Every Marketing Procurement team know their agency costs need scrutiny, but most are unsure if what you are paying is actually fair.
Marketing spend is usually one of the largest and most opaque budget lines for any brand. Those new to the category will also quickly discover that it is one of the hardest to benchmark with confidence and accuracy.
At RightSpend, the question of “are we paying the right amount for the right output from our agencies?” comes up in every single call with a potential new client. And the answer we hear the most is usually “we are not entirely sure.”
So, why does this uncertainty exist, what is really standing in the way, and what does it looks like when brands get it right?
What does Marketing Procurement benchmarking actually mean?
Before we look at what goes wrong, let’s first address what good benchmarking actually is in the context of Marketing Procurement.
It’s not a vague sense-check.
It’s not a one-off exercise you run every three years before a contract renewal.
Marketing spend benchmarking is the detailed process of comparing your agency costs, fee structures, and deliverables rates against verified industry data, so that you are working with a credible, up-to-date point of reference for every agency relationship you manage.
Those teams doing it well, move their Marketing Procurement from a gut-feel to an evidence-led strategic approach. But, when it’s done poorly, or not at all, it leaves significant value (and budget) sitting on the table. Making it harder to build credibility with both your Marketing colleagues and your agency partners.
Are you working with the right data?
The most fundamental reason Marketing Procurement benchmarking fails is because of the data.
Most teams default to relying on one of two approaches, and to be honest, neither is adequate on its own.
The first approach is internal historical data.
You look at what you have paid your agencies last year, maybe over the last 3 years, and use that as your baseline. For some, this feels a sensible approach, but it isn’t.
Internal data is just an echo chamber: you are simply measuring yourself against yourself. There is no visibility into what comparable brands in your sector, region, or market are actually paying.
If you overpaid last year, that figure simply becomes next year’s benchmark. And when you consider that we see some brands overpaying, on average, upwards of 25% that adds up to a big number.
The second is publicly available rate cards and desk research – using AI tools to help.
The problem here is that rate cards reflect what agencies publish, not what brands have actually negotiated and paid.
And, the gap between a published rate and a signed contract rate can be significant.
Without real transactional data, you are working from an incomplete picture, and your benchmarks lack the credibility to drive meaningful change, be that savings or efficiencies.
The result of relying on either of these approaches is your benchmarks are built on assumption rather than fact.
When it comes to agency negotiations, assumptions put you on the back foot.
Why is Marketing so much harder to benchmark than other categories?
If you have come into Marketing Procurement from indirect categories like facilities, logistics, or IT, you will have noticed that marketing has layers of complexities and variables that can make benchmarking feel almost impossible, and that matters when it comes to pricing.
What are the variables?
Just some of the complexities you should consider:
- Deliverables – a television commercial, a social content campaign, and a brand identity project carry entirely different cost structures. Lumping them together produces meaningless averages.
- Geography and market – agency rates in London, New York, and Sao Paulo are not interchangeable. Regional talent costs, competitive agency markets, offshoring and local economic conditions all drive pricing in different directions.
- Agency type and scale – a global network agency and an independent boutique serve different needs and, therefore, command different fees. Comparing them without accounting for scale and specialization is misleading.
- Scope and resourcing – beneath every headline fee is a staffing mix, an overhead structure, and a profit margin. Without understanding these components, you cannot identify where value exists and where you are overpaying.
Without granular, multi-dimensional data that accounts for all of these variables, any benchmark you produce is a generalization. And generalizations, when challenged will not hold up.
The barriers that compound the problem
Even when better data exists internally, structural problems within most brands can make it hard to use effectively.
Marketing and Procurement often operate in parallel rather than collaborating. Marketing prioritizes creative quality and agency relationships. Procurement traditionally prioritizes cost and contractual compliance.
Whilst both are legitimate priorities, without a single source of truth and a consistent process, benchmarking quickly becomes fragmented. Different teams are using different data, with different objectives and KPIs, which can lead to different conclusions which actively contradict each other and don’t align to the common goal.
Then there is the absence of any standardized way to collect or compare data. Even where data is collected, it is often captured in an Excel spreadsheet, without a consistent framework. When it comes time to Marketing Procurement benchmarks you are often trying to compare apples and oranges. Building a reliable baseline from your own internal inconsistent data is almost impossible, and any conclusions you draw from it are easily challenged.
Finally, you also have to contend with the challenge of subjectivity in agency performance. Marketing teams, reasonably, place enormous weight on creative quality and relationships. An agency that delivers brilliant work and is easy to collaborate with can genuinely be worth a premium.
But without objective, data-backed benchmarks to sit alongside that qualitative view, it is very difficult to distinguish between an agency that is genuinely worth a premium and one that has simply never been challenged on its fees.
The answer is not to dismiss the qualitative view. It is to complement it with data that makes both sides of the conversation credible.
Why the old ways of benchmarking no longer work
Spreadsheets. Desk research. Periodic reviews every two or three years before a major pitch. These were the traditional tools of the job, and whilst they served a purpose when marketing spend was simpler, more localized, and slower to change, they just don’t cut it now.
Marketing budgets now span dozens of markets, hundreds of deliverable types, and agency rosters that include global networks, independent specialists, and production partners operating on entirely different commercial models. The complexity has outpaced the manual approach.
Brands getting their Marketing Procurement benchmarking right have invested in technology that does what no spreadsheet can: aggregate real-world transactional data across a wide range of agency types, markets, and deliverables and making that data accessible and actionable for both Marketing and Procurement in a consistent format.
That means investing in a platform, like RightSpend, that can provide granular cost breakdowns, including staffing, overheads, and profit margins, that enable a consistent and repeatable process across numerous markets and agency rosters. A solution that gives both Marketing and Procurement a shared view of the data, so that their decisions are being made from a factual common ground rather than competing sources.
What does good Marketing Procurement benchmarking enable?
The common misconception is that effective benchmarking is just about driving agency fees to the lowest possible point.
And it’s been damaging Marketing Procurement’s reputation for years, being seen as the cost-cutters, rather than enablers.
Cutting costs without understanding value doesn’t produce real savings. It generally produces worse work, weaker agency relationships, and a poor relationship between Procurement and Marketing.
What benchmarking can actually enable is informed, confident, negotiations.
If an agency is priced at 25% above benchmark, that does not automatically mean you push them down to the lowest possible number. It simply means you open the conversation. You start your negotiations from a position of knowledge rather than assumption.
Why does that premium exist?
Does the value justify the premium?
That shift from cost-cutter to strategic enabler matters enormously for the credibility of Marketing Procurement as a function.
Teams with access to the right data can demonstrate a measurable return on investment, build genuinely stronger agency partnerships based on transparency, and move Procurement into the future.
The data exists. The technology exists. The question is whether your brand has the processes and tools to make use of it.
And if you are new to Marketing Procurement and trying to figure out where to start, that question is exactly the right one to be asking.
