Where does your digital advertising spend really go and is it actually driving value? Digital Marketing remains the fastest-growing media, but it does not come without challenges. Hundreds of new entrants flood the market with hyped opportunities to drive advertising effectiveness, transparency, and ROI. With the transformational possibilities to know your customers personally, to better understand their buying behavior, and increase conversion, businesses are investing in digital channels and technology to achieve these Marketing goals, but at a substantial cost.
Proxima’s research into the state of digital marketing spend has found that many companies are ineffectively spending between 40 and 60 percent of their digital budgets, with most wastage coming from non-human traffic and poor viewability/placement. Additionally, many companies invest in marketing tools simply because they know they should, resulting in failure to utilize the technology to its full potential.
When put into action, poor strategy and execution of digital advertisements and the inability to derive meaningful performance metrics, insights from impressions, and collected data can not only waste your budget but damage your brand and reputation. However, this challenge is not new and not just a budget or cost optimization concern; without a clearly defined media strategy, actionable consumer insights, established policies, and cross-functional collaboration, digital spend wastage continues, and brands’ competitive positions weaken.
Marketers need to understand how to effectively manage their digital marketing budget and work with third-party agencies to recognize customer needs and buying habits, as well as connect with the customer on a direct and personal level. Additionally, the implementation of long-term strategies to achieve growth plans must be aligned and communicated across the organization to be successful, involving functions such as Finance, Sales, Operations, and IT.
Managing digital advertising spend with third-party agencies can be complex, however, trust in cross-functional teams and agency partners should not be. That is where procurement can function as an independent third-party, helping marketers with internal strategic alignment and external KPI goal setting throughout the buying process.
Procurement can challenge agency motivations and interests through value-focused negotiations as well as assist in ensuring transparent governance and policy are established and external audit expectations are set through contractual obligations to drive compliance success.
Procurement can also offer recommendations of the right balance of in-house vs. external capabilities and technology to optimize data-driven decision-making that can directly influence the success of future marketing campaigns. To hold agencies accountable to drive incremental growth for your business, procurement can assist with establishing the right key performance metrics, relationship management structure, and service level agreements. The way businesses can create and foster customer relationships continues to evolve; so should collaborative partnerships and the opportunity to drive value through your digital advertising budget.
Get in touch today, if you would like to learn more about how Proxima can help you.