The recession has resulted in many marketing managers facing cuts in their budgets and/or headcounts.

In this white paper, Chris Hopwood, Managing Director of Marketingunity looks at the issue and how marketing Directors and managemers can minimise the impact on their level of marketing activity.

Traditionally, the success of Marketing has been measured almost exclusively by its effectiveness, i.e. the brand awareness and revenue it generates, rather than its efficiency, i.e. how well it utilises its budgets and resources. 

In recent years, a number of factors have radically and permanently changed that, including formal regulations, the widespread uptake of the Web as a business tool, and evolution of industry ‘best practice’. The recession has only served to increase and accelerate this need, as Managing and Finance Directors scrutinise all areas of their business for ways to cut costs. This includes Marketing, which maybe for the first time, is having to look for ways to both maximise its efficiency, and demonstrate it to the rest of the business. 

This can be a real challenge, because unlike other departments, Marketing departments have not historically installed software applications that support efficiency, and in fact most marketing teams still rely exclusively on spreadsheets. As a result, measuring and reporting on efficiency creates an administrative overhead, that ironically, itself reduces efficiency, because a single management summary report may require data from dozens of separate spreadsheets, creating a mammoth task. 

Marketing inefficiency – problem or opportunity?

The problem is significant enough to have attracted the interest of industry observers and analysts, such as a study by analyst firm Gartner which concluded, "there is substantial waste in most marketing departments with approximately 25 per cent of the marketing budget spent on producing and managing marketing programs rather than on the actual promotions/campaigns”.1 

The lost money represented by that percentage is significant, given that many corporate marketing budgets run to millions of pounds. However, the silver lining to this particular cloud is that if Marketing Directors can address the problem, they can deliver equally significant cost savings to the business, whilst not only avoiding cuts in marketing activity, but maybe even increasing it. 

So how can they achieve that win/win outcome? As noted above, the problem is caused by a historical lack of emphasis on efficiency, and a resultant lack of systems to support it. The recession has made sure there is now no lack of emphasis, so is the answer simply to install software that supports marketing efficiency? 

Gartner thinks so, stating that MRM “…can save more than 15% of an enterprise's marketing budget”. They go on to say that “…saving money is just the start of improving marketing return on investment…” (Marketing Resource Management is an acronym coined by Gartner for software that manages marketing budgets, resources, activities and campaigns) 

1. “Establishing a Marketing Operations Office”, Gartner report, August 2008

What is MRM?

A number of vendors of MRM software have suggested definitions for the acronym in terms that suit their solution. However, they agree in broad terms that MRM software aims to optimise the efficient use of marketing budgets and headcounts. From a marketingunity perspective (and the clients we talk to) the ‘end result’ sought by those that implement MRM is always to maximize profits, with a number of benefits contributing to that, including :-

• Cost savings
• Time savings
• Reduced time to market
• Visibility/transparency (generally meaning the availability ‘on tap’ of comprehensive, timely and accurate information.)
• Management Control
• Efficient communication/collaboration across the entire marketing ‘team’.

In the case of the last point, the marketing team means not just the marketing department, but other internal departments such as Finance and Procurement, and the entire marketing value chain, including field staff, agencies and suppliers. In addition, a good MRM system will also span the whole marketing life-cycle, from ‘concept to consumer’. This means an online environment which can, amongst other things: -

• proactively plan and execute campaigns
• select and manage internal resources, agencies and suppliers
• manage workflows and approvals
• manage digital assets
• procure goods and services cost-effectively
• ensure timely fulfillment
• provide comprehensive management reporting

The result is reduced costs and administration overheads and faster time-to-market (and longer time-in-market) for campaigns, delivering maximum return on marketing investment.

Building marketing success: shareable, repeatable, accountable

As most MRM systems have been developed in the last few years, they have underlying architecture that supports the goals. All are Web-based, to allow 24-hour access from any geographical location, and underpinned by database technology, which manages and reports on marketing activity. 

Most also have configurable workflow mechanisms, which enables marketing management to tailor and implement ‘best practice’ processes which suit their own organisation. 

The result is a clear, well-documented process that is followed by the whole value chain, which not only achieves marketing effectiveness, but transparently demonstrates it to the rest of the business. 

MRM is being recognised as the new foundation for marketing best practice and the cornerstone of repeatable marketing success. Marketing functions worldwide are today implementing such systems to deliver maximum value to their organisations and gain a competitive edge. MRM has been conceived as a pragmatic solution that works in the ‘real world’ and starts delivering benefits immediately, so it can be easily implemented for a specific campaign or across an entire marketing programme. MRM is proving its value and, increasingly, is becoming a vital tool to help marketing teams prove theirs. 

MRM software, one of the functional classes encompassed in the marketingunity suite, is also available in a range of versions that can be implemented on customer sites, or in a SaaS (Software as a Solution) version, that avoids the need for the customer to buy systems or software, or wait for IT to support the project. 

SaaS has the additional benefit of being fast and easy to implement and use. As a result, Marketing Director and Managers can demonstrate rapid savings to their businesses. Which I believe is where we came in…..

Copyright Marketingunity 2009