Lynne McCarthy Marketing

product-and-packaging-development

Marketing Procurement 

 

Marketing is a substantial investment for most companies, often as high as 5% of gross revenues. But despite its size, marketing tends to escape the financial scrutiny and sourcing rigor applied to other large spend categories.

Experience proves that many strategic sourcing and supply management principles are applicable to marketing too, and will deliver the same or greater results. In fact, my experience suggests that savings averaging 10% are possible in as little as six months — without reducing total ratings points (TRPs), laying off staff, changing the media mix or changing ad agency support levels.

The simple truth is that marketing investments should be sourced as rigorously as every other major spend category in the supply chain. However, the tact to deploy depends on the maturity of your marketing procurement capabilities.

Common characteristics among organizations, with low marketing procurement maturity, include a lack of C-level support — for example, from the CEO, CFO and/or chief marketing officer — for Procurement's involvement in sourcing marketing spend. As a result, performance evaluation criteria are misaligned between Marketing and Procurement, and Marketing neither trusts nor values Procurement's involvement.

Usually one also finds that few or no procurement personnel have ever held marketing or ad agency positions. They might have sourced other categories, but not marketing, and they have never taken any marketing domain training. Consequently, marketing procurement in these organizations typically is performed exclusively by marketing functional subject matter experts (SMEs), and marketing spend management is decentralized across divisions, brands and geographies. In addition, spend management and management reporting is almost always manual, Excel-based and done on a one-off basis.

Low marketing procurement maturity companies should first cement C-level support for trials or pilots and foster momentum based on the results. Senior-level involvement ensures that marketing and procurement mutually define "success" and align metrics accordingly.

On the personnel side, educate staff to be involved in marketing procurement through the Association of National Advertisers or via an "Intro to Marketing" class prior to their engagement in projects. Staff may also want to study under a marketing procurement specialist to acquire the necessary expertise before going it alone.

Should your company require marketing procurement services, please do not hesitate to Contact Us