Are you an executive who works at a large advertiser? Are you responsible for managing relationships with marketing & communication agencies? Are you looking for new ways to optimize those relationships? You’ve come to the right place.
In this ultimate guide, we look at the red-hot area of Business Intelligence and Data Analytics, and specifically how data can be applied to marketing procurement decisions.
Feel free to jump ahead to any section at any time:
“Price is what you pay. Value is what you get.” –Warren Buffett
As a discipline, marketing procurement is tasked with helping deliver optimal value from the advertising and communications budget. In many ways, marketing procurement executives should be viewed as “investment managers,” helping our stakeholders decide where spend with our agencies will return the best outcomes.
Wise choices can significantly affect both the top and bottom line, but correspondingly, poor ones can have a negative impact on brand awareness, growth, and profit.
In making these complex investment decisions, we need to take into account many variables from a wide variety of sources, such as:
It certainly sounds like a daunting challenge, what with critical decisions, limited time-frames in which to make them, large amounts of information needed to make them wisely, and costly consequences if they are not made correctly!
As a marketing procurement professional, your discipline truly is all about marketing investment management. However, there is good news.
“An investment in knowledge pays the best interest.” –Benjamin Franklin
The good news is that as marketing procurement professionals, we are sitting on a gold mine that we might be unaware of, or we’re certainly underutilizing it.
Across all areas of marketing, decisions are increasingly being underpinned with a solid foundation of data.
In the area of agency management, we can access a rich set of information that can help optimize strategic decisions, such as:
There are several different types of data we need to collect to assist with better decision making. These data sets include:
It is vital that the data needed to make informed decisions arrive at the right time, to the right person, and is of the highest quality possible. This places an emphasis on having processes and systems that allow this information to be collected efficiently, often across multiple geographies, business units, and with different types of agencies.
Most decisions made in the agency management arena are time-critical and must be accurate.
Unfortunately, the technology most often used to collect and aggregate this data – typically spreadsheets – suffers from a significant overhead. Spreadsheets are slow to collect, labor-intensive to centralize, and often suffer from poor data quality and transposition errors.
Having the appropriate technology in place that can automate the collection of data and store it in a central structured repository provides a clear, competitive advantage. The true goldmine of data in marketing procurement is allowing us to make faster, more robust decisions.
Once we have the right data available, the next step is figuring out how to use the data, and in the next section, we turn our attention to this vital piece of the puzzle.
“One picture is worth ten thousand words.” –Chinese proverb
Over millions of years, the human visual system has developed to become our dominant mode of understanding the world. It is estimated that around 50% of our cognitive ability is focused through our eyes.
Our ability to survive was predicated on us being able to distinguish visual elements such as position, size, angles, and color, in order to look for patterns in our environment. Having the ability to distinguish between a large lion and a small cat was literally a case of life-and-death, as was the ability to determine the color of the berry that was about to be eaten or the shape of the rock you were about to stand on in order to cross the river.
To help you understand how powerful our visual cognitive system is, here is a simple test. Take 15 seconds on each part of the quiz – at the end of part 3, you will have a good idea of why visual analytics are so important!
In this Part 1 image, it’s pretty hard to quickly tell where the 3s are. You can do it, but it takes longer than you wish it did.
Now that the 3s are distinguishable, it’s much easier to count how many there are.
When we’re able to visualize the numbers we’re searching for, we can start to make predictions about what will happen next. I bet you can make an educated guess as to where the next “1” will be on this example!
This ability to utilize our visual system to rapidly estimate size, identify color differences and detect patterns is known as preattentive processing.
Unfortunately, we are not provided with the same natural ability to process numbers. We need to learn techniques to understand and manipulate them. As a result, it is generally far more difficult for us to find patterns and to extrapolate from them as to what might happen in the future.
To address this – and take advantage of the “neural super-highway” that we are provided through preattentive processing – a new breed of data visualization software has emerged.
It allows us to take large numeric data sets, apply statistical analysis, and use appropriate visuals to represent those in a way we can easily understand. From the insights these provide us, we can make decisions and ultimately take action.
We can use length and width, color and shade, and even shapes to help us better visualize data in marketing procurement.
Through bar charts, heat maps, and different shapes for different categories, it suddenly becomes much easier to see what the data is trying to tell us. It’s the same concept as using color-coded sticky notes in your planner – it’s simply on a much larger scale with more complex data sets to analyze.
