Marketing Procurement Isn’t a Luxury Anymore

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AlixPartners speeds ahead of the marketing value creation curve by closing a long-neglected gap

Conventional wisdom has long held that healthy marketing budgets are critical for retailers and consumer brands to drive sales, revenue, and brand desirability. As such, CMOs tend to avoid bringing their procurement teams into the mix for fear of disruption — but this strategy is no longer an option in today’s inflationary times.

Rather, marketing procurement has never been more essential, and the pressure is on for these teams to become more strategic, tech savvy, data-driven, and agile. Global management consulting firm AlixPartners is changing the way companies think about marketing value creation by leveraging innovative procurement methods and a roster of leading industry partners that look at marketing holistically, driving both bottom- and top-line improvements.

Libra Balian, Senior Vice President of Procurement Transformation

“At AlixPartners, we like to surpass the expectations of our clients by implementing a unique mix of levers that drive marketing efficiency, productivity, and effectiveness,” Libra Balian, one of the firm’s senior vice presidents of procurement transformation, told BOSS. Prior to joining AlixPartners, Balian directed global marketing procurement at Tiffany & Co, where she was able to create millions in marketing value while still maintaining the brand’s luxury presence.

To boost media efficiency, companies must revamp their approach by placing procurement teams in the driver’s seat. This is a major change, as traditionally, procurement teams have not had a seat at the table. “We help our clients understand the nuances of media buying and educate them on how to drive efficiencies throughout the complex media ecosystem,” Balian said.

For instance, companies may not be aware that their programmatic media buys contain a substantial percentage of AI-bot-created “made for advertising” websites that solely attract ad revenue by offering low CPMs. AlixPartners puts in place contractual language with media partners that protects clients from buying media that does not meet viewability or brand safety standards.

Leading marketing financial compliance auditing firm Media Marketing Compliance delivers significant efficiencies through its media and non-media contract compliance audits. These audits enable advertisers to maximize the value of their marketing investments, improve operational effectiveness, and ultimately strengthen relationships with their agency partners.

Amidst the myriad of challenges facing advertisers today, from the complex media supply chain, ad fraud, brand safety concerns, agency funneling of proprietary non-disclosed media, to the simple poor management of advertisers’ marketing budgets, an agency contract compliance audit is an essential tool for ensuring transparency, accountability, and financial integrity in the advertising ecosystem. Media Marketing Compliance’s senior auditors, who come from the agency finance world, analyze financial transactions, assess agency adherence to negotiated terms, and identify billing discrepancies and non-compliant agency behavior all without impacting the client-agency relationship. Advertisers can then recover most, if not all, of the audit findings back into their business, ensuring they are only paying for the services agreed upon in writing. This leads to substantial savings as well as significant value add through the operational and contractual enhancements, fostering a culture of excellence and continuous improvement across both organizations.

As advertisers navigate this increasingly complex media and marketing landscape, the benefits of a marketing agency contract compliance audit extend far beyond mere financial scrutiny. The imperative for agency transparency and accountability has never been more pronounced. Embracing the rigors of compliance auditing is not just prudent business practice — it is paramount to a commitment to excellence and integrity in the advertiser–agency contractual partnership.

Content production provides another immense opportunity to drive marketing efficiency. CMOs are challenged to create more creative assets than ever to fulfill omnichannel marketing plans. Financial management in content production is typically a black hole, driven more by budget approval than a strategic cost lens. Companies often fail to examine their estimates on a line-item basis, preventing visibility to negotiate lower costs.

Innovative production spend management & analysis software Decideware offers unprecedented visibility into photo and video shoot expense tracking. Decideware’s Production Manager module offers a sophisticated tool for advertisers to better scope, approve, track, and analyze production spend. With a focus on granular tracking and approval mechanisms, Production Manager enables advertisers and their procurement teams to effectively oversee spend across diverse brands, business units, and regions. This capability ensures a strategic, comprehensive view of expenditures, facilitating enhanced negotiations and partnerships with creative agencies.

Clients leveraging Decideware’s industry-leading tools experienced up to 18% year-over-year cost optimization in agency fees and production spend. By leveraging real-time data and tailored dashboards, procurement professionals can ensure budget allocations for content production are both strategic and efficient.

“The detailed data captured by this software allows for visibility into line-item pricing, to ensure it stays within approved guidelines,” Balian said. “Procurement can dissect this rich data and use volume leverage to improve staffing and deliverable rate sheets.”

