marketing and procurement colleagues discussing marketing spend management

Benchmarking Marketing Spend: The Importance of Marketing Spend Management

Effective marketing spend management is a critical component of success. Businesses must optimise their marketing investments to maximise their returns, and benchmarking marketing spend plays a pivotal role. 

By comparing your marketing spend against accurate global benchmarking data, you can identify areas for improvement, uncover cost-saving opportunities, and unlock new avenues for growth.

Benchmarking Marketing Spend: A Catalyst for Efficiency and Effectiveness

Benchmarking is the process of measuring your marketing spend against the global industry averages. Comparison allows you to gauge your marketing spend’s performance relative to your competitors, regional & global market averages, and your own agency roster. Doing so gives you valuable insights into areas where you may be overspending or underspending, enabling you to make informed decisions and course-correct as needed.

Effective benchmarking helps you identify inefficiencies and highlights opportunities for optimisation. By understanding where your marketing spend is underperforming or overperforming, you can reallocate your budget more strategically, ensuring that every dollar invested delivers maximum impact.

Key Metrics and KPIs for Benchmarking Marketing Spend

To effectively benchmark your marketing spend, it is crucial to identify and track the right metrics and KPIs. While specific measures may vary across industries and business goals, here are some key areas to consider:

  1. Agency Performance: How are your agencies performing for you? Compare internally to see which of your agencies are delivering and which are falling short. Compare them against the global averages to see how they stack up in the bigger picture.
  2. Staffing Costs: How much of your budget is for the agency team, and in what proportions? Understanding and measuring who is working on your project, how much time they spent, and the cost is essential. Measuring this information against benchmarks can help you see where you may be paying more than you need and can weigh your staffing plan accordingly.
  3. Deliverable Costs: When you can clearly see what each deliverable or asset should cost, it helps to minimise wastage, plan for more efficient spending, and maximise your marketing output.
  4. Return on Marketing Investment (ROMI): ROMI measures the revenue generated for every dollar spent on marketing activities. This metric is essential for evaluating the overall effectiveness of your marketing spend and ensuring that your campaigns are delivering a positive return on investment. Your agency and deliverable costs form part of this calculation, so they should not be overlooked.

Implementing Benchmarking into Your Marketing Spend Management

Implementing benchmarking into your marketing spend management process is a game-changer, setting you up for success. 

RightSpend provides a marketing procurement platform that enables you to benchmark your marketing spending efficiently — assessing +$10 billion in marketing spend, across 75 global markets, and thousands of data points, for reliable benchmarking. Using negotiated rates, not published rate cards, RightSpend’s data provides a unique real-world perspective on benchmarking marketing spend. 

Using this data to analyse your marketing spend ensures you can visually identify trends, patterns, and opportunities for improvement. It also enables you to prioritise where to maximise your marketing spend quickly and efficiently. 

Benchmarking marketing spend is not something that you should do just once. It’s an ongoing process of monitoring and tracking spending, reallocating marketing spending where it can deliver the best returns—be that with high-performing agencies, impactful campaigns, or, of course, through savings and efficiency. 

It’s an ongoing process, a continual evaluation and refinement of your marketing spend and strategies, which means you need the right tools to ensure that it can become part of your procurement process. 

Benchmarking Marketing Spend: Demonstrating Impact

Ultimately, benchmarking’s true value lies in its ability to improve the return on marketing investment (ROMI). By optimising marketing efforts and allocating resources more effectively, you can maximise the impact of every dollar invested.

That’s where RightSpend delivers – providing you with the reports needed to demonstrate the impact of your marketing spend management to stakeholders. On average, RightSpend clients save ~20%, which can be delivered back as savings, redeployed into new campaigns or allocated to new experimentation. 

CASE STUDY: This FMCG client used RightSpend’s benchmarking data to identify 16% in savings 

Book a call with the team today to find out how RightSpend can help you maximise your marketing spend.