Actionable advice from Procurecon Nov 2–3, 2022
Last week was a great turnout for the Procurecon Conference in Palm Springs, CA, both in the number of participants as well as the quality of sponsors! Topics covered a vast range, from marketing procurement’s role in successfully navigating AI, the Metaverse, and digital transformation, to simplifying the RFP process and agency evaluations.
The conference kicked off with a keynote by Stephen Broderick of MMC and while mentioning the table-stakes of procurement and marketing collaboration, sustainability and diversity, he quickly turned the focus to highlight that, while everyone talks about the importance of transparency, very few people are recognizing that the important goal should be media and marketing effectiveness. There is a huge opportunity in this space to improve the effectiveness of media spend by requiring full transparency across and within your various supply chains.
Following are some key takeaways and actionable advice for marketing procurement to focus on as you finish out this year and establish your goals for 2023.
Transparency
In the present landscape, with pending impact of inflation and a potential worldwide recession, marketers need to stay focused and vigilant around transparency to drive marketing efficiencies, effectiveness and satisfy overall marketing agendas.
Some of us feel that we have already achieved transparency into in the relationship with our agency partners, but the truth is, we rarely see beyond the first level of partners.
We must look past direct agency relationships and focus on the entire value chain. The opportunities for procurement can only be realized when we dig deeper into the supply chain and encourage equal transparency into other creative partners, affiliates, mar-tech providers etc.
Agencies often encourage marketers to buy services from affiliate partners such as programmatic media. Agencis also sell proprietary media (aka invesntory deals). Both of these media purchases are often sold under a non-transparent contract. By gaining more insight into these deals, marketers can validate the perceived benefits of these deals and ensure that media efficiencies vs. transparent deals are captured within markeitng procurement as value add.
ANA is currently undertaking an ambitious project to push complete transparency into the entire programmatic value chain. Marketers need to help drive the agenda to ensure more transparency in this space.
Why do marketers only have access to the best priced media deals if they waive all rights to see the cost of that media? You have appointed your media agency to provide you with the best service and best rates. So, why do clients need to sign away their audit rights to access those deals? What sort of deals are the clients accessing if they choose not to sign that document?
Three key questions to ask yourself and your marketing team:
1. Do we know the cost of all our media?
2. Do we have access to the best media deals without giving up transparency into cost?
3. Do we know how our media partners make out money?
Clear strategic imperative and aligned KPIs
Another hot topic for marketing procurement that emerged from different conversations was the need to clearly align KPIs across the organization not just marketing and procurement. At the risk of sounding repetitive — yes, the entire organization need to have one set of goals — often referred to as strategic imperatives. The KPIs for each division, department and team need to be aligned to these goals, even if the direct KPIs will impact different areas to drive those goals. Having a clear set of goals and open discussion with different stakeholders upfront (and the beginning of each fiscal year) is imperative to be able to successfully deliver across the company.
Focus on clear plans and priorities across all marketing channels was another area that warranted discussion. Integration and conversion are key to marketing teams. Procurement can support that by ensuring that key partners are delivering both in terms of results but also on commercial and contractual commitments. Procurement needs to focus on delivering on the strategic priorities to the stakeholders and not just focus on savings or cost-cutting. The end goals should be to support the organization and deliver value.
At the risk at sounding old-school, marketing procurement is different from most other categories within procurement. Our key stakeholder — marketing — is razor focused on delivering unique customer experiences to every potential and actual customer, yet there will always be a financial imperative that cannot be ignored, it is paramount to follow the philosophy of driving efficiencies, effectiveness, and simplification first, and as a result, savings will come. As one attendee said “while cost savings is a measurement, driving value creation is the end goal.”
Manage your internal and external stakeholders
There was a panel discussion (can you list the panel names?) The advice from all members on the panel is to target your conversation to the stakeholders. While we, as procurement, focus on transparency and openness in all our conversations with everyone, discussing all issues with all people is a bad idea. To make sure each stakeholder remains engaged, committed, and supportive, highlight the benefits and steps to take that concern them.
From the participants representing the agency networks or individual agencies, we heard a similar message. Marketing procurement is key to the success of any agency relationship. Common ground and openness are important. It is important for marketing procurement to demonstrate an understanding of the agency situation and work together on solving these when they impact both sides. For example, new salary disclosure laws in certain states will impact talent significantly and this is an area where marketing procurement can help agencies in determining the impact on the marketing relationship.
It was agreed, to have a win-win scenario between agencies and marketers, sometimes the hard, candid conversations will drive further collaboration and value generation. Agencies understand that marketing procurement is focused on wrapping as much value into a deal as possible and if they are focused on what is good for the client, they will act on that interest.
Turning the conversation to the internal marketing procurement team, after two years of isolation, it is key to focus on building group energy again. This is difficult, as many companies have chosen to introduce hybrid models in terms of a split of time in working in the office and working remotely. But, as a leader, it is important to plan and engage in team activities and be open in communications, goals and KPIs. Transparency about these areas creates employee engagement and loyalty.
Driving efficiencies
While many folks understand savings to mean fee reduction, marketing procurement has moved away from cracking the whip on fees alone in the past few years. Fees should be set at a reasonable level with transparency demonstrating its benefits and value to both parties. Marketing procurement is now much more focused on identifying operational savings. To implement operational efficiencies, it is important that the agency personnel feel confident to bring issues to the table and for procurement to ask the hard questions. Again, the words “collaboration”, “trust” and “engagement” were used to describe these mutually beneficial discussions. Procurement needs to overcommunicate to agency leadership and staff that operational efficiencies are desired and help agencies plan and execute these projects for mutual benefits. Procurement can step up and be an ally for these conversations.
Many agencies and marketing procurement departments have delivered optimization over the past two years. These now need to be solidified and worked into the day-to-day environment — the new normal. By doing this, the procurement team can shift from an old-school mentality of being reactive to becoming proactive and push best-in-class partner enablement. Procurement can lead the change in this field.
Be ready to rumble
As a final question, marketing procurement was asked what actions leaders in procurement should take NOW to be ready to rumble in 2023 and an astonishingly common theme emerged among the participants. They all said that prioritization is the only way to succeed. It is clear. that marketing procurement cannot do it all. During the last few years, the procurement agenda has increased with sustainability and diversity activity, the agency world is becoming more complex by the day, the players are merging, divesting, and constantly introducing new services by the minute — therefore “relentless prioritization” has become the new normal for marketing procurement.
To prioritize successfully, procurement leaders should evaluate the projects based on three objectives:
1. Probability
2. Complexity
3. ROI
While marketing procurement must relentlessly prioritize projects on their agenda, the industry has seen more utilization of service firms supporting marketing procurement in the delivery of goals. While procurement is clear that they cannot do it all — they also understand that they can capitalize on external resources to help them deliver on a larger number by utilizing temporary resources to either identify opportunities or implement on opportunities already identified in the marketing procurement’s To Do list.
