We’ve seen a recent trend of Fortune 1000 companies reducing their agencies by almost half to optimize spend and increase productivity within marketing. This has been a gradual, strategic consolidation effort to improve the effectiveness of their investments.
Although marketing budgets are experiencing significant cuts, it is critical to understand marketing is a complex—arguably THE most complex—spend category, and procurement must not treat it the same as other spend categories. As Jon Moeller, CFO of P&G explained about its consolidation efforts, “we are not looking for cuts, but to shape spend to increase efficiency and effectiveness.” This statement may beg repeating as 94% of procurement professionals continue to focus on cost-cutting metrics as the key measurement of success, according to an ANA survey. A cost-only focus may significantly reduce marketing ROI and deliver poor brand performance. To maximize the benefits of both departments’ strengths, marketing and procurement have to focus on ONE underlying theme: teamwork.