Last week in my blog Marketing Procurement Challenges, I talked about some of the sourcing effectiveness challenges, marketing and procurement folks face when it comes to marketing buys. I looked at how lack of knowledge intrinsically led to a less than effective procurement process.
In this blog, the 2nd in the series highlights the challenges; I will touch upon an area that is a problem of plenty – Sourcing.
On the face of it, sourcing is not exactly a challenge that most marketing folks face. Supply outstrips the demand when it comes to marketing services. There are more agency vendors out there actively pounding the streets, working the phones and making pitches than active marketing projects at the time when they are doing this. And therein lies the problem.
Anyone who has been doing marketing buys whether as a marketing manager or a procurement manager, usually fields no less than 5-10 calls from potential agency vendors on a given week. Depending on the size and breadth of spend, this can go up higher. So you could have a digital agency to a printer to an event management agency to a social media agency clamoring to meet up with you to present their credentials.
And being nice people, you possibly end up meeting several of them, love their credentials and promise to keep them in mind the next time you have a suitable marketing project. You take their cards and their presentation. Within a week, the card is lost somewhere beneath the depths of your work and the mail that carried the presentation is lost under the deluge of email that you receive every day.
And when the fine day comes where you actually need the right agency, you discover that you really don’t have any. And potentially end up working with a possibly sub-par marketing vendor or a marketing vendor you quickly hire.
That’s how the typical marketing sourcing happens and how the average agency business guy gets the business. Being at the right place at the right time is not exactly the best sourcing or sales method to follow.
Creating an effective sourcing approach
To be really effective in marketing buys requires a comprehensive sourcing strategy that is in sync with your marketing requirements.
- Determine what your organizational marketing requirements are. With the plethora of marketing requirements, procurement teams are likely to find the requirement to be fairly wide. The larger the marketing budget, the more likely marketing teams would be using several different marketing approaches to meet brand requirements. Understanding the width of requirement is the first step in a creating an effective sourcing approach.
- Determine historical marketing spends across each different marketing project requirements- media, outdoor, retail, digital, social media, printing etc. Tools like SpendWyze that Agencyonnet has, that helps analyse marketing spends by project type can save hours if not days in collating this information from excel files.
- Determine your key spend areas using the data. This will let you know where you need to ensure that you have the requisite key marketing vendors in place. Look at spends by geography, especially if your marketing is national. Most marketing vendors, despite all their claims do not have multi branch fully staffed operations beyond a couple of cities. Having local marketing vendors zone wise would go a long way in helping reduce marketing costs.
- Collate the existing marketing vendor base that most marketing folks have. In case you already have a Vendor ERP system in place, this data can be pulled out easily. Nevertheless supplement the data points with additional vendors. Segregate the vendor basis their skills sets into the spends buckets to determine whether there are adequate marketing vendors in each bucket.
- You will now have a matrix of spends, skills sets and vendor population basis which you can work towards developing a sourcing approach to fill in the blanks or under-represented spend buckets. Supplier platforms like Agencyonnet can help here.
Determining the optimal marketing vendor mix
How many marketing vendors should you have within a bucket of marketing spends? Leaving aside the strategic marketing spends made in areas like TV or print media buys where one usually has a minimum of 2 media buying agencies, in most other marketing spend buckets it is critical important from a procurement perspective to have multiple marketing vendors.
Having multiple vendors ensure a higher degree of cost effectiveness, lower complacency, better vendor innovations and above all much higher account management. Where would the Indian consumers be if the telecom sector had been left only to a 1-2 players? Having a competitive mix of marketing vendors, help drive better procurement and delivery efficiencies.
In my opinion, the most optimal mix would be to have at least 4-5 different marketing vendors within a spend bucket for the long tail marketing spend. More than that would be administratively difficult to manage and less than that would lead to lower buying efficiencies. Leveraging marketing procurement tools like Agencyonnet can help manage the administrative and buying processes more effectively.
Sourcing and selecting the right marketing vendor
There are various places to source the right marketing vendor. The best place to start is internal- with the marketing folks. The 2nd best place is your vendors themselves. Being in the industry, they know who their key competitors are. Another great place to hunt for the right marketing vendor is your competition. Who are they working with? You may or may not chose to have the same marketing vendor, especially if the work that you intend to outsource is confidential and critical to your success. Platforms like Google, LinkedIn and any of the agency directories that you can find online are also a good source.
However, a critical aspect to be borne in mind is evaluating the supplier and determining whether he is the right one for you or not. A curated list, or at least a rating helps in screening out the first level of marketing vendors that do not make the cut.
In case you’re using Agencyonnet as your procurement platform, it comes pre-equipped with a sourcing platform for marketing vendors with clear ratings that help you do the first level screening of deciding whether to empanel a vendor or not.
In conclusion, creating and implementing an effective sourcing process can go a long way in helping you stretch that marketing budget by at least 15-20%. Now who wouldn’t want more money to spend!!
About the author
Rajesh Menon is the CEO of Agencyonnet, a B2B SaaS marketing procurement platform that helps organizations automate their marketing buys and eliminates process in-efficiencies in procurement. He has been both a marketing buyer and seller for the past 25 years He is available on LinkedIn and on Twitter at @aon_menon for advice and consulting on marketing procurement processes.