Smart Spending at Speed
The demands being placed on marketing departments are growing. Marketing teams need to speed up the process of acquiring advertising services while still keeping the objectives of the organization in mind and minimizing risk.
"Considering the uncertainties in the current socioeconomic environment, marketers are facing increased pressures to elevate performance and meet short- and long-term goals while facing added pressure on budgets and spending," said Customer Advisory Leader and Marketing Consulting Practice Lead, KPMG LLP, Jason Galloway.
A free to download new report from the CMO Council makes the case that smart spending can be achieved at speed through a deeper integration between procurement teams and the marketing department. Through these two departments working together pressures such as tighter budgets, leaner staff, marketing technology, and expectations of increased and tangible return on investments become far easier to manage.
"Think of procurement as a strategic partnership that spans planning, vendor analysis, selection and management, rather than a box marketers need to check in contract negotiations," said Executive Director of the CMO Council, Donovan Neale-May. "A rudimentary level of involvement will likely not generate any significant value for marketing."
The Case for Integration
According to the report, only a quarter [26%] of marketing leaders actively partner with procurement on the identification, selection, and negotiation of marketing vendors, with 71% of those stating that procurement doesn’t understand marketing well enough to continue on those decisions.
However, 78% and 62% of marketing leaders in "very effective" and "effective" working relationships with procurement, respectively tend to involve digital/e-commerce functional groups in marketing sourcing decisions. This higher level of digital maturity can be attributed to the influence of procurement as that is where we are more likely to find marketing sourcing technology in play.
There is clearly therefore an argument to be made for deeper integration between these two departments. Marketing can help procurement better understand its wants and needs while procurement brings its technological expertise to the table and deploys it to assist with media agency selection, ad space purchasing, and negotiations from a position of combined strength.
"Marketers can generate more value through a closer, more strategic partnership with procurement, leading to more robust marketing sourcing, management capabilities, and measures to assess performance," continued Galloway. "In fact, the new CMO Council report shows that the majority of marketers that have an effective working relationship with procurement have greater maturity in digital and could potentially unlock revenue growth through MarTech."
Removing Inefficiencies
Once marketing and procurement are properly aligned, organizations can leverage the combined expertise of this previously disparate departments to increase efficiencies by trimming the fat from the process of acquiring advertising space and other services.
One of the marketing leaders cited in the CMO Council report, stated that, through better collaboration between marketing and procurement, their organization was able to whittle down from 25 separate creative agencies to just three. They were able to eliminate overspending by driving increased business through a smaller number of vendors with which they had greater contractual control.
By reducing the number of agencies being used in this manner, organizations can become leaner and better able to make fast and agile decisions. With fewer moving parts to keep in synch the entire process of marketing procurement becomes significantly faster.
"Marketing should aim to leverage procurement’s expertise to evaluate and select the right agencies/vendors that can provide value to the brand and can align media buying and other activities to the larger business strategy," writes the CMO Council. "Procurement’s knowledge can translate into establishing agreement and better contract management capability that deliver the desired level of transparency."
Nowhere is this more apparent than when selecting marketing technology to further expedite the procurement process. Marketing technology needs to integrate into the stack and support the organization’s overarching digital transformation goals and must not be underutilized, underperforming or redundant. Bringing procurement to the table will provide increased confidence in the marketing technology purchasing decisions being made.
"It is really about playing towards the strengths of each department. Marketing has the expertise to lead the search, and procurement can tap into tools like market polls to provide us expertise on critical topics like pricing, ROI, and integration with the MarTech stack."
Final Thoughts
Deeper integration between procurement and marketing departments will help any organization better manage spend while increasing the speed at which innovations are brought into the stack and the purchasing process is carried out.
The pressure being put on marketing to increase speed and reduce inefficiencies is likely to continue, so savvy organizations would be wise to consider this advice.
Smart spending at speed is certain to be part of the conversation at ProcureCon Marketing 2022, taking place in November at The Westin Rancho Mirage Golf Resort & Spa, Palm Springs, CA.
Download the agenda today for more information and insights.