Fragmented buying of marketing services doesn’t serve the best interests of your brand. There’s a smarter way…
Marketing leaders: your fragmented agency supply chains are killing value creation – and harming your perceived value to your business. There is a far better way to secure new value and demonstrate the importance of marketing.
Lowering costs within a fragmented supply chain won’t remove duplicate management fees, and it is unlikely to improve effectiveness. It will, however, further raise the risks associated with pinning the marketing jigsaw together.
The fragmented agency model is slow, expensive, outdated. And entirely at odds with delivering what your customer – and your CEO – wants.
“Bringing together internal teams and outside partners to collaborate will allow the entire organisation to align on the brand vision and curate experiences to achieve that vision while delighting customers.”
Or, to cut the mumbo jumbo, customers don’t see channels, they see brands and the experiences that they deliver. Yet, in large part, marketing services are bought in channels.
ATL, digital, social, POS, print and production, media, data science, OOH. I could go on. Slow, cumbersome, expensive and hardly fit for the ultra-fast changes required in 2020.
The response from many brands has been to apply the ‘Total Cost of Ownership (TCO)’ procurement model. This brings many benefits, including management of overall marketing cost.
The TCO approach turns procurement into a measurable science. Marketers may feel that TCO simply forces prices down and that this will inevitably reduce quality as agencies substitute more junior resources for seasoned professionals. But, in truth, the onus is on marketers to prove the value that they create – something that long proved to be an incomplete science.
So, it’s no surprise that, as one procurement leader recently told me: “Those in procurement that secure lowest prices get promoted fastest.”
"Collaboration is king"
Barry Byrne, Global Head of Marketing and Retail Procurement at Adidas, has been vocalising this problem on LinkedIn.
The history of how consumers shop demonstrates just how right Barry is.
According to Which?: “In the 1950s we spent a third of our income on food shopping, but in 1974 this had gone down to 24%. By 2016 food shopping accounted for just 10.5% of our income.”
When I was a kid we shopped at the butchers, bakers, greengrocers. Whilst the individual elements were great, it was a slow process and sometimes a recipe missed the odd ingredient, or the stated ingredient wasn’t available.
When supermarkets arrived on the scene, the percentage of our income spent on food radically declined. And the overall process and deliverables are faster, cheaper, better.
It’s the same with marketing. Buying from numerous ‘best’ specialists doesn’t work for marketing ROI optimisation or consumers anymore. Overall this isn’t faster, cheaper or better.
Nor does it allow putting the customer at the centre of the conversation through the shared understanding of data and insights, making marketing both more effective and measurable.
Yes, it’s OK to employ a top end creative to give you your big idea. Yes, gain value from the buying power of a big media agency.
But for everything in-between? Remove the costly and risk-strewn handoffs between suppliers, ensure customer intelligence feeds all activities and strips out customer experience friction. Have the process managed by one, properly experienced and properly paid management team that’s invested in your success. Embed the technology and tools that can turn marketing into a science; albeit one that respects the value of true creativity.
We are the supermarket for marketers who genuinely want to create new value from their overall spend.
If you’d like to know how your current supply chain stacks up against the best we’re seeing (across the $400m/annum that clients place with us) then we’d love to take a look at your setup. Book a call and we’ll show you where you can create new value.