Marketing Procurement Blog

Be Proactive, Not Reactive!

Posted by on in Costing, Marketing, Procurement, Return on Investment (ROI), wasted spend | Comments Off on Be Proactive, Not Reactive!

As a consultancy marketing procurement we are normally called in by companies to help solve a problem. It’s usually the case that they need to cut back costs in some form or another, so we’ll look through their data and speak to their suppliers to ensure they are getting the best value for money on all aspects of their marketing spend. Nine times out of ten, we will find that there are enormous savings to be had, working practices to amend and marketing activities to align. To the client, this all sounds great. We charge a fee that is comparatively insignificant to the savings they make, get on with the work and help their company to get the value for money they need. Job done. Increasingly, companies are bringing in external experts to turn around the fortunes of their struggling brands and businesses. I recently read an article based on Beatrice Lafon, who has built a reputation as one of the world’s top fixers having worked with retailers such as M&S, Dorothy Perkins and River Island to helping address the problems they face. More recently, Lafon has been setting down roots as the president of Claire’s Accessories Europe, where she is working on an essential recovery plan for the company. But why does it have to be like that? Why do companies wait for problems to arise before seeking help? This blog post was inspired after meeting with a potential client who was refreshingly ahead of the mark. They understood that they required help as they saw the future of their already struggling industry: one with difficult times ahead due to legislation changes and greater competitiveness from new entries whilst the ‘big boys’ dominate further. Without help, they would be left behind when the economy emerged from its recent troubles, leaving them open to the risk of mergers and acquisitions. Some companies are unable to avoid turmoil as it is in the nature of their business, but every company can be proactive rather than reactive to ensure that their company is as healthy as possible. Healthy doesn’t necessarily mean making outrageous profits, but simply aiming to be best in class at what they do. This will ensure that you are in a good position, whether being well-placed to solve any problems that arise or remaining dominant in the market whilst others stall. The problem is not about a lack of internal resources hampering efforts to ensure that a company is operating efficiently, because the majority have these available. The problem is that the internal resources are so stretched due to cut backs in labour that nobody has the remit or time to focus on anything other than the next financial year. Cost transformational projects are far easier to complete whilst the company is stable, as the changes will take time to be absorbed and the benefits apparent. The conversation is also much easier to have with all participating parties, so the uptake from stakeholders is far greater, increasing the overall success of the project. I am, however, a believer in the philosophy ‘If it ain’t broke, don’t fix it’ and with small, regular and accurate changes to your process, you can ensure it won’t break and that it won’t require fixing. If this is the case, you will not...

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BIG is good, but SMART is better

Posted by on in Advertising, Cost Transformation, Costing, Marketing, Media, Return on Investment (ROI) | Comments Off on BIG is good, but SMART is better

Marketing Effectiveness: There are many occasions when adopting the ‘be big’ attitude works and works well. Large TV advertising campaigns such as Guinness’$20million ‘Tipping Point’ or the £13.4million advert Aviva Insurance used to promote their name change from Norwich Union highlight the potential successes and failures of going ‘big’. They can lead to an award winning memorable and talked about campaign (Guinness), or they can just as easily leave consumers underwhelmed (Aviva).  Like many marketing channels, ‘big’ can be used effectively but how efficient or necessary is it? We understand that certain brands require this approach but for the most part, we prefer to be ‘smart’ rather than ‘big’. Often, being smart with your strategy can provide you with both greater efficiency and effectiveness on your investment, but this doesn’t necessarily mean lower spending. Obviously, you can decrease your spend by being smarter with the marketing channels you use and the activities that you opt for within each of them. However, with marketing budgets normally set in place, the money is already there. So why not spend the same amount but spend it better? This way everyone wins!’ Social media is a good example of being too focused on ‘big’ as many companies invest time and resources in appearing on all forms of social media however the same effect, or a better one, can be achieved by having a more relevant and targeted approach. Another great example of this is in media buying where the debate over broad and targeted spend continues. Media buying agencies want to spend more and cover all bases, but the analysts say that the quality of spot mix is crucial and more important than quantity. We have actually seen the effectiveness of this targeted approach and put this in place with our clients. We can quickly gauge where spend is being wasted through, for example, decreased action from sales or sign-ups when compared to other times or channels. We can then take this away to either recoup savings or invest more heavily where we see increases in sales or acquisitions. We believe that being ‘smart’ is vital in remaining or becoming truly effective in your marketing activities, ensuring your ROI is ever increasing. Many companies believe they are in touch with their customer’s needs and know how best to target them, but we know that it isn’t always the case. It is imperative that you conduct internal and external audits to understand your capabilities as well as those of your suppliers. You have to make sure that your agencies are on the same page as you; where your customers can see you and you can speak to them. So much wasted spend is accounted for through ineffective messages used on the wrong channels, simply because these ideas have worked once before and have never been changed. To be smart is to be current, relevant and aware of the industry and its ever-changing interactions. The fundamental issue for any company is to ensure that you are being smart. Ask yourself these questions and think about whether you truly know the answers: How do I know that I am communicating effectively with my potential customers? How do I know that I am not wasting money in ineffective marketing channels? How do I know that I can’t...

