By Brad DeHart
Marketing Practice Leader
More than ever, given budget constraints and today’s overall economic environment, the door to working with marketing may be more open than many procurement organizations realize (or at least, the door may finally be unlocked). There is a significant opportunity for companies to realize savings within marketing, particularly if this is a procurement “greenfield” that has never been professionally sourced. Before procurement organizations charge into the room and announce themselves, however, they should realize that the method of entry and first impressions mean everything. Assuming they do get a foot in the door, procurement professionals must demonstrate working knowledge of marketing and be willing to work in an entirely different way with their marketing counterparts than they do with many other functions. Think “service, relationships, creativity”—not “price, price, price.”
For example, I think an unspoken rule I have learned over the years is that over-emphasizing or highlighting savings as the predominant reason why marketing should work with your procurement organization is a dead end. It’s important to realize that marketing, depending on the size of the company, sees themselves as driving tens of millions if not hundreds of millions in revenue. They really do not get excited by saving a few million dollars. Of course, there are tremendous opportunities to drive savings as part of working with marketing and yes, marketing sometimes even wants to reopen agency relationships to explore other options. But with marketing, the key is to focus on helping them with their marketing supply chain problems vs. orienting the relationship around traditional procurement goals. If you focus on their problems as marketers, and believe me, these are significant and never ending, the savings will follow. If they do not see procurement adding value, they will simply not work with you (and most have the power to do that, if not directly, then worse, passively, thus wasting everyone’s time).
It’s not easy or second nature for procurement to engage marketing on their terms. Thus, it is worthwhile for companies to either invest in recruiting resources who already have marketing procurement experience or work with outside parties that have this experience.
When I was with Pfizer, formerly Wyeth, I led a team of marketing procurement professionals dedicated to helping the marketing organization stretch their budget by identifying and negotiating the best possible price and value for their investments. This team partnered with marketing for over a decade, supporting all areas of marketing investments and activities. I now lead ICG Commerce’s Marketing Practice and work with many Fortune 500 companies, some of which have only recently started establishing the link between marketing and qualified marketing procurement professionals. Regardless of whether there are marketing procurement resources in your company or you leverage an outside provider, there are several key benefits for marketers who tap professional procurement support rather than “self-source”:
1. The supplier marketplace continues to evolve. With new entrants and capabilities constantly emerging, a marketing procurement specialist can take a comprehensive look at options to support marketing. A specialist can help marketing gain greater visibility of these capabilities and create a competitive process where appropriate–enabling marketers to identify the best agencies and suppliers to support business objectives and negotiate the best possible service and pricing.
2. It is hard for marketing to efficiently lead their own sourcing processes that enable apples to apples comparisons (or at least fruits to fruits). Given everything on their plates and therefore lack of focus or familiarity with the issues that can arise when evaluating and deciding on marketing partners, I find that when left on their own to self-source, marketing-led selections for agencies etc. become prolonged, confusing and expensive processes for the suppliers involved. In addition, politics often come into play or marketers have a tendency to think back fondly on past agencies and resources with whom they have worked and jump right to them to support future needs. Often, these relationship-based sourcing decisions can falter, profoundly impacting a company’s marketing plan and the success of the marketers themselves. Marketing procurement professionals can help create a formal and objective approach to evaluating and selecting the best suppliers to support business objectives.
3. Marketing needs to focus on marketing. While the marketing team needs to provide input throughout the sourcing process and should always make the final decision, leveraging support outside the organization to drive the supplier sourcing process enables the marketing team to focus on their most pressing priorities. Once they reap the benefits of a successful marketing procurement engagement, marketers will be only too happy to leave the door open to partnering further with procurement.
Brad DeHart is the U.S. marketing practice lead at ICG Commerce, where he and his team help marketing organizations at leading companies work with and realize significant value from their agencies and other marketing suppliers. Previously, he led a team responsible for $700 million of marketing spend at Pfizer, formerly Wyeth.