CMOs seeking to lower sourcing costs, speed time to value
New CMO Council research finds opportunity for CMOs to optimise sourcing through procurement and make better marketing decisions as a result.
Given today’s marketing pressures, such as tighter budgets, leaner staff, growth of digital marketing and MarTech; as well as higher expectations of increased and tangible return on marketing investments, smart sourcing has become paramount to successful modern marketing. A new Chief Marketing Officer Council report, produced in partnership with KPMG LLP, covers critical capabilities of marketing sourcing and how CMOs can enlist procurement to help marketing make better decisions.
The CMO Council report found that CMOs who more actively involve procurement in marketing sourcing enjoy a more positive impact on the overall maturity and quality of marketing sourcing decisions. Key findings include:
- Only 26% of marketing leaders actively partner with procurement in the identification, selection and negotiation of marketing vendors. This represents a sizable opportunity for marketers to leverage procurement services.
- 71% of marketing leaders who limit or avoid procurement involvement say procurement doesn’t understand marketing, particularly with creative agencies and services. This identifies a need for procurement professionals to learn how to better evaluate marketing vendors.
- 78% of marketing leaders in “very effective” working relationships with procurement tend to also involve digital/e-commerce functional groups in marketing sourcing decisions. This points to a greater maturity in digital.
Larger business strategy
Marketing should aim to leverage procurement’s expertise to evaluate and select the right agencies/vendors that can provide value to the brand and can align media buying and other activities to the larger business strategy. “Think of procurement as a strategic partnership that spans planning, vendor analysis, selection and management, rather than a box marketers need to check in contract negotiations,” said Donovan Neale-May, executive director of the CMO Council. “A rudimentary level of involvement will likely not generate any significant value for marketing.”
CMOs should involve procurement:
- To develop a global and local marketing sourcing strategy and establish sourcing processes.
- To create a framework for identification and selection criteria, performance metrics, etc.
- To optimise MarTech planning, vendor evaluations and contracting for better integration and alignment with the overall digital transformation strategy.
- To review the existing agency landscape and contracts, and to consolidate rates and spend.
Generate more value
“Considering the uncertainties in the current socioeconomic environment, marketers are facing increased pressures to elevate performance and meet short- and long-term goals while facing added pressure on budgets and spending,” said Jason Galloway, customer advisory leader and marketing consulting practice lead, KPMG LLP. “Marketers can generate more value through a closer, more strategic partnership with procurement, leading to more robust marketing sourcing, management capabilities, and measures to assess performance. In fact, the new CMO Council report shows that the majority of marketers that have an effective working relationship with procurement have greater maturity in digital and could potentially unlock revenue growth through MarTech.”
The report is based on a survey of over 200 marketing leaders across B2B and B2C industries. Additionally, in-depth interviews were conducted with executives at E&J Gallo Winery, Commvault, Audacy and more. The CMO Council is the only global network of executives specifically dedicated to high-level knowledge exchange, thought leadership and personal relationship building among senior corporate marketing leaders and brand decision-makers across a wide range of global industries. The CMO Council’s 16,000-plus members control approximately $1 trillion in aggregated annual marketing expenditures and run complex, distributed marketing and sales operations worldwide. In total, the CMO Council and its strategic interest communities include more than 65,000 global executives in more than 110 countries covering multiple industries, segments and markets.
Download: Smart Spending At Speed. Is This Real?.
For more: CMO Council.
Main image credit: Pixabay.
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