Why Marketing Procurement Is Central to Future Business Success

The global health crisis put many business teams under pressure but one group that has had to work particularly hard since the start of the Covid-19 pandemic has been procurement. Across the globe, all procurement teams have been hard at work, but for this article, I would like to focus on marketing procurement.

From the start of COVID-19, as we saw events canceled, marketing procurement had to step up and re-negotiate the money already spent on corporate, industry and world events. This was a significant moment for procurement – one where it could fully demonstrate its value and input at a crucial time for all businesses. The marketing procurement team’s role in negotiation, consolidation and ultimately cost savings or cost avoidance was now critical to the very existence of the company they worked for.

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While marketing procurement was focused on stabilizing the marketing spend, many other changes within the marketing space were also taking place. The almost instant leap to online shopping and ecommerce took many by surprise. With rapidly changing buying habits, brand messaging and content development required different skills from their agencies. But add into the mix the fact that work structures shifted to remote working with a greater reliance on video conferencing and this opened up greater access to worldwide talent, catapulting creativity into a global business.

Finally, programmatic buying went from being a relatively small nuisance from a compliance and transparency point of view, to absorbing a huge amount of marketers’ spend. It meant they needed a better understanding of the working dollars and further insight into the digital value chain.

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So, what happens now? What is the best way forward for marketing procurement?

We see a huge opportunity for procurement to retain their seat at the table – in a business advisor role. Marketing procurement will be instrumental in taking all this “chaos” and helping their organizations make sense of it and implement a new way forward. Most companies will need to reassess which types of agencies they need to have as strategic partners, and which will become their lead partners. Here, analytical approaches such as benchmarking, commercial agreements, transparency, and great corporate governance will help organizations start afresh with new and existing players. The old school way of doing business can be challenged and we can begin with a clean sheet of paper. In our latest study, commissioned through industry player Procure-Con, we asked 100 procurement executives in North America about the changes that covid had on their marketing spend and strategy. All but one of the 100 executives we interviewed said they had implemented or plan to implement large scale marketing reviews and assessments in the next six to twelve months.

To add another layer – finance and company leadership will continue to focus on minimizing all possible risk in the value chain. And marketing needs the help of procurement to deliver on these KPIs.

Ultimately, having up-to-date contracts in place between parties will allow organizations to be better prepared for future events that may impact us as Covid did during the last 15 months. While in the early days of the Covid pandemic, procurement teams were focused on aligning the cost structure to lower sales, now they can work across the broader business requirements of driving value, transparency, and commercial adherence.

Marketing procurement teams will be a driving force behind corporate digital transformation as they will be the prime users of go-to-market sales and marketing tools. Looking at research published by McKinsey*, 62% of the respondents** said that they will conduct more than 50% of the purchasing journey online. The online tools will drive an explosion in access to information and we believe marketing procurement will be well set up to become the truth-teller in organizations, acting as the gatekeepers to information overflow.

Marketing procurement will need to become even better educated within their field of expertise and we believe communities such as LinkedIn groups, trade or industry organizations will see a surge in members and educational requests.

Looking to the future, it is now time for marketing procurement to become the 360-degree business advisor to the organization when it comes to a truly commercial (not savings, not control, not legal) plan for marketing.

[To share your insights with us, please write to sghosh@martechseries.com]