Delivering Value with Today's Marketing Supply Chain
Marketing procurement used to be a driver of cost savings. Procurement professionals who could find the most affordable agencies to do necessary marketing work were recognized for their ability to keep procurement costs low and deliver value at a low rate.
But cost savings alone are no longer the sole purpose of the marketing procurement function. Affordability, ROI, and a discerning approach to selecting marketing partners are all important, but to truly deliver value, marketing procurement leaders must be able to identify agencies and other vendors who can deliver quality work above all else. Increasingly, marketing procurement is also a key proponent of identifying viable partners and marketing technologies for the business.
Today, the procurement function must create partnerships with both internal departments and external vendors to fully leverage the marketing supply chain. Here are a few steps the function can take to deliver move value.
Partnering with the IT Department on Marketing Technology
At many organizations, procurement has risen to the level of a strategic partner in that it collaborates with other functions to help generate a strategic roadmap for the business. But according to a PwC study, more than 50% of leaders in high-growth private companies agree that their organization's procurement function doesn't always work as a strategic partner to the overall business.
Becoming a strategic player requires the function to partner with other departments on the specific tasks that fall under their purview. For example, procurement often partners with finance to work on spending and cost issues. Likewise, the procurement function must be able to partner with the IT department to make decisions about marketing technology.
The IT department is typically in the best position to assess the viability of new technologies for the business. This is true of operational technologies, but it is also true of marketing technologies like automation software, cloud-based services, analytics tools, and even advanced deployments like AI programs.
While procurement plays a leading role in vendor selection based on its intelligence, the IT department can play a leading role in identifying which vendors are suitable based on which technologies they bring to the table. Likewise, if the organization intends to onboard any marketing technologies internally, the IT function must help to assess the risks and benefits of those contracts.
Providing Value Beyond Savings
Procurement has shown that it has the propensity to deliver value to the organization beyond savings and cost reduction. The function often serves as a gateway to innovation. It can take advantage of the capabilities of suppliers to improve the organization and even drive change.
This is also true of the marketing procurement function. The marketing supply chain can provide value directly and indirectly to the business by generating leads and customers as well as by helping to retain existing customers. Procurement professionals should assess marketing vendors based on presented business cases that demonstrate how they provide value to other organizations.
Inevitably, every partnership with a marketing supplier is based on ROI. Suppliers that can provide a substantial ROI to the business must be prioritized above others if the function is to continue delivering value to the organization.
Using Analytics to Measure ROI in Real-Time
After partnering with the IT department to source analytics tools, procurement can measure the results of its marketing partnerships in real-time. These tools can also increase transparency into the organization's marketing spend and ensure vendors are complying with established SLA's and other requirements.
Ideally, the organization will be able to track—dollar for dollar—how its marketing spend translates into revenue. As marketing has grown increasingly complex, this can only be accomplished with the right analytics tools in place. The results of marketing initiatives like paid advertisements are generally easy to track, but B2B businesses that have long-running marketing and sales cycles need robust analytics to identify how their vendors' efforts deliver revenue.
Building Strategic Partnerships with Marketing Vendors
Finally, the procurement function must be able to identify the potential for strategic partnerships among the company's marketing vendors. Even partnerships with individual suppliers, like freelancers, can keep the marketing supply chain resilient and ensure excellence in the long term. Keeping a pool of creative talent at the ready can help the company should it need to scale up any marketing initiatives.
Once viable partners are identified, procurement can utilize their vendors' full capabilities to deliver even more value. Robust relationship management programs may be necessary to maintain these partnerships, especially at larger organizations.
Delivering value with the marketing supply chain is set to be a hot topic at this year's ProcureCon Marketing conference, taking place this December 6th to 8th at the Hyatt Regency La Jolla in San Diego, CA.
Be sure to download the agenda for more top insights and challenges facing the industry today.