The benefits of competitive benchmarking in transforming marketing procurement costs and strategic planning
There are immense benefits to competitive benchmarking. It can be used to transform the challenges, complexities and negative practices within marketing and procurement that have affected these functions in the past. It can also help effect real change in how marketing procurement operates by providing visibility and transparency to the marketing procurement process.
Competitive benchmarking is defined as: transparency and clarity around marketing costs using information, rate data, and analyses to provide a clear yardstick on costs and visibility into pricing, scope of work and performance. It is an invaluable tool that allows for marketing procurement teams to gain richer control over their budgets by using data that helps them to make the right decisions based on measurable value.
Back in 2018, a collaborative initiative called Project Spring was launched to address transparencies in marketing procurement and to change the ways in which procurement engaged with companies, stakeholders and spend. The initiative set out to change the ‘race to the bottom’, the cutting of costs and fees that is not adding any value to campaigns and spending. Project Spring also highlighted the value of competitive benchmarking.
The value of scale
External benchmarking, that takes data from multiple agencies, campaigns, competitors and jurisdictions offers unparalleled insight into shifting trends, costs, and brand activities. Often, internal benchmarking data – data that’s gathered by marketing procurement teams – doesn’t have the richness of data, as it’s not inclusive of the global market, is limited in its scale, is outdated, and is based only on rate card information, all of which makes it an unreliable way of assessing how well a scope of work is doing against true global standards. Internal benchmarking is also often limited to one industry sector so it’s a tight band of insights which can be a lot like seeing the trees and not the forest.
When you can take anonymised data from a wide range of industries, that analyses multiple touchpoints, and uses a variety of metrics, then you gain a far clearer picture of the landscape and where your brand sits within it. Using real-world industry data that has global reach and is based on actually negotiated rates you can determine how you compare with other brands, how your campaigns and procurement strategies match up and, how you can improve spend and strategy to save money and improve performance.
The depth of the data
With access to a rich repository of data and benchmarking information you can not only refine your spend and campaign planning, but you can see if you’re paying a premium because of where your brand sits within the spectrum. Often luxury brands, financial services and gambling companies are charged more, so having the details of why and where these costs are elevated can help you pose the right questions to your agencies to understand the value you are receiving for the premium. Knowledge empowers marketing and procurement to make informed decisions about what value they want to get from the marketing budget.
For example, a financial services brand can use benchmarking to see what the average fee is for their project and determine if they are comfortable paying the variance. It’s a fast and reliable way of gaining tighter control over costs and campaigns.
The benefits of competitive benchmarking
Marketing benefits from competitive benchmarking because it allows for marketing teams to change how they engage with their agencies and how they measure the value being delivered. It also provides key performance indicators (KPIs) that can help refine the scope of work, assess its performance more effectively, and ensure campaigns are delivering to expectations. Benchmarking can also be used to customise campaigns in real time – making micro-adjustments throughout the agency relationship lifecycle to ensure it meets strategic goals.
Procurement benefits from competitive benchmarking as it puts all the scope of works and pricing data in one place and allows tracking and monitoring of campaigns, agencies and markets against these costs. Using accurate data that’s been carefully tracked and mapped across the right data points and the right metrics, provides the insights to drive confident negotiations, clarity in requirements and promotes realistic expectations. It also helps to build a strong relationship foundation that encourages greater accountability.
Finance benefits from competitive benchmarking because it ensures that the business isn’t spending more on marketing than it should. Using accurate and up-to-date information to assess costs and expenditure against a global market will ensure you’re not spending more than others in the same market. Competitive benchmarking is invaluable when applied to campaigns run across multiple jurisdictions and countries as it provides region-specific insights that ensures visibility and cost-accuracy. It also eliminates the risk of the ‘race to the bottom’ where cost cutting and savings are prioritised over quality and value.
Fortunately, Competitive Benchmarking is easy.
Customer success through competitive benchmarking data is as easy as clicking the mouse. Thanks to intelligent technology and access to vast quantities of data, you can tap into an extraordinary database of benchmarking information on demand. RightSpend’s competitive benchmarking capabilities are defined by visibility and transparency and hand you the digital tools you need to truly thrive.