Procurement teams typically do not focus on marketing productivity improvements, yet these can provide rich opportunities for cost reduction. Balian, who managed creative studio operations in her former roles, helps clients to identify which marketing activities can be reimagined to maximize output while minimizing resources and time to market.

As an example, AlixPartners coaches their clients’ creative operations leads on how to effectively incorporate AI into their process workflows — from generating production-ready, on-brand imagery to developing copy with the right brand tone. “The typical content production life cycle takes weeks and months, but with the use of generative AI tools, it now takes weeks or days, and for half the cost,” Balian said. “AI is truly transformative for in-house creative teams and partner agencies.”

Storyteq, a global leader in creative and workflow automation, is at the forefront of innovation with its revolutionary BrandCore engine, setting the standard for secure and usable AI in the industry. This advanced model is designed to learn from user interactions and brand guidelines, facilitating the delivery of brand-compliant marketing assets at an unprecedented pace and scale.

Building upon its renowned Creative Automation technology, Storyteq continues to drive significant production efficiencies by automating repetitive manual tasks traditionally handled by creatives and designers. Through the utilization of dynamic templates, Storyteq enables the rapid creation of marketing assets across various channels and markets, spanning from premium video content to digital and print materials. With the ability to effortlessly swap out key elements such as languages, logos, pricing, and imagery, Storyteq empowers users to generate thousands of assets within minutes, revolutionizing the content creation process.

The introduction of the BrandCore engine comes at a pivotal moment, as brands and agencies navigate the increasing marketing execution gap --a discrepancy between content production capabilities and consumer demand. Traditional methods of resource allocation are no longer sufficient or financially viable in today's ever-evolving economic landscape.

Ken Madsen

Ken Madsen, Chief Marketing Technologist at the Inspired Thinking Group, underscores the significance of Creative Automation in bridging this gap. He emphasizes that Creative Automation has transitioned from a mere "nice-to-have" option to an essential tool for brands seeking to scale production without expanding budgets or resources. This technological shift has become even more pronounced in light of the pandemic, highlighting the critical need for efficient content creation methodologies.

However, Creative Automation goes beyond boosting quantity; it is about delivering better, more relevant content across all channels. By streamlining manual tasks, Creative Automation liberates creatives to focus on brand storytelling, fostering meaningful engagement and driving revenue. This strategic utilization of technology not only enhances operational efficiencies but also unleashes human creativity to its fullest potential, empowering brands to thrive in a rapidly evolving digital landscape.

Storyteq's innovative approach to Creative Automation, coupled with its groundbreaking BrandCore engine, represents a paradigm shift in the industry. By embracing AI-driven solutions, brands can navigate the complexities of content creation with agility, precision, and unparalleled effectiveness, positioning themselves for sustained success in today's dynamic marketplace.

Marketing effectiveness has not historically been in the procurement purview, but AlixPartners focuses its efforts to change that, evaluating clients’ media tactics to ensure they are driving tangible results. Using direct mail as an example, procurement teams can spearhead a data-driven assessment of whether these mailers are effective in the first place. AlixPartners’ digital experts perform incrementality analysis and A/B testing on direct mail campaigns to determine the incremental impact in driving a specific outcome — i.e. sales, leads, or store visits — as compared to a control group. Ultimately, this analysis determines the true value generated by a campaign.

From a digital media perspective, clients and agencies typically focus on hitting predetermined targets and performance averages rather than minimizing marketing “waste.” AlixPartners advises clients on processes and capabilities to conduct regular tail-spend audits on digital media investments, which has helped to reduce unprofitable spend by 15-25%.

Procurement can aid marketing effectiveness at an umbrella level by bridging the gap with finance teams to analyze the top-line improvements driven by marketing spend. Clients typically plan spend and revenue by business lines and verticals, limiting their potential to optimize. By taking a portfolio approach and investing on the incremental ROI driven from a profitability and customer perspective, AlixPartners’ clients have increased media effectiveness by 10-15%. These efforts free up unproductive spend to reinvest in areas that can drive awareness and growth, ultimately creating a more effective marketing organization as a whole.

No matter where a company sits on its journey to maximize marketing value, utilizing the above procurement-driven tactics and partnering with proven industry-leading third parties can help to improve and optimize marketing value creation. For those without the internal category expertise, firms like AlixPartners can help you fill in the gaps and augment your own procurement efforts to reap both bottom- and top-line rewards.