What a decade of selling to CMOs taught me about how marketing money is actually spent

I spent years on the vendor side of the table, inside ad tech and media businesses. Here is what that vantage point shows you about where a marketing budget really goes.

Before I ran a consultancy, I ran revenue for technology companies that sold to marketers. Demand-side platforms, video, data. Our customers were agencies and brands. Our job was to get as much of the media budget flowing through our pipes as possible, at as high a margin as the market would bear.

Nothing about that is sinister. It is what every vendor does. But it gives you an education that most marketing leaders never get, because they only ever see the vendor from the outside.

Three things the vendor side teaches you

The rate card is a starting position. Every platform and every agency has a list price and a floor. The distance between them is the negotiation. Clients who know the floor exists pay a fraction of what clients who do not pay. Most do not.

Margin hides in layers. Fees are not taken in one place. They are taken in six small places: platform fee, data fee, technology fee, trading margin, rebate retained, and the fee on the fee. Each one is defensible on its own. Together they can be a third of the working budget.

Incentives are aligned to volume, not outcomes. A platform is paid on spend. An agency on a percentage of spend is paid on spend. Nobody in the chain is paid for the client spending less and getting more. That job has to belong to the client, or to someone the client hires.

What I would tell a CMO

You are not being cheated. You are being sold to by professionals, and the commercial side of the relationship is not where your expertise lies, nor should it be. Your job is the brand, the growth, the team.

But someone on your side of the table has to know the floor, see the layers, and hold the incentives straight. If that is not you, and it is not procurement, and it is not the agency, then it is nobody. And nobody is expensive.

The upside

When the commercial side is run properly, the marketing gets better. Money that was leaking into intermediaries goes back into working media. Senior agency people come back onto the account because the contract asks for them. Measurement gets honest because the model is not being marked by the people it grades.

That is the whole thesis of the work we do. It came from having sold the other side of it.