It is amazing how most marketers can tell me how much thay have spent with their agency in the past 12 months but few can say what they got for that spend. Sure, they can describe the services provided and perhaps even the resources, but not the amount of deliverables.
This is like me saying “I spent $5000 last year eating out at restaurants and had a great time”. But does this mean that I ate out twice at $2,500 each time or did I eat out 500 times at $10 each? Or did I have a three course meal each time, or just an entree or a degustation menu of 20 courses?
See, how much you spend does not allow you to determine value unless you have a measure of deliverables. This can be executional outcomes, project types or even results.
Instead of simply focusing on the spend (which is important) marketers should also capture volume and type of work to be able to calculate value. Agencies and marketing should have rigourous reporting protocol to be able to measure value.
It is like when clients’ ask us to benchmark hourly rates. This is useful in a limited way. The problem is that low rates can be over quoted and so represent false value. Also, hourly or head hour rates need to be reviewed in the context of the total remuneration and more importantly outcomes and deliverables before you can determine the value being delivered.
Can you determine the value of your marketing communications providers, or simply the cost?
Author: Darren Woolley