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What is the value of marketing procurement to SMEs and growing companies?

Posted by on in Procurement, Shared Service Procurement | Comments Off on What is the value of marketing procurement to SMEs and growing companies?

All departments add a level of value to your company. IT, finance, sales. These functions are all clearly defined in the corporate hierarchy and deliver on their mission day in day out. In a medium sized or growing business this may not be the case for procurement. Procurement is often seen as a function that can be developed later on and it then takes time for it to be seen for the value it delivers. Why is this? The truth is that most people assume that they know how to buy things; computers, stationery, print, office space etc. In the most part they are right, we spend our lives spending money and our perception is that we all do a good job. To be honest this is probably true and when the company is small, or the value of the purchases is low it’s probably ok to pursue this path. Procurement really comes in to it own when the value or significance of the purchase becomes such that overpaying, or buying the wrong item, will have a significantly detrimental effect on the company. It’s important to note that suppliers are in business to make money. For most suppliers, if they see an opportunity to make a sale, or increase margin, they will do so. When they come across a client that doesn’t understand market dynamics, there is the potential for them to overcharge or under service the client. Procurement is the function that can help with this. As with any function, having the time to focus on the problem at hand will help to deliver the right result. Having the right tools and training will further bring the problem to a swift conclusion. One of the most significant oversights we see in SMEs and growing businesses is underestimating the time it takes to realise that there is a need for procurement and then the time it then takes to get it working. Sales and training Sales people all over the world are sent on training courses in how to handle objections, negotiation, understanding their product and helping to shape customer perceptions; conversely most companies who don’t have a procurement function don’t train their people to buy things. What we see is that in many instances they’re typically thrown into the situation where they are vastly over matched by the supplier who has a practiced approach and is well versed in dealing with client objections. The imbalance is clear and it gives the salesman an unfair advantage. The role of procurement is to bring this balance back to the negotiating table and ensure that the deal agreed on is the right one. SMEs and growing organisations are renowned for not paying enough attention to procurement. In instances where the company is producing a physical product they are more likely to invest in procurement services for their direct costs (and rightly so) but for a large number of companies if they looked at their indirect spend it forms a huge percentage of their overall spend and should be managed effectively. We can see from research that for a large number of companies their cost base is structured as follows; direct costs, salaries, marketing, other indirect costs. With this spend pattern in mind it should be clear that the procurement of marketing...

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Shared Service Procurement for SMEs – Cost Transformation

Posted by on in Cost Transformation, Marketing, Procurement, Return on Investment (ROI), Shared Service Procurement | Comments Off on Shared Service Procurement for SMEs – Cost Transformation

