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24 April 2012 | Anna Scott
Companies are significantly overspending on marketing and missing savings due to immature and ad hoc marketing procurement processes.
Over two-thirds (67 per cent) of senior procurement professionals surveyed by marketing services production company Charterhouse said such “maverick marketing” is rife.
The Marketing Maturity Matrix report suggested that the responding organisations – 200 of Europe’s largest companies by turnover – could be wasting a combined €716m (£582 million) annually.
Legacy marketing procurement processes were highlighted as a major reason for this inefficiency, with 34 per cent saying their processes have been developed ad hoc over time with no overarching strategy.
Consequently, 30 per cent fail to evaluate long-term value and savings from external marketing providers. More than a third (36 per cent) currently have no mechanism for measuring return on marketing investment.
In all, 80 per cent said they struggled with immature marketing procurement processes.
“Without a proactive marketing procurement strategy, it’s easy for marketing budget to be committed without procurement involved,” said David Fincham, business development director at Charterhouse and previously purchasing manager at Renault UK.
“Those inheriting legacy processes should start building relationships with marketing immediately and work together to develop a strategy that identifies potential improvements.”
However, just 21 per cent of senior procurement professionals surveyed hold ultimate responsibility for marketing and 58 per cent have no remit at all for marketing, meaning procurement’s role in achieving marketing savings is difficult. More than one-third (35 per cent) said their marketing department is resistant to procurement’s oversight of its purchasing activities.
“Tension still exists between marketing and procurement and common misconceptions about their respective objectives remain,” Fincham added. “But this is no longer about seeking savings in spite of consequences – both parties demand best value and there are joint benefits to be had.”