communicated). I took all the coverage of all the product launches we did. Then I discarded any coverage that did not contain a key message. I then took the cost of each new product launch and divided it by the total reach (this was back in the day when you could actually use audited circulation figures to determine the extent to which you reached your target audience).

I quickly saw that our average cost per message communicated was $0.75. The most efficient tactic, with a cost per message communicated of $0.03, was a narrowly targeted press tour of key financial journalists with our top knowledge expert in the field. So I revised my budget to double the allocation for expert press outreach. I was also able to quickly squelch a request for a massive event that my data showed would be very ineffective. It was similar to one we had done the prior year that cost a whopping $2.30 per message communicated—or 76 times the cost of the press tour.

Example #2: Efficiency of Interviews

If your plans are heavy on press contacts and press releases you may want to use an average interview per pick up ratio to determine how many resources you will need to continue your current rate of coverage. For one client I calculated the average number of interviews it took to generate a media placement, in this case it was 2.6. I then further analyzed the data to compare the efficiency of each regional office. We brainstormed on why some offices were far more efficient than others. The client then decided that with improved training and efficiency, she could improve the efficiency of the least efficient offices, and maintain current staffing levels while increasing her output in 2016.

Example #3: Evaluating Events

One of my clients was going into a tough budgeting cycle and he knew he faced severe cuts. At best he’d be able to maintain two-thirds of his existing budget. He asked us to do a deep dive analysis into all the events they had organized in the prior year. We rated the success of each one based on an overall engagement index, which we agreed would include social engagement as well as quality of media coverage and downloads of his visitor guide. We force-ranked all 12 events from 1 to 12 based on how many resources they required. We showed him a chart, similar to the one below, which clearly showed which events were most cost-effective and which were least, based on the stated goals. He quickly shifted his budget around to focus on the events that yielded the best results for the least amount of money.

###