• by Tanya Gazdik , June 27, 2013

Although marketing procurement organizations remain focused on cost as a key success metric, many are beginning to embrace the value of non-cost-centric metrics, and especially ROI measures, according to an Association of National Advertisers study.

Respondents were asked to rate the importance their company currently places on various procurement success metrics. Cost reduction, by far, is the most important metric currently used to measure the success of marketing procurement.

“Cost reduction and avoidance remain ubiquitous as procurement metrics for now,” said Bill Duggan, group executive vice president of the ANA, in a release. “However, our research indicates strong desire and action, especially in mature procurement organizations, to drill down to more advanced and effective ways of measuring long-term success.”

Nearly all (94%) of respondents said they use cost reduction as a success metric. Similarly, 84% cited utilizing cost avoidance. Other procurement metrics commonly used today include agency/supplier performance improvements (72%), process improvements (62%) and risk mitigation (56%).

However, when asked, “ideally, what should be the importance placed on each [metric],” improving marketing ROI was top-ranked, and over twice as many indicated its use is ideal than said they currently used it.

The white paper points to mature -- 15 years and older -- marketing procurement organizations as providing best practices for success metrics. Firms with mature procurement organizations are almost twice as likely to view improving marketing ROI as a success metric than firms with marketing procurement organizations five years or younger.

“In addition to providing a valuable benchmark for procurement organizations, this white paper will enhance marketer and agency understandings of effective procurement metrics,” Duggan says. “Aligning behind these metrics will streamline the procurement process and create winning scenarios for all three stakeholders -- procurement, marketing, and agencies -- especially given the increasing relevance of ROI measures.”

The survey associated with the white paper, “Elevating the Role of Marketing Procurement,” had 113 respondents. It is the latest guidance from the ANA Procurement Task Force, a group of marketing procurement professionals whose mission is to help define and elevate the role of marketing procurement and align it with marketing departments and agencies. The full white paper, “Elevating the Role of Marketing Procurement,” is available online.

"Money tied" photo from Shutterstock.