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11 June 2014 | Will Green
Marketing buyers were told at a conference that focusing on input costs had “been their downfall for years”.
Daniel Jeffries, of Jeffries Consulting, told ProcureCon Marketing in London that measuring input costs was “navel-gazing” and it was better to pay agencies on what they delivered.
“I say you begin as an advocate for marketing. If you do that well, you will build trust with your CMO,” he said.
“Price is what you pay, value is what you get. When it’s spent well it [marketing spend] can improve business performance. If we can, measuring outcomes is our goal. If you measure input costs, it’s navel-gazing. The focus on input costs has been our downfall for years.”
Jeffries said procurement’s emphasis on rate cards led to scenarios where marketing agencies produced “split rate cards” including a number of people, only for the lowest cost person to be used on a client’s account, and job title switches where account executives became account managers.
“If we focus on input costs then the agencies will too,” he said. “Pay them based on their promises. Find out what success looks like and pay them for it. Stop paying your agencies just to turn up.”