As many companies look to freeze marketing budgets, Steven Sargent examines how procurement can help maximise value.
The latest IPA Bellwether Report has revealed an increase in marketing expenditure of just 0.1 per cent for the first quarter of 2013. This reigning in of spend could well prove problematic for marketing departments faced with mounting advertising costs.
As a function dedicated to ensuring optimal value, procurement is ideally placed to help marketing get the most out of its current budget. Despite this, some marketeers remain reluctant to involve procurement. In this context, I have put together a list of five tips to help procurement support marketing.
Shared Objectives, Common Tactics
- Marketing is a distinct category and procurement needs to understand this. Buying creative services within a fragmented media industry cannot be approached in the same way as purchasing office fixtures or machinery. Successful campaigns are often based on original ideas and as a result do not respond well to attempts to standardize initiatives.
- Although marketing should not be approached in the same way as other categories, there are a number of areas where procurement has the experience and tools to add significant value. Examples include pitch management, performance measurement and relationship management. By providing support in these key areas procurement can alleviate the work burden on marketing, enabling the function to focus on its core objectives.
- The relationship which exists between procurement and finance can greatly benefit marketing. This rapport provides not only an objective viewpoint during budget negotiations but also a potential ally when it comes to reinvesting savings back into marketing.
- The vast majority of marketing agencies are SMEs and procurement needs to take this into consideration when designing procedures. Smaller agencies do not have the resources to get involved in lengthy RfP processes or wait months to receive payment. A failure to tailor process for SMEs will greatly reduce the talent pool and value on offer.
- Marketing and procurement need to get together in a room to talk through objectives and assign responsibilities. Relationships inevitably deteriorate when two functions fail to clearly define common goals and solutions. Defining what success looks like for both functions needs to be agreed as soon as possible.
Moving Forward Together
The above tips represent a small selection of the key points to keep in mind when looking to optimise the relationship between procurement and marketing. Each is particularly relevant in terms of moving beyond simply reviewing contracts and suppliers. By implementing the latest solutions and techniques, procurement can help marketing teams greatly increase their productivity within budget and deliver joint benefits.