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STAMFORD, Conn, June 27, 2019

Gartner Identifies Five Cost Optimization Tactics for Marketing Leaders

Marketers Must Take an “Always-On” Approach to Cost Optimization

Marketing leaders must approach cost optimization as an expansive, always-on effort that can have both an immediate and long-term impact on how marketing delivers against business goals, according to Gartner, Inc. To address this challenge, Gartner has identified five cost optimization tactics for marketing leaders.

“Over the last few years, Gartner’s CMO Spend Survey has shown marketing budgets remain stubbornly flat — while CMO accountability continues to rise with a broader scope of activity than ever before,” said Ewan McIntyre, vice president analyst in the Gartner Marketing practice. “However, we’ve also found that marketing leaders lack the fiscal prowess to build a strong link between marketing budgets and the business results they deliver, creating significant cost optimization challenges for the function.”

Marketing leaders often focus cost optimization efforts on short-term variable costs (e.g., media spend, talent, etc.). However, to truly serve the enterprise, cost optimization demands a mix of actions that touch every part of marketing operations.

Below are five cost optimization tactics to set up marketing leaders and their teams for success:

  1. Cover all aspects of marketing’s operations: Marketing leaders should ask seven questions of the core elements that make up marketing operations (i.e., people, processes, partners and technology) to uncover a range of initiatives that will deliver cost savings across the span of marketing’s accountability. These seven questions should focus on where you can “eliminate,” “simplify,” “utilize,” “standardize,” “centralize,” “automate” and “renegotiate” costs around each of these core elements.
  2. Identify efficiencies with your marketing agencies: Agency expenses are often an easy and tempting target for marketing leaders focused on cost optimization. However, marketing leaders should beware of damaging strategic relationships or impacting long-term performance in the name of short-term cost savings. Instead, CMOs must work to identify sustainable savings with agencies and drive operational excellence with a more balanced approach.
  3. Drive cost optimization across campaigns: Advertising spend is viewed as another “quick win” for many marketing leaders looking to cut costs. However, in order to maintain reach, engagement and conversions — all while optimizing costs — marketing leaders must take a structured approach. One that focuses on simple efficiency metrics to help build visibility and accountability, and ultimately sharpen media investments.
  4. Maximize technology ROI: Higher rates of marketing technology (martech) abandonment are reported among solutions that are complex, redundant, unfamiliar and don’t meet performance expectations. To avoid subpar experiences, middling performance and excessive costs, marketing leaders should take inventory of their martech portfolios and survey key users, investigate and consolidate redundant technologies, and pursue training and education across different types of martech users.
  5. Optimize marketing analytics costs: One critical marketing capability that requires both investment and oversight is analytics. Assessing marketing analytics technology overlap is critical to ensure that costs are optimized without derailing more strategic efforts. Marketing leaders must build in processes and evaluate the impact their organizational style has on analytics usage and costs.

“In order to drive business performance while reigning in costs, marketing leaders must establish cost optimization programs that uphold marketing’s strategic objectives, account for constraints, and identify the courses of action that balance the complex and competing forces within marketing’s operational purview,” added Mr. McIntyre.

Gartner for Marketers clients can access relevant research and insights in the report “Driving Cost Optimization Across the Enterprise: A Marketing Perspective.”


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