Europe's biggest firms failing to check ROI on 73 per cent of marketing spend

Will Green is news editor of Supply Management
3 June 2014

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4 June 2014 | Will Green

A survey of Europe’s largest companies has found 73 per cent of marketing spend goes unmeasured against return on investment (ROI) by the procurement function.

The survey of 200 large firms, by Charterhouse, found an average of €124 million (£101 million) of marketing spend went unchecked.

On average, just a quarter of marketing spend is measured in terms of ROI by procurement departments and more than half of buyers reported a “pattern of marketing departments getting excited about new platforms, only to be disappointed by their commercial results”.

However, of those that do measure ROI, almost nine in 10 procurement professionals “claim they can calculate the precise business impact of marketing activity”.

At the same time, almost two-thirds of buyers reported there was no longer a disconnection between marketing and procurement.

David Fincham, business development director at Charterhouse, said: “The disconnection between marketing and procurement is fast becoming a myth. We’re actually seeing marketing departments actively seek help from procurement to measure the outcomes of their activities, while encouraging procurement’s involvement in projects from the outset.

“This collaboration is absolutely essential for procurement professionals to understand the kind of measurements their marketing colleagues will appreciate. Best practice in this area will enable effective strategy throughout the supply chain and ultimately maximise the impact of investment.”

According to the study there are “significant costs” associated with a lack of investment in measurement of ROI. The marketing channels that have been attracting the most investment, such as social media and online display advertising, carry the most risk in terms of ROI, with nearly half of procurement professionals (46 per cent) referring to social media as an “over-hyped” platform. 

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