Control is campaign key, say marketing experts

Everywhere in the marketing services supply chain, companies are consumed by cost anxieties.

It is a consequence, in part, of an economic environment where cash is still king; but pressure to deliver is also increasing as the options for communicating through new media channels increase and marketing technologies improve. Now more than ever, marketers must demonstrate that their media buying strategies are producing high returns on minimal outlay, while also decreasing time to market.

Such was the conundrum posed at a roundtable event organised by Brand Management, at which experts from throughout the supply chain met to discuss the solutions that might alleviate this pressure. The opening topic concerned the role that technology might play in maximising the efficiency of marketing campaigns.

“We see most technology incorporating two key elements these days,” said Chris Hopwood, managing director of marketing applications provider Marketingunity. “One is a central repository where data, images, digital assets are held; and then access to that repository on a global basis using the internet as the communication mechanism for collecting and distributing the data in a timely way.”

In addition, he continued, procurement software tools mean that “people can identify opportunities actually to cut the costs of procurement”. Examples could include courier charges, proofing and other stages that add often hidden costs to the production process; as well as the finally procured product itself, where “multiple orders can be consolidated into a single order and thereby achieve an economy of scale”.

As John Dalziel, business development director at imaging solutions provider Schawk pointed out, however: “Technology is very much a means to an end rather than an end in itself.” Thus a company requires clear objectives to ensure that technology is doing a job, and that it is “not just putting technology in for technology’s sake”.

He also added that, where ‘efficiency’ or ‘cost reduction’ are simply shorthand for job cuts, the supplier/client relationship is likely to suffer. “People still want each day to be able to pick up the phone and talk to people to actually implement that technology.”

Quality, too, depends on identifying where cost cuts can reasonably be borne, argued Mike Palmer, managing director of Adstream UK, which provides advertising workflow and media management solutions to a number of global brands including Nokia and Procter & Gamble. “If you cut costs out of something without understanding the process, quality can be compromised. If that affects your end result, then you might have saved yourself £100 or £100,000 on production costs but your advertising might not have had the success you want it to.”

This is where marketing, procurement and agencies must work hand in hand, and where everyone must be involved in engaging with the processes that go into the production of marketing materials. “We see that there is a tremendous gap in understanding the production supply chain,” said Palmer, “so until you really understand the processes, you cannot really understand what technology can help with those processes.”

Martin Braisby, director of marketing services at Hilton Hotels, agreed that this understanding – on the part both of marketing and procurement professionals – must be in place in order to achieve the results required of a campaign by a global brand.

He said: “At the moment procurement is just looking to drive return on cost and trying to minimise cost. It is great to have a procurement team that can do that; but they have got to understand that, yes, you can save 50% of the cost, but your actual productivity and your quality could plummet as a result.”

He outlined what the brand would be looking for if it chose to utilise marketing technologies: “We are trying to look at ways and means by which to use technology to drive efficiencies, improve the processing, improve the workflow and ensure that the right people are involved with processes so that we get delivery of assets, delivery of marketing materials, delivery of promotions and campaigns to market that really drive revenue for us.”

At the production end of the supply chain, TPF Group – which was previously known as The Print Factory but now offers software, logistics and creative services on top of print and document management – has even found on occasion that clients are mistaken about how much they spend on marketing services. This is where the company believes technology solutions can be of immediate and profound benefit.

Business development director Dean Smith gave an example where a client’s nominal marketing budget had been stated as £4 million; but the number rang false, and on closer inspection through its software, TPF discovered that the client had actually spent closer to £12 million on procurement in the previous year.

“We found through the spend management tools within the technology that we have captured 200% more information about what their spend is,” Smith said. As a result, TPF was able to consolidate the client’s overall spending into a more realistic budget, then use its own procurement strategies to reduce the costs to £10 million.

“From a procurement point of view, we are able to negotiate the price down with our suppliers and then pass that on to our clients,” said Smith. “So they get more for less.”

Such underestimations of cost on the part of the client almost certainly imply large amounts of waste within the purchasing process. It is in shining a light on the areas where this waste occurs that technology can perhaps have its most palpable effects.

“We can save our customers upwards of a million, two million pounds when we get to work with the global brands like the P&Gs and the Nokias,” said Palmer. As a result, he continued, marketers are afforded more time to concentrate on their core focus, which is “the quality of advertising and the service around that advertising”.

Acknowledging the problem is only the first step, however. Once it is realised that technology could help, many more questions follow: What technology would best serve the need? Is it better to use several modular products or one comprehensive solution? Should the technology and/or the processes it covers be outsourced or kept in house?

