3 Innovative Ways Marketers Are Stretching Their Budgets During Tough Times
By: John Wallace December 8th, 2022 8 minute reading
“Nobody told me there’d be days like these.” – John Lennon
So much has happened these past few years. With all the geo-political, societal, economic, and environmental turmoil, one simple truth remains: change is inevitable. But it’s the rate of change these days that can be jarring, especially for marketers and advertisers who are expected to navigate an ever-challenging marketing landscape armed with smaller budgets, fewer resources, and higher expectations.
A recent “State of Marketing” report from Salesforce Research surveyed 6,000 marketing leaders around the world to discover how marketers are focusing their efforts to meet the moment. What they found was that “marketers and businesses are leading with values, while embracing innovation. They’re prioritizing driving as much value as possible from existing tools and technologies, while focusing new investments in key areas like automation and productivity.”
If you are a marketer or advertiser faced with budget cuts and pressure to prove ROI amid uncertainty but don't know exactly how to do it or where to start... you're not alone. But you are also in luck, as we’ve identified three key areas where marketers and advertisers are having success.
1. Ensure your production budgets are competitively bid
There is so much emphasis put on trimming media spending during market downturns that sometimes that’s as far as marketers go. But there are other areas worth taking a closer look. Marketing production, for example, typically the second largest marketing expense outside a company’s media spend (and typically the least transparent), is one such overlooked category. Whether a video ad that is being created to promote your brand or an in-person event that is going to connect with your audience, the best way to realize the most value out of your production spending is to ensure that you and/or your agency are following a triple bid policy, if not for every project, then for at least the top half of projects based on budget size.
Why is this considered a best practice? Well, simply put, research suggests a savings of up to nearly 30% when projects are competitively bid. According to a study published in Journal of Construction Engineering and Management, competitive three-party bidding leads to an 8% reduction in the “bid low price.” This cost reduction increases as the number of participating bidders increases, providing the type of savings that extends the runway for keeping on track to hit your goals.
Most people understand that bidding a job out results in more competitive pricing and more value, and although marketing bidding is not the same as construction bidding, the same principle applies. Where some marketers fall short is only employing this policy on a handful of projects. They’ll often have rules that dictate that anything over a certain amount should be triple bid. However, they lack the ability to monitor, measure, or scale the process across the organization and all the different categories that could benefit, thus missing out on massive amounts of potential savings.
With a little bit of discipline and access to the right tools, the ROI can stack up. I recently spoke with a marketing executive who wants all fabrication for his experiential campaigns to be triple bid. He knows he can save at least 15% every time. But with his lack of any kind of system to automate and simplify the process, he’s only able to bid approximately $2 million worth of that spend every year. But he still spends $15 million. If he could scale the bidding process to capture the entire $15 million, he knows he could realize almost an additional $2 million in savings that could go straight to the bottom line or be reinvested in working media.
Thankfully, there are procurement systems and platforms out there that can assist with this endeavor (Octerra is a good one!). Adopting the right processes and tech to provide the required level of transparency to enforce and manage this type of policy is critical, especially when every dollar counts. By way of another example, we had a client once who had a triple bid policy in place but found through an audit that 85% of their productions had single-bid exemptions and weren’t being triple bid despite the mandate. Once they started using the Octerra platform, those exceptions were drastically reduced, and the client was able to save both time and money.
2. Invest in automated bidding tools to foster collaboration amongst team members
There is no question that the way we work has also felt a seismic shift in the past couple years. More employees have the freedom today to work remotely while their companies operate in a decentralized fashion. Without collaboration tools that can keep teams connected and the flow of information readily available for all facets of the job, everyone remains at a disadvantage. The same Salesforce study mentioned above reveals that distributed teams are uniting with collaboration technology “recognizing that remote and distributed work is here to stay, [and] leaders are making investments in how marketing teams collaborate.”
Again, there are many tools available to assist in this task. But which ones are worth investing in? The answer depends on the scope of the task. Slack is an excellent communication tool for internal teams. CRM platforms like Salesforce or HubSpot are good for customer-centric conversations. And those are widely adopted technologies that have improved communication and connectivity. Still, most marketing purchasing is done through email and spreadsheets, an antiquated and offline process that hasn’t evolved since the ‘90s. Sure, it’s a comfortable process but the activity and information ends up siloed in email inboxes with little to no transparency or accessibility.
Furthermore, it's manual with a lot of back and forth resulting in loss of momentum, speed, and productivity.
If you are still managing your bidding processes manually through email and spreadsheets, then it is time to re-evaluate the reasons for continuing to do things this way. We have seen customers of Octerra realize up to 20% greater resource effectiveness simply by collaborating in a more efficient and modern way. Let software take care of the busy work where possible and give your team back the time and freedom to spend their efforts more strategically. They'll thank you for it!
3. Measure and analyze the effectiveness of your marketing spend
Salesforce’s “State of Marketing” report indicates that marketers have adopted real-time intelligence by “tracking more metrics year over year than ever before. Speed to insight remains a competitive advantage, with 72% of high-performing marketers able to analyze marketing performance in real time.”
As I mentioned earlier, most marketers have a pretty good handle on their media spend, which is typically a marketer’s largest spend and as such receives the most scrutiny. But production spending has always been more opaque (especially for those brands who employ an agency to manage this spend). It's siloed at various agencies inside the email inboxes of individual producers and managers who may or may not still be employed with the agency. Without a central repository or system of record for this data marketers are left in the dark and the likelihood for conflict of interest and erosion of trust increases, not to mention the ability to derive actionable insights becomes nearly impossible.
I was speaking with an agency recently, and they were telling me about how they store their information on a server in the basement. No joke! Behavior like this results in high costs and, at the very least, poor or uninformed decision making. For many marketers it gets even more complicated when you multiply that out across different brands with each brand using different agencies. The bottom-line result is that all of this disparate, siloed information (which has such high value to both the agency and brand marketer) becomes inaccessible. And the time and effort required to extract it leaves marketers at a severe disadvantage.
. . .
So, what if there was a way to access and capture all your spending information in real-time in a single place across brand, agency, and region, while scaling the bidding process to unlock massive savings and efficiencies for every stakeholder? It would sound almost too good to be true. But that's where Octerra comes in. As a procurement platform designed specifically for marketing production, it scales procurement efforts across both brand and agency to allow you to do more with less. Octerra provides that 360-degree visibility into the pass-through spend that naturally helps to enforce a fair and transparent bidding process, giving all vendors equal benefits. It centralizes and secures all the data associated with this spending in the cloud so that you can make informed decisions faster, ultimately allowing you to optimize your production budget and ensure everything runs more smoothly.
By John Wallace
Production and technology provide the foundation for John's current role at Octerra. With 12+ years of experience as Head of Production at StudioNow and AOL, he has created video content alongside some of the world's top brands & agencies.
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