We live in a world where large corporates have the ability to leverage their size and scale across all areas of procurement. This drive towards a more and more unified procurement methodology is helping these companies to drive efficiency into their business in a way that has never happed before. We were recently at a marketing procurement conference in London (we were one of the sponsors) were there were about 160 specific marketing procurement practitioners, this was probably the largest single gathering of marketing procurement professionals in Europe, if not the world this year. What it showed us was the range and breadth of marketing procurement talent out there and the variety of, and level success, that can be achieved. It’s clear that the more advanced and forward thinking the company is, they’re more likely to have a dedicated marketing procurement function. We all know that marketing is complex and requires the procurement department to have a multitude of category expertise; Media, Print, PR, Events, Market research and so on. Where this expertise is in place, and is working well with their colleagues in the marketing department, it is possible to drive tremendous value into the marketing spend. It’s also clear for a lot of these companies that’s it’s not all about savings anymore, it’s more about “value” and how you can help to drive the company forward. This really is where marketing procurement can help and often as not the cost savings are delivered more as a consequence than a primary driver. For the SME this is the problem. Their spend is not in the same league as the large corporates and they may or may not have a dedicated procurement team, but almost certainly they wont have a marketing procurement person.  This lack of expert resource doesn’t mean that the problems they face, or opportunities they miss aren’t the same as the large corporates, it just means that the playing field isn’t level and they’re missing out on a whole range of value opportunities. Time to level the playing field. As part of our ongoing progression in marketing procurement we’ve been toying with models where we can leverage our experience and expertise with large corporate clients to allow SME’s to gain access to the category specific marketing procurement expertise on an ‘as and when required’ basis. We’re now rolling out ‘Shared Service’ model that is tailored to allow companies to tap into a team of dedicated category experts without the need to take on full time resource. This model isn’t project based, it’s constructed to provide a best in class procurement service on an ongoing basis. It covers everything from opportunity analysis, category management plans, benchmarking as well as more tactical procurement like tenders and pitches, as well as everything in between. The potential benefits for SMEs are enormous. We know from experience of both the SME and corporate market that the cost of running this service can be offset within a few weeks, typically just looking at a single category. Marketing procurement professionals across the world will all attest to the fact that where there is a green field site there are definitely savings to be made. The SME sector is full of savings. Cost Transformation Of course savings are important, and for SME’s this is...

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How do you deliver cost transformation in marketing spend?

Posted by on in Marketing, Procurement, Return on Investment (ROI), White Papers | Comments Off on How do you deliver cost transformation in marketing spend?

How do you deliver cost transformation in marketing spend?

Too many cost reduction programmes fail to deliver in the longer term. In this white paper the Marketing Factory looks at the key steps to delivering cost transformation. Whilst cost management is vital in all areas of business, marketing spend should be at the forefront of this transformational process for many companies as it often forms the second largest area of spend within the business. Most companies have embarked upon some form of cost reduction programme, but a recent survey by the Marketing Factory shows 40% of all programmes fail in the short term and this rises to 60% in the medium to long term. So why do some companies manage to deliver sustainable results whilst others fail time and time again? To download the rest of this white paper click on the link below. Marketing Procurement...

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Marketing Factory sponsors ProcureCon Marketing 2013: Marketing Procurement Conference

Posted by on in Marketing, News, Procurement | Comments Off on Marketing Factory sponsors ProcureCon Marketing 2013: Marketing Procurement Conference

Press Release For immediate release The Marketing Factory, a London based international marketing procurement and effectiveness consultancy has today signed up to be a sponsor of the forthcoming 2013 ProcureCon Marketing Procurement conference in London. The 2013 ProcureCon Marketing Procurement conference in London is Europe’s only dedicated procurement event for digital & marketing services and is an ideal platform for the Marketing Factory to showcase it’s procurement and marketing effectiveness offering. The Marketing Factory will be represented in panel discussions by founding Director Milan Panchmatia talking on the topic of “Sharing best practice on global agency compensation/remuneration methods and practices” The Marketing Factory focuses on three core disciplines: Marketing Effectiveness & Analytics, Marketing Procurement Consultancy and Outsourced Marketing Procurement. The company works across multiple industries with clients ranging from small and medium sized enterprises to Global 500 corporations. Over the past 20 years the team has built a uniquely powerful combination of marketing industry expertise, proprietary analytical models and technology solutions. The Marketing Factory provides its clients with innovative marketing effectiveness and procurement solutions that deliver high levels of ROI quickly. “We’re really excited to be able to be to sponsor this event as it covers a great agenda for the delegates including important topics such as agency remuneration, procurement ROI and media transparency”, said Milan Panchmatia, Marketing Factory Director.  “Playing and active part in driving the marketing procurement agenda forward is important to us; it enables us to share ideas and best practices and helps to keep marketing procurement at the forefront of all marketing decisions” Directors Milan Panchmatia, Peter Marson and Eduardo Salazar bring deep experience from all aspects of procurement, media, marketing, analytics and management consultancy. They have consistently delivered pioneering approaches and insights through a diverse range of projects. The Marketing Factory provides actionable insights at both a strategic and tactical level with a clear focus on delivering cost savings and increased value from clients’ marketing spend. About ProcureCon for Digital and Marketing Services: ProcureCon for Digital and Marketing Services is a bespoke forum bringing together over 250 senior level marketing procurement professionals to benchmark against best in class collaborative practices on strategy, execution, ROI and optimisation of digital and marketing spend. It is the ONLY event in Europe to approach the marketing category from the procurement point of view, bringing together cross industry marketing and procurement professionals in one room. The event will feature senior level executive speakers representing a broad range of FTSE 250 companies – from FMCG, pharmaceutical, electronics, telecoms, finance, retail, energy, utilities, travel and hospitality sectors. If you have any media queries, please contact Elliott Harvey on +44 (0)20 7605 1699 or...

