# Case Study: The Budget Increase That Was Actually a Cut | Crank Source: https://wearecrank.com/case-studies/consumer-leisure-budget-marginal-return-2024 A marketing budget that rose in cash terms was flat in real terms and shrinking as a share of income, while paid search was already proving what the next pound would return. --- ![Consumer leisure case study: The Budget Increase That Was Actually a Cut](/placeholder.svg?dpl=dpl_DzKS3KHkqdwxj68CH4uXeN4PoDZ6) Consumer Leisure, 2024 # The Budget Increase That Was Actually a Cut A marketing budget that rose in cash terms was flat in real terms and shrinking as a share of income, while paid search was already proving what the next pound would return. Challenge A large consumer leisure business required to generate over £200 million of revenue from its marketing budget was holding a budget that had risen by over £1 million year on year, with no analysis showing whether that was actually an increase at all. Media inflation of 4 per cent, and 8 per cent on television, eroded the rise to roughly £0.3 million in real terms, and marketing had fallen as a share of income, from 8.4 to 7.9 per cent, or 7.5 once inflation was counted. Read as a cash figure the budget looked like growth. Read against inflation and the revenue target, it was a cut, and nobody had put it to the board in those terms. Approach Build the budget case from marginal return rather than from last year's number, what the next million actually returns, and what it costs not to spend it, and model a do-nothing scenario alongside the investment case so the cost of inaction is as visible as the cost of the money. Crank's role here was advisory rather than hands-on delivery. Outcome An additional £1 million of second-quarter paid search was forecast to return £4.4 million in revenue and £1.6 million in contribution, a net benefit of £2.6 million after the spend itself, against a do-nothing scenario showing around £7 million of revenue lost in the same quarter. 01 ## A budget that looked like growth, and wasn't The marketing budget had risen by over £1 million year on year. Media inflation of 4 per cent overall, and 8 per cent on television specifically, eroded that rise to roughly £0.3 million in real terms, and marketing had fallen as a share of income at the same time, from 8.4 to 7.9 per cent, or 7.5 once inflation was counted. The business was being asked to deliver materially more revenue from a budget that was, in real terms, essentially flat and shrinking relative to income. Read as a cash figure, the increase looked real. Read against inflation and the revenue target, it was a cut, and nobody had put it to the board in those terms. 02 ## Evidence already sitting in the account Paid search was meanwhile delivering 20 per cent more bookings and 18 per cent more revenue on 42 per cent more spend, efficient growth, already happening, inside a budget conversation that was still being had in last year's-number terms rather than in terms of what the next pound of spend actually returns. 03 ## What the next million was worth, modelled both ways The budget case was built from marginal return rather than from the prior year's figure: what an additional pound returns, set against what it costs not to spend it. An additional £1 million of second-quarter paid search was forecast to return £4.4 million in revenue and £1.6 million in contribution, a net benefit of £2.6 million after the spend itself, while a do-nothing scenario, modelled alongside it, showed around £7 million of revenue lost in the same quarter. Separately, first-party audience targeting produced 4,176 bookings on roughly £22,000 of spend where standard targeting would have produced 2,569 for the same money, about £55,000 saved on spend that would otherwise have gone to a less efficient audience. 04 ## What this means for you A budget that rises in cash terms can still be a cut once inflation and your revenue target are in it. Argue for money on what the next pound returns, not on what you spent last year. ## What the marginal-return case showed, modelled both ways +£1m/+£0.3m real Marketing budget growth, cash terms vs. after media inflation 8.4% → 7.5% Marketing as a share of income, once inflation was counted £4.4m forecast/£2.6m net Revenue and net benefit forecast from an extra £1m of Q2 paid search £55,000 saved From first-party audience targeting vs. standard targeting, same spend Drawn from Crank's advisory work for this consumer leisure business in 2024\. Figures rounded and the sector described broadly. Client not named. ## Want to know what this looks like in your own account? These findings came from asking straightforward questions before any budget moved. We're happy to do the same for yours. [ Talk to Wearecrank](https://wa.me/447457416922?text=Help%20my%20business)[Get in touch](/contact) [← Back to all case studies](/case-studies)