Today budget cuts through internal and external consolidation is more than just fashionable; it's a business imperative. Marketing companies are streamlining their internal organizations and reducing their roster of agencies

During the past year, companies across a wide range of industries have slashed costs as they have struggled to stay in the black.  Marketing services suppliers clearly have not been immune from the cost cutting tactics. Streamline OperationsAmong the most notable companies to change the way they interact with marketing suppliers is Proctor & Gamble.  This year P&G significantly expanded a pilot program launched in 2007 that fundamentally simplifies how it manages its agency operations.  A single P&G brand leader teams up with a single agency employee to develop and execute a brand message to be implemented by a team of marketing services vendors.  The goal is to streamline operations and insure consistent messaging.   Given P&G's stature, some industry observers believe other marketing companies may adopt P&G new organizational structure. Like P&G, Motorola combined five separate business-unit marketing groups into a single product marketing organization. They also consolidated on the agency side, reducing its roster of global agencies from several dozen to about a dozen. "Before, every segment went out and got an agency they liked, which was not good at presenting a cohesive Motorola message across the brand," Eduardo Conrado, senior VP-global business and technology marketing said in B to B magazine. Tough TimesThe move toward consolidation coupled with greater involvement by clients' procurement and finance departments have cut into agency profits in a big way.  Sir Martin Sorrell, WPP's CEO, believes their involvement has contributed to a more "aggressive" approach to contract negotiations.  "These are very tough times and clients are behaving in quite a tough way. And it's a pretty brutal environment, more so than it has been for some time," he said, according to the Financial Times. That environment is likely to foster even greater consolidation.  Marketers across the board are looking for greater efficiencies and cost savings.  The chip-maker AMD dealt with over 1,000 global agencies when Nigel Dessau, the CMO joined the company in March 2008. Now there are 300 agencies on AMD's approved supplier list. "That is a terrible way to use money," Dessau said referring to the huge number of agencies. Which Suppliers To Keep?One challenge for marketing organizations that wish to consolidate suppliers is deciding which suppliers to keep.   And it's difficult to know if the roster of current suppliers includes the marketing services companies that are best suited to meet its marketing needs.  That's where an objective and comprehensive resource like PromoAid can provide invaluable information and insights

Consolidation Is The New Black