Maximizing marketing spend
Maximizing marketing spend
Insight

Maximizing marketing spend

CMOs need to work with their finance and procurement counterparts to understand the factors to manage marketing spend more efficiently.

A perfect storm of events — declining marketing budgets, increased reliance on external partners, the need for a consistent brand presence — means CMOs need to extract maximum value from every dollar of marketing spend. This will require managing the effectiveness and efficiency of marketing spend.

While CMOs understand and actively manage the impact (effectiveness) of customer-facing or working marketing spend, they often do not focus enough attention on the efficiency of vendor and materials management activities, which can significantly inflate marketing costs.

To manage marketing spend more efficiently, CMOs need to work collaboratively with their finance and procurement counterparts to understand the factors driving marketing costs and where they can become more efficient. By working together, they can ensure the firm gets the most from its marketing budget.

Getting started

Working together, marketing, finance and procurement can:

  • Set the right KPIs for measuring marketing procurement. These metrics need to strike the right balance between marketing spend efficiency (cost containment) and effectiveness (revenue generation)
  • Establish a strategic sourcing strategy. This will involve identifying what work should be done in-house versus outsourced and identify the right supplier for specific tasks.
  • Design an organizational structure for marketing procurement which best addresses spend efficiency/effectiveness, marketing impact, the agility and speed required by marketing, while also taking advantage of scale to reduce supplier prices.
  • Establish a robust process for evaluating vendors that balances marketing’s desire for creativity, agility and flexibility with business essentials, such competitive rates, contractual fulfillment and measurable market impact.
  • Institute audits which validate vendor/media contract compliance as well as price benchmarking.

By working collaboratively, CFOs and CMOs can ensure they are managing their marketing spend in ways that are more efficient without compromising on the need to be agile, creative and responsive. Click here to learn more.