By: George Mathew
In a rapidly changing business environment, an important criterion for businesses to succeed is having a strong marketing game. This includes developing new ways to assess, increase, and monitor the efficiency and effectiveness of every dollar spent on marketing activities. The proliferation of digital media has brought several exciting opportunities for marketers, but with it comes severe complexity as well. To get the maximum value out of any marketing campaign, it is important to offer an integrated brand experience across both traditional media and digital media that customers use.
However, to effectively use digital media, it is important to have control over key parameters such as real-time feedback on customer preferences and the ability to tailor and target messages more precisely. To run high performing marketing campaigns, it is necessary that marketers make the right choices regarding what they buy, how they buy, and whom they work with. These choices aren’t easy – programmatic buying through automated-bidding systems has transformed the traditional relationship between advertisers and media owners. Hence, choosing the right agencies to partner with is even more important.
To succeed in the agency selection process, it is important that companies reevaluate the role of marketing procurement. While critical strategic decisions such as the final selection of partner agencies and the design of campaigns continue to remain with the marketing function, they can take the support of a high-performing procurement function to improve the decision-making process.
How procurement function can help fulfill key marketing needs
Better management of agency partners
Procurement teams can help marketers negotiate competitive rates and create robust contracts when dealing with agency partners. They can also help to ensure that the agencies deliver what they have promised and verify that the agencies are financially viable. The marketing procurement function can also ensure that the agencies get paid on time, which can serve as the basis for a mutually beneficial relationship between the company and the agencies.
Evaluate the performance of agencies
Another way procurement function can help marketers is by tracking and monitoring the efficiency of both the agencies engaged and the media they place. Since the procurement function is well-versed with leading supplier reviews, they would be better suited to supervise gross-rating-point/targeted-rating-point audits and hold agencies accountable for the findings.
Using marketing-return-on-investment (MROI) data, the marketing procurement function can create balanced scorecards that can track the efficiency of ad purchasing and the effectiveness of the resulting placements. In addition, when an agency is not performing well, the procurement function can lead the tough conversations, so that the marketing team can continue to maintain a close and productive relationship with the agency.
Scanning the market for agencies with innovative capabilities
An additional benefit the procurement function can deliver to marketers is by analyzing the innovative capabilities of different agencies. While marketers often look for agencies that can meet their current and expected needs, the procurement function can scan the industry for new competencies and develop processes to test the ability of partners to meet them. For example, the marketing procurement function can evaluate whether the agency can track if and where digital ads are viewable or the extent of their programmatic-buying capabilities.
How SpendEdge can help procurement teams improve marketing procurement
Analyze the capabilities of marketing service providers
SpendEdge’s team of analysts have several years of experience assisting companies on marketing procurement which makes them experts at providing guidance and recommendation to businesses looking to partner with the right marketing agencies. Our specialist advisors help clients to stay updated on new offerings in the market and how suppliers are developing their capabilities and coming up with innovative solutions.
Identify best practices while engaging with service providers
When it comes to engaging with marketing service providers, our experts help in identifying the best approach on vendor selection, engagement models, contract negotiation, and cost management. With a clear view of the best practices, our experts help clients achieve cost savings and minimize the risk in the procurement process. Adhering to preset guidelines as defined in the best practices helps companies ensure they are procuring high-quality service and minimize risks and errors.
Analyze the performance of partner agencies
SpendEdge’s analysts can help procurement leaders analyze the performance of agency partners. By benchmarking the performance of current vendors against industry standards, the efficiency of the agencies can be determined. Our experts can also help companies optimize their marketing budgets by identifying and eliminating unnecessary costs. By identifying areas where agencies are not performing well, SpendEdge can help businesses in reallocating resources to improve return on investment.
Success story: How SpendEdge helped a personal care company with its marketing efforts
SpendEdge recently helped a personal care company improve their marketing efforts. The US-based client increased their marketing spend over the last three quarters but was witnessing a decline in their MROI. They were unsure whether to continue increasing spend on current marketing activities. They reached out to SpendEdge to conduct a thorough analysis and determine whether the current marketing strategy was the most optimal approach, whether their current agency was a good fit, and what would be the key parameters on the basis of which they could analyze the performance of their agency partner)
SpendEdge’s analysts evaluated the current marketing services being used by the client and the budget allocated towards different marketing services. By analyzing how other companies in the industry were promoting their products and what other agencies were offering their clients, our analysts determined that although the current marketing activities of the client was the most optimal approach (most optimal utilization of resources), the agency they were currently partnered with was not the best fit. Our analysts provided the client with a list of alternate agencies along with their capabilities. In addition, we also provided recommendations on the best engagement practices which could help them obtain better results with their current marketing budgets. Finally, the most important KPIs to be included in the contract, and which would help evaluate the performance of the agencies, were provided to the client.
Unlock the full potential of your marketing spend with expert procurement strategies. To enhance your agency relationships, track performance effectively, and stay ahead with innovative capabilities…
Author’s Details
George Mathew
Associate Vice President, Sourcing and Procurement Intelligence
George is a procurement specialist at Infiniti Research and provides advisory services to clients across the pharmaceutical, CPG & FMCG, energy, and automotive sectors. He specializes in the procurement areas of industry benchmarking, cost modeling, rate card benchmarking, negotiation advisory, and supplier intelligence.
