Marketing procurement is a rapidly evolving discipline, and its role within the overall marketing organization is growing and becoming more and more vital.
There were many topics discussed, but the following four resonated with me:
1. Marketing procurement is getting more involved in the day-to-day and it’s a good thing
For too long, the agency client relationship, especially when it came to media, was like a vast wasteland of unknowns and mistrust. Agreements and formal contracts lacked the rigor needed to ensure both compliance and the tracking of performance, and marketers lacked the experience and skills to determine how to alleviate the unknown. This led to mistrust, conflict, and ultimately in some cases a review of a relationship that deserved better.
While many would complain that procurement’s involvement has led to too much work and reporting requirements from agency resources, I would argue that the rigor and data Procurement brings, through appraisals, scoping rigor, contract reviews, and other quantitative and qualitative processes allows for greater transparency, which should lead to more open and transparent dialogue about how both sides can improve.
Marketing Procurement is now moving to a focus of "value" not "savings"
On day one of the conference Steven Dubroff, head of Strategic and Innovative Sourcing at Hilton said during a panel: "Savings is a by-product of Procurement". It was my favorite quote of the conference. Why?
In years past, agencies and other partners would go running when they heard they were going to have to meet with procurement as it almost always meant they were going to be asked to cut their fees. No longer.
Dubroff and the other panellists made it clear that savings mandates were fewer and fewer, and their level of engagement was designed to ensure that the company was deriving true "value" (strong ROI, more innovative ideas, more efficient media spends, and more) from their agencies and other partners.
3. One of the biggest challenges marketers and their procurement partners is the determination of how much scope can and should come in-house
Antonio Humprey, the impressive Senior Manager, Global Procure to Pay at Adobe, said: "We are growing and still sorting out how much should be in-house and how much should be outsourced to agency partners."
As more and more companies try to determine the answer to the question of whether to in-house or not, the conversation at ProcureCon was about the importance of a thoughtful, strategic process when it comes to analyzing the pros and cons of bringing scope in-house and committing to internal capabilities.
Flock has helped multiple organizations work through this issue, and we recognize the tremendous investment this represents. Hence our process for deriving input from all key stakeholders (including on occasion agency partners) in developing a highly strategic, long term plan (we think the plan should look three to five years in the future) that addresses the people, process, and platforms necessary to successfully in-house.
4. "Trust" is still an on-going issue between marketers, procurement, and their agency partners
Throughout the conference there was overt and subtle references to a lack of ‘trust" in agency partners. This has been perpetuated by the media scandals of the past few years, and a lack of what many would say is a lack of historical transparency in the business.
I had one procurement executive, whose company has worked with their agency for over 40+ years and has recently won several industry awards for their work, say that he still doesn’t think the "agency is completely straight with us".
At Flock Associates, we believe the way to cut down on mistrust and build more open and collaborative ways of working is by enabling each party to have access to and discuss collaboratively data driven insights that allows for both opportunities for improvement and calls out where there have been success.
We believe a great start to addressing the issue is 360 degree Agency Appraisal, which allows the client to appraise the agency, and vice versa.
Only by having these open and transparent discussions can partners feel comfortable that they have a full view of how to drive greater value and better performance into the relationship.
So that’s a wrap on my thoughts on ProcureCon Marketing 2019. I look forward to working with marketers to address these and other issues in 2020 and beyond.
Mitchell Caplan is U.S. MD at Flock Associates