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Marketing procurement in growing organisations

Posted by on in Marketing, Procurement, Return on Investment (ROI) | Comments Off on Marketing procurement in growing organisations

Marketing procurement in growing organisations

Deciding on when to bring in external marketing procurement support can be difficult. It can be an expensive business and if you’re organisation / leadership team has never bought this type of service it may be difficult to assess whether it really will deliver the benefits you’re looking for.   Many businesses face this issue, it’s normally when they’re too small or lack the complexity to have specialised internal resource, but large enough that the level of complexity in the marketing they use demands that they need some external help. By not enlisting help they run the risk that they may not be getting the best value from their suppliers, and more importantly, may be leaving themselves open to risk.   We spent some time last week going through this process to try and understand and identify the conditions, including levels of complexity that would pinpoint where companies, and company types are on this journey.   This process has proven to be incredibly useful and has led to a number of conclusions.   The range of spend and number of marketing channels used has a direct correlation to when support should be sought out. The growth curve has a direct impact on whether the company is likely to have sufficient talent in house to be able to handle the challenges There are a number of distinct phases in the journey – they can be broadly categorised as seen in the chart. What’s clear to us, looking internally at clients past and present, as well as new targets is that with high growth companies they always feel the pain of growth and most often don’t realise that there is more that they could / should be doing.   To help, we’ve noted down some key questions, if you can answer yes to any of these then it’s probably time to look for some help. Key questions  Objectivity: Are you internal teams always working at breaking point, leading to missed opportunities? Have they had time to form an objective opinion on what is considered best practice within the category? Expertise: Do you really have the in depth expertise within your organisation? Marketing  is made up of many disciplines, being a great generalist will only take you so far. Speed or Scale: Do you need to move quickly? Is your organisation embarking on growth plans that are ambitious and challenging to a point where your internal teams will no longer be able to cope? Stealth or anonymity: Is your organisation working on plans that require a special team in place, programmes that require detailed marketing procurement support but can’t be disclosed to the wider procurement...

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Round-table discussions at The Gherkin

Posted by on in Advertising, Marketing, Media, Procurement, Return on Investment (ROI), wasted spend | Comments Off on Round-table discussions at The Gherkin

The Marketing Factory is getting ready to host another of their regular networking events on Thursday 18th April at The Gherkin in London. This particular event will be a breakfast round table discussion and will feature experts with media buying and marketing procurement backgrounds. How often do you hear that your media buying agency is getting inside your customer’s hearts and minds in a way that only they can? They use psychographics, geographics, demographics and more to ensure the delivery of your key messages to the right audience in the most cost effective ways possible. Sound familiar? Our argument is that how do you know you’re getting the best value for money or that what they’re advising is actually best for you and not the most profitable for them. Can you review the data and have you asked the questions, the right questions? We’ve spoken to many companies over the years regarding their media spend and more often than not, they’re being told that with their media profile, they are getting the best deal available to them and more often than not, that just isn’t true. We are holding a round-table discussion on the topic of whether you can and should buy direct as well the issues surrounding this. We will cover questions such as: Media planning vs. media buying- Should you have separate agencies for planning and buying? Inventory Media – Is it right for you? Is your agency using this to hide the audit trail? Could you buy direct from publishers and what the costs/ benefits might be? The issues surrounding relationship building with media owners? Is buying direct good for the publisher and how can this benefit you? Do you have the specific expertise required to deal with media agencies and owners? This particular breakfast is only available to client-side executive level management and as such we will only consider places to these members however please feel free to enquire for future reference as we hold topical events on marketing procurement, marketing analytics and marketing strategy regularly throughout the year. Previous events we have he ld included senior strategic input from Google’s sales team and executive board members from top agencies Ogilvy & Mather and JWT, providing guests with key insights into the trends and habits within online search and advertising costs. To RSVP or if you require more information, we would appreciate it if you could reply to events at marketing-factory dot co dot...

