The CPO's Corner
How can Procurement make an Impact in Marketing?
If you want to make an impact in Marketing, set aside the measurements and achievements that have made you successful with direct or indirect materials. The emphasis here is different, and the procurement professionals who are successful in this space recognize that.
Be smart. In a manufacturing company, people will follow your lead in purchasing machine parts and materials from the suppliers designated by procurement. It’s all about quality, reliability, and repetition - every folding carton, every closure or label, must be identical so that the supply chain will function smoothly.
But Marketing is a different animal. Unless your company has a Burning Platform focused on reducing spend, the worst thing you could do as a procurement professional is to walk in to the Marketing team and start talking about supplier consolidation. It’s not about the cost reduction, its about optimizing the “reach” for the investment in a marketing campaign. Your Marketeers don’t want repeatability – they want the creative spark that will help the target demographic see your company’s product or service as superior to competitors. In ad agencies and creative spends we want the “wow” factor –the advertising or social media campaign that’s going to make a difference.
It can be a tough switch - especially when you’ve been very successful in other aspects of spend. And no one is likely to hand you the task of renegotiating agency contracts right out of the gate. But even if your background has been in more traditional areas of procurement, there are some skills you can leverage to make an impact quickly. Marketing as a unit tends to have higher staff turnover than other parts of the business, and because of that there can be low hanging fruit. Here are some ideas for starters:
- Ensure contracts are in place with agencies and other service providers. Not always the case, especially when people bring supplier relationships from past jobs
- Clarify those contracts, documenting who is responsible for each piece of the process. Creative agencies usually have overlapping service offerings and ensuring that clear scopes of work are in place will reduce duplication.
- Implement SRM: just like in other areas of your company, a regular review process forces accountability both on the supplier side and on the company side.
- Understand what your agencies are doing themselves and what they are outsourcing to third parties – maybe an opportunity to decouple, go direct to the subcontractor, and eliminate a markup.
- Help implement a Digital Asset Management process.
Success on some of these can be a great way to gain a foothold, grow your credibility, and create a great foundation for taking on more complex and strategic projects.
Joanna Martinez is a global procurement / supply chain leader and the founder of Supply Chain Advisors LLC. She is a frequent lecturer and blogger on procurement topics and also provides coaching, strategy development, training, and cost reduction opportunity assessment. Her clients range from Fortune 100 companies to technology startups.
As either regional or global CPO, Joanna has led transformation initiatives for companies in many different sectors: among them Johnson & Johnson (consumer products), Diageo (beverage), AllianceBernstein LP (financial services) and Cushman & Wakefield (real estate services, property management). She has also held client-facing roles, effectively giving her the opportunity to “sit on both sides of the table”.