Budgetary Ties

Ah, September! It's the month in which many corporations wrap up the fiscal year. As a result, advertising agencies often receive many requests and proposals for new projects right around now.

The resulting RFP's, NDA's and marketing briefs try to cover every possible angle. But one critical item is often TBD or even MIA in this information stream...and that's the client's budgetary parameters.

Why does this happen? Perhaps lips are zipped because clients sometimes feel that sharing budget details with the agency too early in the process will put their company at a disadvantage. They fear that the agency will automatically jack up its pricing. In reality, nothing could be further from the truth.

When you share a budget with your advertising partners, you give them a framework on which to build your campaign. In fact, agency teams actually welcome challenges. They are usually happy to work with reasonable numbers and limitations and, believe it or not, the most innovative strategy can sometimes stem from limited funding (just think about why tactics like guerrilla marketing and social media advertising were born).

But when you don't disclose a budget, you're really doing both your company and your agency a disfavor. The creative team doesn't know whether your plans call for a Maserati or a KIA. If you see a luxury plan, you cringe because it's out of your price range. If the agency then shows you a more economical approach, you feel cheated when comparing its impact to a higher-priced strategy.

It's almost like walking into a store to buy a necktie. The salesperson asks if you'd like to see the Armani collection and you say "Yes!". He tells you that the tie you like is $250 and you murmur "Hmmm!". He then asks how much you'd like to spend and you say "Just keep it as reasonable as you can" or "I'm not prepared to share that information with you right now."

When the budget question is avoided, no one gets the necktie...and no one gets the sell.