A decade ago, agencies and marketers winced at the idea of procurements involvement in their space. The relationships between stakeholders were often contentious. Stakeholders on both sides felt that procurement was singularly focused on cost reduction, did not understand the marketing space and was unable to comprehend, if not measure the quality of outputs delivered by high performing marketing/agency teams.
Have these sentiments changed? Yes, for the better. Have advertisers and their agency partners fully embraced marketing procurement? Yes, in many organizations. That said C-Suite executives at most marketing organizations are comfortable with and comforted by procurement and its role in providing oversight for and optimizing marketing spend.
The good news is that marketing procurement teams have done an excellent job evolving their subject matter expertise and furthering their understanding of the needs of marketing teams and their agency partners. Coupled with procurement’s expertise in all facets of supplier management including sourcing, onboarding, contracting, negotiation and risk management, procurement teams deliver significant value to their marketing peers.
Out of necessity, marketers are increasingly focused on brand building and demand generation. For those fortunate enough to have access to a developed marketing procurement team, the opportunity to drive efficiencies while strengthening relationships across their agency network is significant.
According to the Association of National Advertisers (ANA) better than 80% of marketers utilize procurement to review agency compensation. However, that is just scratching the surface of successfully deploying marketing procurement.
In our agency contract compliance practice, we have seen the benefits to marketers of collaborating with procurement. These include support in the following areas:
- Supplier sourcing, RFP management and on-boarding
- Supplier diversity management support
- Agency performance monitoring and financial management support
- Contracting and annual statement of work support
- Deduping of agency roles and overlap across agency network members
- Agency service consolidation including digital asset management and studio
- Decoupling of production
- Fostering enhanced collaboration between network agencies and in-house resources
From our perspective, the success realized by marketers and their peers in procurement is greatly enhanced when the procurement team has direct interaction with agency finance personnel. This must go beyond contract, SOW, and fee negotiations to include ongoing interactions regarding monthly fee and budget tracking reporting and the preparation for quarterly business reviews (QBRs).
In the end, all stakeholders desire the same outcome, attainment of the organization’s marketing goals with the greatest efficiency. Achieving this aim is best done through open, transparent supplier relationships, which the successful marketing procurement teams recognize. As American businessman Harvey Mackay once said, “A smart manager will establish a culture of gratitude. Expand the appreciative attitude to suppliers, vendors, delivery people, and of course, customers.”