Zero Based Budgeting / ZBB in a Covid era
“I wanted to thank Entropy for your support through our Zero Based Budgeting project. Entropy have provided very effective and hands-on support. You have been a fantastic addition to the team in the past few months and brought invaluable media expertise. It has been a pleasure working with you. A big thanks from all of us.”
Emmanuelle Grimbert, Marketing Director, Danone
What is Zero Based Budgeting?
Zero Based Budgeting is a method of budgeting in which all expenses must be justified for each new period. It gets its name from the fact that the budgeting process starts from a “zero base”, in effect what is sometimes called “bottom up” planning.
How it is applied will vary depending on the sector and nature of the business. Some examples of how it can be applied within marketing are:
- Creative and Production – ensuring the right assets are used to address your goals and market needs.
- Media Planning – by developing the optimal media planning principles for the business.
- Business Planning – reframing budget setting to deliver fewer, bigger and better campaigns.
What experience do we have?
We’ve run the Zero Based Budgeting programmes for for various brands, including Unilever and Danone. Whilst the broad concept is not new, the recent trend in the number of companies embracing Zero Based Budgeting was started by Unilever when it was quite public about adopting the approach in 2016. Our Founder, Alex Tait, led the Marketing Services ZBB programme for the UK and Ireland Unilever business.
The FMCG / CPG sector was the most visible in adopting it but many other sectors and types of businesses have followed suit.
What are the benefits?
Based on our experience, we firmly believe that embracing the principles of Zero Based Budgeting can save most brands up to 5-15% of their marketing communication budget with no impact on growth.
Brands often then choose either to use this budget as a P&L saving or to reinvest it to fuel growth.
We are happy to meet speculatively to put together the business case for ZBB. We are so confident of our ability to deliver significant impact to your P&L that we are entirely willing to work on a performance fee model.
Contact us to find out more.