CMO Andy Lark: Why B2B marketing budgets fail
In this full video presentation, one of the region’s leading marketers explains how to build B2B budgets that achieve business goals and grow year-on-year.
Andy Lark is one of APAC’s most experienced marketing leaders. The New Zealander has held senior roles at Australia’s Commonwealth Bank, Foxtel, Dell, Xero, Sun Microsystems, Nortel and FleishmanHillard. He’s worked on marketing programs for global technology brands, startups and successful advertising and communications agencies.
Lark knows a lot about marketing and digital transformation, and spends much of his time travelling the world speaking at conferences or consulting to major brands. He has undoubtedly seen everything when it comes to B2B marketing budgets … and why so many of them fail spectacularly.
“The simple reason is that most of our budgets don’t deliver results that the business expects,” Lark says.“There is a fundamental misalignment between the expectations of executives around what a budget is going to do and what a budget actually delivers. This occurs because the budget is handed down like a gift – there’s no real discourse with marketing.”
Working with clients through his consulting firm, Group Lark, he discovered B2B marketing budgets are growing but are typically just 2% of gross revenue. This, he says, is a tiny pot of money for marketers trying to grow businesses with revenues of perhaps $20 million to $40 million.
“What people don’t do is amortise (or depreciate) marketing in the same way they would an asset,” he says. “You’ve got to get real help to articulate and educate the CEO and CFO to investigate up front on CAC (customer acquisition cost) and LTV (lifetime value).”
Lark says a big problem for marketers is not just the size of their budget but how they choose to use it.
“The really out-of-whack metric when it comes to budgets across B2B orgs is in the main they are sub 50% when it comes to the things that touch the customer,” he says. “There are far too many dollars flowing to infrastructure, technology, analysis paralysis, strategy … Big ad agencies are the biggest vacuum suck on efficiency you have ever seen.”
Marketers need to be especially careful when investing in technology, he says. “You should be investing in technology but there are major structural issues with these investments. I see people getting trapped in endless, mindless SaaS contacts that don’t have six-monthly or four-monthly performance reviews. I see them getting burnt on ridiculous media and tech contracts …”
In this full presentation at the B2B Marketing Leaders Forum APAC in Sydney, Lark talks about success factors including zero-based budgeting – why “rinse and repeat” is the No.1 thing holding marketers back when it comes to getting B2B budgets right – the importance of CMO/CFO alignment, developing marketing IP and why measuring outcomes is much more crucial than tracking outputs or impacts.
“Marketing ROI is a ludicrous concept,” he says.
The B2B Marketing Leaders Forum events in Sydney, Singapore and Melbourne feature insights from the world’s leading marketers. To find out more, go to b2bmarketingleaders.com.au.
Further reading: Building a bulletproof B2B budget