Sourcing the Sacred Marketing Cow
Among all indirect categories that can be strategically sourced, one of the hardest to gain enthusiasm for from end-users is always marketing spend. "It's not a commodity" your director of brand strategy will say. "We live and die by our creative," says your advertising director. But if you play your sourcing cards right, marketing spend is something that procurement can take on and not only get savings, but improve supplier performance and results.
Curious about the best ways to target marketing spend? There's a good summary in a recent Supply Management article that explains some of the high-level findings in a study from Efficio, a consultancy, about how to target marketing spend. The article notes that the study "outlines challenges for purchasers when they work with marketing, which include: agreeing roles and responsibilities; educating marketing departments about the total supply chain approach; and demonstrating the value added by the procurement function."
If you have ten minutes, I'd urge you to skip the article and read the entire Efficio whitepaper on the subject (no registration required). The paper is of the quality that you would expect to pay for from a major analyst firm or market research house. In it, the authors spell out processes for sourcing marketing spend, as well as which categories make the most sense.
For example, media space buying is an "easy" category to address with savings in the "3-12% range" while design agencies are more "difficult" to source, although it’s possible to achieve savings in the "5-30%" range by "changing the fee model and building it into negotiations."
In my view, Efficio did a bang-up job on this study. They clearly know a tremendous amount about sourcing marketing spend. In fact, I'd strongly suggest you consider taking their advice, going after the area from a sourcing perspective and getting your marketing team on board with it. But remember one thing ... if you're a software vendor, consultant or BPO provider who wants to improve your marketing and thought leadership, please be sure to make note that my firm, Azul Partners, is not a commodity! And besides, given our buy-side background, we will be sure to deploy aggressive counter-sourcing strategies if you include us in a bidding event ;-)
- Jason Busch
Curious about the best ways to target marketing spend? There's a good summary in a recent Supply Management article that explains some of the high-level findings in a study from Efficio, a consultancy, about how to target marketing spend. The article notes that the study "outlines challenges for purchasers when they work with marketing, which include: agreeing roles and responsibilities; educating marketing departments about the total supply chain approach; and demonstrating the value added by the procurement function."
If you have ten minutes, I'd urge you to skip the article and read the entire Efficio whitepaper on the subject (no registration required). The paper is of the quality that you would expect to pay for from a major analyst firm or market research house. In it, the authors spell out processes for sourcing marketing spend, as well as which categories make the most sense.
For example, media space buying is an "easy" category to address with savings in the "3-12% range" while design agencies are more "difficult" to source, although it’s possible to achieve savings in the "5-30%" range by "changing the fee model and building it into negotiations."
In my view, Efficio did a bang-up job on this study. They clearly know a tremendous amount about sourcing marketing spend. In fact, I'd strongly suggest you consider taking their advice, going after the area from a sourcing perspective and getting your marketing team on board with it. But remember one thing ... if you're a software vendor, consultant or BPO provider who wants to improve your marketing and thought leadership, please be sure to make note that my firm, Azul Partners, is not a commodity! And besides, given our buy-side background, we will be sure to deploy aggressive counter-sourcing strategies if you include us in a bidding event ;-)
- Jason Busch
Report:
http://www.magicandlogic.co.uk/IPA_Magic_And_Logic...
Self Promoting Blogger's Summary Blog Posts:
http://blog.sourcinginnovation.com/2006/11/06/magi...
http://blog.sourcinginnovation.com/2006/11/07/magi...
Or am I going to have to read it and do a cross-analysis to find out?
I did not read the other report, though from a practical standpoint, I found this to be an excellent piece.
I'd encourage you to write a comparison if you have the time.
I especially like the apporach of "standardize approach to events", as here is very often some prime beef hidden.
Anyway, I really never understood the "war" between marketing and purchasing, as a marketing manager is always interested to get the most out of his budget.
Sometimes marketing departments are afraid of splitting up a job into several pieces: e.g. creation, prepress and printing. Often so called "full service agencies" are used to get the whole package and react somehow offended, when suddenly the marketing department expects them to compete not only for the creation but also production. No big surpise: often the agencies get kickbacks from their printers and so agency looses money, when they suddenly do not get the printing job as well.
When I used the first time e-Sourcing for marketing productions, it created some ...noise. But it is really amazing how fast both sides, marketing and the connected supplier base, got used to it.