European firms wasting millions procuring marketing products and services, a new report has claimed.
According to a forthcoming study from marketing production specialists Charterhouse, Europe’s top-500 companies are wasting an average of €716m on inefficient marketing procurement. The vast majority (88%) say that current procurement practices are ineffective, while four fifths (79%) claim it could be more efficient.
David Fincham, director at Charterhouse, said, “There is a huge opportunity for big businesses to make significant savings on their marketing. Driving purchasing efficiencies will be vital in an uncertain economic environment and in light of shrinking marketing budgets.”
The yet-to-be-released study entitled, The Marketing Maturity Matrix is based on the responses of 200 procurement professionals from across Europe’s 500 largest businesses. It reported that such savings could be a lifeline for companies, many of which have exhausted traditional procurement savings. According to the research, two thirds (65%) of procurement professionals agree that traditional procurement categories are yielding fewer savings than ever before. Likewise, the vast majority (88%) say their existing procurement practices are becoming less effective.
Almost four fifths (79%) of procurement professionals polled claim that marketing products and services could be purchased more efficiently in their organisations. Over a third (39%) agree that these potential efficiency savings are a significant opportunity for their businesses.
A similar proportion (35%) describe marketing as the last real opportunity for procurement to drive significant new savings. Fincham said, “The potential to identify new savings in an already squeezed environment is great news. But marketing procurement must be approached intelligently to avoid reducing its effectiveness. We believe a closer relationship between the two disciplines can drive real savings, without sacrificing the vital creativity and innovation that effective marketing demands.”
However, only a fifth (21%) claim their organisations are already as lean as possible. “Most large businesses have been furiously driving out inefficiencies since the start of the recession. As a result, procurement professionals are having to seek out savings in new areas. These professionals rightly have their sights set on marketing procurement. Working with marketers to identify potential savings could help marketing budgets go further and create efficiencies for the organisation as a whole,” Fincham said.