The Rising Tide: OpEx Growth in Channel Marketing

By Gary Ritkes

Local marketing costs rise by the billions every year. This year, BIA/Kelsey predicts total US local marketing spend to hit $137.5 billion. Given year-over-year growth in ad spend, we’ve taken an in-depth look at the operational expenses contributing to this increase and innovative solutions that can help brands stem the tide.

Too Many Vendors

Channel Marketing has grown in complexity largely due to multi-tactic campaigns. Multi-tactic campaigns drive local traffic, leads and sales because they deliver brand messages in a variety of ways, including the digital spaces consumers inhabit every day. Successful brands understand that repeatedly serving up their messages in diverse ways helps lead the consumer along the journey of awareness, consideration and decision. To get there, brands turn to more marketing vendors specialized in different tactics, which are then strung together for multi-tactic campaigns. In fact, brands used 79% more marketing vendors this year than they did last year.  And 68% of brands attribute OpEx increases to the growing number of marketing vendors they use.

Too Much Headcount

To balance an increase in vendors, brands have also increased the headcount dedicated to managing them. When brands distribute multi-tactic local marketing through indirect channels — local partners, retailers, dealers, agents, local businesses — a significant part of that investment is dedicated to managing campaigns, agencies, vendors and partner relations. Brands are essentially creating their own Channel Marketing army, and that’s driving a surge in OpEx.

Inconsistent Execution

With all the effort poured into developing creative and managing a growing number of vendors, there are fatal flaws in the process.

• Brands routinely spend money on assets and programs that more than half of their partner networks don’t adopt.
• Partners are spending only half of the Co-Op Advertising dollars that brands make available. And when partners do use Co-Op, it’s not on the tactics that brands prefer.
• Co-Op and MDF funds end up wasted on poor local execution from vendors who overpromise and underdeliver.

Innovative and Cost-Saving Solutions

What could possibly stem the tide of rising costs and less than stellar results? The secret lies in one word: Simplicity.

Innovative leaders in today’s Through-Channel Marketing Automation (TCMA) landscape are making Channel Marketing simple. Creative solutions combat complexity and rising costs with simplicity and embedded cost-savings. But not all Channel Marketing Automation platforms are created equal. The crucial element of “simplicity” in Channel Marketing lies in the use of a single SaaS Channel Marketing Automation Platform that delivers an all-in-one solution, rather than piecemeal fixes that don’t quite meet all your needs. And here are four key things to look for in your Channel Marketing Automation Platform:

1. Does it include an integrated network of world-class Marketing Service Providers? This saves brands time and money involved in vetting, selecting, monitoring and managing vendors. It also ensures flawless, brand-compliant execution every time. But equally and if not more importantly, by having this pre-wired, brands can offer partners the ability to have one point of contact to help manage and execute the various marketing tactics without having to work with every vendor.
2. Does the platform offer Automated Campaign Execution? Make sure this includes not only ad building capabilities, but also ad flexing technology and dynamic templates to ensure brand compliancy every time. This means brands save money by reducing the total number of templates needed, getting more campaigns in market faster and reducing the amount of custom requests coming from the field.
3. Does the platform include a robust Co-Op Funds Management system? This means offering not only deeper cost-savings on the claims process but also innovative options such as instant funding, which can eliminate the claims process altogether.
4. Does the platform deliver analytics to determine ROI? Keep in mind that leading Channel Marketing Automation platforms do not only offer analytics on individual campaigns after the fact. Look for one that offers analytics on every tactic and every partner across your entire distribution network – in real time. This level of in-depth analysis empowers brands and their partners to quickly respond to changing market conditions. It also keeps brands from wasting money on ineffective tactics and campaigns, so they can invest only in what works.

All these solutions, within a single SaaS Channel Marketing Automation Platform, also cut down on the headcount needed to manage all the tedious administrative tasks involved throughout the process. With the right solutions in place, it’s clear that brands can stem the tide of rising costs.