“If you can’t explain it simply, you don’t understand it well enough.” –Albert Einstein
What we now need is a methodology that brings data, tools, and people together. In using this process to accomplish our end goal, it is critical that we understand what the “field of play” is (i.e. what the key decisions are, and who needs to make them).
We recommend using our 4-step process to bring your data strategy to life.
You can read more about this here: The 4-Step Process to Developing a Marketing Procurement Data Strategy
However, the key components of the data strategy include the following steps:
If you follow these essential steps, you’ll be on the fast track to adopting your own marketing procurement data process.
“Give us the tools, and we will finish the job.” –Winston Churchill
Historically one of the most common ways to analyze data has been to utilize the ubiquitous “canned report” offered by most software platforms. Some common characteristics of canned reports are:
Canned reports tend to be slower to run, they’re often in PDF format and are not designed for further manipulation, they carry a heavy payload of data, their format is not optimized for visual understanding, and they must cater to a broad audience.
Generally, canned reports are “developer-intensive” – that is, they are written by software engineers who do not have a background in visual communication and storytelling!
On the other hand, dashboards have been designed specifically for analytics, often to a narrower audience that has a need for answers to deep and advanced questions. Dashboards need to provide the following features:
One of the areas that our marketing colleagues have long been aware of is how powerful “telling stories” can be in order to motivate people to undertake change.
Stories allow us to rapidly share new ideas, create a dynamic sense of purpose and understand the world by giving us insights into new areas. The best stories leverage our innate enjoyment of blending both fact and emotion. They not only describe who is involved, what is happening, but also set them into a context that helps you understand why they happened.
We can use this narrative technique in looking at the way that we need to interact with data in order to make better decisions.
To tell a meaningful analytical story we need three main elements:
The following case studies illustrate real-life examples of how combining analytical stories, visualization and data can be combined to achieve improved agency management understanding.
This first example is a Marketing Procurement Manager who wants to know if the proper resources are being used for each project.
Let’s look at our three main elements of who, what, and why.
Who is the intended audience?
Marketing Procurement Manager
What do they want to know?
Why is the data useful?
Now that we know our who, what, and why, it’s time to gather the data and visualize it. Here is an example of how that can be done:
Our second example is an Agency Management Director who wants to know if their agencies are performing well.
Let’s look at our three main elements of who, what, and why.
Who is the intended audience?
Agency Management Director
What do they want to know?
Why is the data useful?
Now that we know our who, what, and why, it’s time to gather the data and visualize it. Here is an example of how that can be done:
Our third example is a Marketing Finance Manager who wants to know if the budget needs any adjustments.
Let’s look at our three main elements of who, what, and why.
Who is the intended audience?
Marketing Finance Manager
What do they want to know?
Why is the data useful?
Now that we know our who, what, and why, it’s time to gather the data and visualize it. Here is an example of how that can be done:
Our final example is a Marketing Director who wants to know if the agencies being used are performing well for fees involved.
Let’s look at our three main elements of who, what, and why.
Who is the intended audience?
Marketing Director
What do they want to know?
Why is the data useful?
Now that we know our who, what, and why, it’s time to gather the data and visualize it. Here is an example of how that can be done:
“The value of an idea lies in the using of it.” –Thomas A. Edison
In spite of the use of these advanced tools and techniques, we still must not automatically assume that the message we’re trying to communicate has had the desired effect.
There are three questions that we can ask ourselves of the analytic process we utilized:
Of course, all three must be in place to achieve success! Feedback and refinement are vital parts of the process in order to build a successful marketing procurement Business Intelligence program.
Ultimately, these decisions and actions need to lead to measurable improvements. To that end, it is certainly advantageous if these can be tracked with tangible KPI’s such as:
Throughout the course of this ultimate guide, we’ve essentially gone through 10 key steps to improving your marketing procurement Business Intelligence program. That is, adopting a better process for gathering and understanding analytics and data.
In order to make this entire data application and visualization process easier, Decideware can help.
Decideware provides major advertisers with the world’s best Agency Lifecycle Management Platform.
Decideware’s Agency Lifecycle Management Platform offers advertisers an unrivaled opportunity to:
As a marketing procurement professional, trust us when we say you will want to access the power of analysis and reporting with Decideware.
Decideware Business Intelligence (BI) was created to help advertisers make complex data simple. Decideware BI uses data visualization technology and provides expert services, consulting to build dashboards that answer important questions about advertisers’ agency spend, relationships, and performance.
Marketing & Procurement teams now have the power to quickly understand where and how they should focus their efforts to produce significant gains.
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