As Smith’s colleague at TPF, professional services director Paul Seaborn, observed, getting the answers wrong could leave a company lumbered with a white elephant. “There is a lot of technology out there that is not really driving down cost by the time you have got it in, gone through training and got IT involved. You are two years in and you have not really got anywhere, so you have not improved your time to market.”

Whether it be customer relationship management (CRM), digital asset management (DAM), marketing resource management (MRM) or e-procurement, “it is about hitting the needs of the business first”, said Julian Backhouse, sales and implementation manager for Kodak’s workflow management solutions. A business’s priorities, he said, should be “the needs, the process and the technology in that order”.

A result might be that a company decides it would be best served by using a range of specialised, outsourced and/or web-hosted solutions (even if, as Backhouse pointed out, these could be run through “one agnostic portal”.) Dalziel predicted that such projects will “explode in the next two to five years”, provided particularly by “people who are leaving organisations, changing course and coming out with more specialisms”.

He gave the example of Signposter.com, which grew out of an internal IT project at the WPP advertising group. The website is particularly targeted at small and medium-sized enterprises, and provides them with a portal to upload or create designs and choose an outdoor location from an interactive map. Signposter then has the poster printed and put up at the chosen location.

Clearly, this is an option for marketing on a small scale. The media buying processes are hidden from the client, as are the margins of the suppliers and the website itself. But larger-scale solutions are also being run increasingly as externally hosted SaaS (software as a service).

According to Hopwood, the decision to buy a SaaS solution often encounters resistance from IT teams who “have been used to buying big ticket software and implementing it on behalf of their management teams”. However, he added: “That is not good enough any more, because it has created a history of projects that have run over budget, taken far longer than they are meant to and never created a return on investment.”

Beyond CRM, which generally deals with sales-based data, and DAM, which broadly speaking is a form of storage for digital files, the panel agreed that marketing-related software in general has seen low uptake. This is particularly true of software that covers the processes of campaign management in detail. For example, Hopwood said: “Industry analysts like Gartner generally talk about 10% of companies having MRM.”

Where technology solutions are being adopted in the marketing supply chain, he said, there has been “a huge move and a very rapid move towards SaaS”, with hosted software making up “more than 80% of our work at the moment”.

As with most outsourcing decisions, the decision to outsource IT can often create anxieties from clients that they will “lose control”, or that there will be a “breakdown in the chain”, Braisby said. Yet this is balanced against the commercial logic of taking overheads out of the company, gaining the expertise of people for whom the process in question is a core specialism, and gaining cost visibility. “With an individual breakdown of outsourcing, you have got much more transparency of cost; so from a client perspective, you know where in the supply chain you have got to focus your efforts.”

“What it does allow the marketing services client to do,” Dalziel added, “is go out and select best of breed for whatever it is to meet their needs.”

Meanwhile, issues of consistency can be met, and in fact improved upon in many cases, by using outsourced services to “blend technology with local sourcing”, Seaborn argued. “Of course there is a risk in us providing you with a managed software as a service, but you do not have your print infrastructure in house and you have just outsourced your design to us. There is a risk there too.”

Any risk is mitigated, as long as the strategy, tools and supplier relationships give the client control over the standards of design and production. Such an approach minimises the scope for inconsistency of marketing messages, which has long been an issue for global brands that need to localise campaigns for regional markets. Here, achieving a balance between sensitivity to cultural differences and maintaining central brand values is crucial.

It might be necessary to switch imagery that would break taboos in particular markets, for example; but it must also be ensured that this localised content does not violate the standards expected of the brand elsewhere. “One of the customers I am dealing with is looking at a brand asset solution and some of the stories they have told me about taking photographs of particular dogs are just horrific,” explained Backhouse. “That is a global brand that has several different DAM systems in different countries.”

Nokia, Palmer said, has somewhat overcome these issues by implementing technology to manage all advertising globally, across 93 separate markets. “It means 3,000-odd Nokia employees logging onto an online workspace and managing all of their advertising in one central location.”

It was “a big technology install”, he acknowledged, but as long as such solutions are managed to meet a client’s needs and ensure proper management of marketing assets and processes, they should be capable of ensuring that marketers get exactly what they require from agencies and suppliers. The speed at which the right marketing technology could allow a company to work means that changes can be made locally, then approved centrally through the portal ensuring brand guidelines are always met.

“Anything can be outsourced,” Palmer noted, “but the only way you make a successful outsource operation is if you keep control.”