Marketing not just effective but efficient, Booz & Company (page 2 of 2)

Becoming more rigorous about marketing sourcing can also generate savings of at least 15-20%- the budget increase that CMOs require. Five recommendations can help toward more efficient and effective marketing:

1. Know your spend

CMOs must analyze marketing spend up and down the supply chain for greater transparency. Transparency allows sound decision making with respect to both ROI and sourcing. Knowledge about where and how money is being spent can provide insights into whether expenditures are consistent with overall marketing goals.

2. Measure your effectiveness

"CMOs must put in place a capability for measuring the effectiveness of those things that can be measured, and supporting these with enablers," commented Sabbagh. The pay for performance contract - what gets spent depends on what gets achieved, is another route to more predictable ROI. All these enablers make it easier to do midcourse corrections and allow the CMO to divert 10-15% of marketing budget to other initiatives.

3. Leverage centres of excellence

Decentralisation around marketing is inevitable in some companies. Even those that work with decentralisation should implement methods for sharing best practices about ROI, sourcing, and cost management. Centres of excellence enable managers to share what they've learned, and can help in solidifying practices across the organisation.

4. Manage your efficiency

The operating aspect of spend is often driven by the creative process and managed through relationships. Decision making is fragmented and incentives to manage costs are limited, resulting in controlled chaos. By instilling discipline through structure and scale, CMOs free their marketers to focus on marketing. "There are two ways to build an enhanced sourcing capability; either internally or by partnering with procurement. With a 15-20% savings opportunity, no CMO can afford to overlook this," said Chahine.

5. Adopt the new blueprint with an eye to success

CMOs can benefit from becoming more efficient; the key is to finding a place in the organisation where the new effectiveness and efficiency will produce a result that is positive and tangible. Handled badly, a pilot project can destroy the organisation's momentum and enthusiasm for change. Handled well, the pilot can give the blueprint and its CMO the impetus needed for bigger change tomorrow.