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Keep up with Google through SEO Effectiveness

Posted by on in Advertising, Return on Investment (ROI), Social Media, Technology | Comments Off on Keep up with Google through SEO Effectiveness

Each year Google makes on average 500 changes to it’s search engine algorithms. Some of these are small incremental changes, some however are fundamental to the way we see the web. This relentless pace of change is actually speeding up, so we all need to know and understand enough in order for us not to have our business websites damaged irreparably. The focus here is on Google as in the UK over 90% of all search is done via Google, albeit Microsoft’s Bing is applying a good amount of competitive pressure, but it’s still a way off in terms of overall impact. So what’s the reason for all the changes I hear you say? Well the search market is maturing, people (SEO companies) are becoming more and more sophisticated in manipulating the search results and the revenue that Google is getting is plateauing. This latter fact will clearly put extra pressure on Google to maintain their lead in the search market and they can only do this by continually improving search results for the user. For many of you I can hear you say “why does this matter to me? My site is fine.” The truth is that, depending on how clean your SEO team has been, future Google updates could have a massive impact on how you are viewed on the web (this is not just about B2C it is the same for B2B) As an example of this, in February 2011 Google introduced the Panda update, in it’s first version it affected over 12% of all English language results. The Google algorithm looked at the content on a site in order to determine which site had quality content and which sites were just repeating, copying or plagiarising content from other sites. Not you? Possibly not if you’re a B2B site, but in April 2012 Google then rolled out the Penguin update. This affected 3.1% of all English language search queries. The Penguin update sought to decrease the ranking of sites that had unnatural ‘back-link’ profiles (a back-link is a link from someone else’s site to yours). This building of backlinks has been the bread and butter of most SEO companies for years, some do it in a sensible way, some not so much so. Many of the websites affected by just these two updates have never recovered. Q. Do you know what your SEO team or agency has been doing on your behalf? So, in order to stay ahead of the game and keep in Google’s good graces, what can you do to future proof yourself? 1.     Keep your eye on the ball. Keeping abreast of what Google is doing is key. If your site is managed by an agency, ask them what’s going on – do they provide you with a summary of changes? 2.     Google yourself. When you look at your website in search results, how does it look? It’s not just about you; it’s also about what your competitors are doing. Your agency might tell you that you’re at position 8 – great I hear you say – but for that particular search term Google may only show 7 results on the first page. Also, don’t forget that when you do Google yourself you should do it in “incognito mode (Google Chrome Browser), because your normal...

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The marketing of Procurement to Marketing

Posted by on in Marketing, Procurement, Uncategorized | Comments Off on The marketing of Procurement to Marketing

Marketing and Procurement departments, it seems, may forever be at logger heads. Procurement is often seen by Marketing as the monsters coming in to cut Marketing’s budget. They are seen as being surrounded by numbers and graphs, contracts and clauses. Marketing is often seen by Procurement as the art department. They are perceived as the ones with all the creativity and brand awareness, but without the knowledge on how to buy what they do, better. And instead of fluttering around with an Excel spread sheet, they are swanning about with presentations covered in pretty pictures. Sadly, some minds cannot be changed. It is true however, that Procurement can offer a whole lot more to Marketing than is often thought. The thing is that it is not all about cost saving! Discovering time efficiencies is just as valuable as getting an agency to cut its costs, and sometimes even more so. Marketers often do not have the time to ask their agencies the questions which are engrained in a Procurement professional’s mind: What are your costs made up of? Who is doing this work? How long will it take each person to complete a stage in this job? Can you do it quicker? Can you use a different level of resource? Often, the only instruction from Marketing is: “This is my brief; this is my budget; please do it for me.” – an instruction which would send an ice cold sting down the spine of Procurement. The relationship between the two departments is tough – they often do not speak the same language. The solution? Listen! It’s all good and well for Procurement to enter a room and make changes to the way the Marketing budget is being spent, but without knowing the exact objective of the Marketing department, what good is it all going to do if they don’t somehow strive towards the same end objective? Some tips for the Procurement professional: – Rule no.1: If you want to influence your stakeholders, you need to listen to them! No good working on a cost savings initiative without having your customers on board. – Ask for a clear description of the final objective of your stakeholder, and together come up with a plan on how you can both achieve it, as a team. – Suppliers are a great source of information, advice and ideas. If they are willing to work with your organisation, they will be willing to partake in your mission. – If you are stuck on something you don’t understand, ask for help. It’s pretty simple. There are experts in all areas, you just need to ask them. You might be surprised at the reaction you will get. – You may not be creative in the Marketing department, but you can be creative in your strategic thinking. Don’t be embarrassed about your ideas. No idea is...

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