Why you shouldn’t be scared of marketing procurement

In the past month inflation in the UK has risen to 1% and this number is now expected to grow, meaning that over time your marketing budget is likely to get squeezed.

This gloomy outlook was echoed recently by Sir Martin Sorrell at WPP. He warned that the advertising market in the UK is softening, suggesting this is one of the first signs of Brexit anxiety taking hold of the economy.

Future proofing your marketing budget becomes vitally important and enlisting early help with marketing procurement will maintain costs – and over time drive much greater value for money.

We’ve all heard it, procurement is there to stifle creativity and is ‘the enemy’ of marketers. Really? This is not the 1990’s and that’s not what marketing procurement is actually about.

Marketing procurement might only be 20 or so years old as a function, but that’s long enough to become an accepted reality, particularly when facing the challenges we’re seeing today.

Stifled growth, inflation, Brexit, massive currency fluctuations, not to mention the ever-changing landscape that is marketing.

In this unprecedented era of change how do we tackle it? As JFK once said: “Change is the law of life”.

And those who look only to the past or present are certain to miss the future”.  This can be applied directly to marketing, and especially to its relationship with procurement.

The question now is how can it be used to best advantage and help you stay ahead of the curve?

Why marketing procurement?

I think PepsiCo has gone nuts marketing-wise.  In late 2015, the company decided to disband its marketing procurement team and devolve procurement responsibilities to individual brands. The question I’d ask is, do we really believe that getting rid of specialisms is a good thing?

Let’s tell the agency to get rid of the copywriter or further still get rid of the designer. But who is now going to do the work?  The account manager or maybe the planner, that’s who.

Now while they may be a great people, are they really the person you want designing and writing your campaign when there are better qualified people to do the job? The same applies for specialist marketing procurement.

Having a team who understand what you’re trying to achieve as well as the tools, techniques and market landscape in detail is only going help you deliver a better result.

It’s not for everyone, and CMOs need to see the external challenges ahead, and must tackle them head on

Marketing procurement should become fundamental to ensuring the success of the marketing department. They won’t add creativity to your campaigns, they won’t come up with that killer idea – but they will ensure a flow of money and provide stability to agency and marketing departments alike.

How do we future proof?

Marketing procurement isn’t just about cutting costs, it’s about value. Of course, this does include cost as an element, but it’s more than that. It’s service levels and relationships, as well and making sure the agency delivers what they promise.

It’s also about better contracts, FX hedging, understanding the wider market landscape, choosing the currency, setting the objectives and deliverables, choosing the contract law and location.

Some of it might sound dull to creatives – but that doesn’t mean it’s not important.

Innovation 

There are more innovative ways that can help us futureproof marketing budgets, but not all marketing procurement is created equal and not all procurement professionals have the skillset and  know-how to implement transformational changes that secure relationships and manage costs more effectively.

One of the techniques 4C Associates has developed and is using with global clients across multiple sectors including Dutch retailer HEMA is the implementation of Lean Six Sigma within marketing. This method is built on the core elements of Lean (normally used in manufacturing), but we’ve modified it for use within marketing.

It enables us to iron out inefficiencies in processes, as well as tackle the root causes of cost inflation. These might include repetition of work, incomplete or failure to sign work off, or even staff retention and inconsistency within agency teams.

The focus we put on the root cause of the problem, rather than just hammering away at headline cost is essential to ensuring relationships with agencies are not only maintained, but enhanced. We need, like you, to have engaged teams because they perform better and don’t cost as much.

This type of innovation is delivering massive benefits without disrupting the work of the agency, or marketing department. It’s not for everyone, and CMOs need to see the external challenges ahead, and must tackle them head on.

While the future from a UK perspective may look uncertain, it doesn’t mean that there isn’t anything that can be done to help manage and control costs.