For far too many companies, marketing is a category that is actively managed by key suppliers (e.g., agencies of record) rather than the organization itself. It’s one of the last “hold out” areas in which vendors typically have access to far better insight on performance and ROI than the organization spending money in the area. This is already changing, however, in larger companies, especially in CPG, retail and high-tech, as procurement leads and more analytical CMOs regain control and influence from the creative types that previously ran the show on what was all too often a solo basis.
Accenture's Spend Trends Report has a number of category insights into the area which we believe are quite useful when it comes to stretching marketing dollars further (for additional insight on how to manage marketing spend, see the long-list of Spend Matters research briefs and coverage at the end of this post, including how to use the right set of analytical tools to measure, benchmark, and improve relative spending and performance on a cross-channel basis). As one observation into improving marketing performance and spending outcomes, Accenture notes that the Association of National Advertisers’ recent report on marketing and procurement is showing progress.
Specifically, while “marketers want to protect their relationships with key agency and creative partners and doubt that procurement understands their needs,” and “procurement has tended to view marketing (like many other spend categories) as an area to drive cost savings—not what a marketer wants to hear … the new survey shows signs that this sometimes contentious relationship is improving: 55 percent of marketers and 61 percent of procurement executives say that the marketing/procurement relationship is strong, and more than 60 percent of procurement executives believe the relationship has improved in the past year.”
Exploring other areas of opportunity, Accenture recommends considering the relative cost and attractiveness of targeting the growing Hispanic population in North America compared with traditional outlets and demographic sources. In this regard, Spend Matters could not agree more (although the equation is not always a slam dunk, as Accenture suggests). But it’s why we are launching our own Spanish language (based in Mexico) site and beginning to write in Spanish in our main coverage as well. Specifically, as Accenture recommends, “Marketers should examine opportunities to take advantage of the attractive cost and ROI profile of the U.S. Hispanic vs. GM pricing environment while it lasts. At the same time, advertisers should leverage market intelligence and benchmark information to avoid overpaying for media at a time when media outlets could engage in opportunistic pricing (i.e., the World Cup halo effect) to close the price gap. The same discipline applies to evaluating Hispanic-focused agencies: overall costs may be lower, but per-FTE costs may be less competitive.”