Earlier this year, the World Federation of Advertisers (WFA) published an important report on the current state of marketing procurement. The report is part of an ongoing initiative called “Project Spring” that is being led by the WFA Global Sourcing Board. The Project Spring initiative’s goal is to “transform the value proposition of marketing procurement.”
The first portion of the WFA report describes the results of a 2018 survey of senior marketing procurement executives that examined how marketing procurement functions are structured, how they operate, and how they are perceived within the organization and by external partners. The balance of the report focuses on what marketing procurement professionals need to do to increase the value they create for the business and enhance the perception of their work.
Based on the survey results and several subsequent workshops involving groups of marketing procurement professionals, WFA identified four categories of challenges that must be addressed in order to enhance perceptions of marketing procurement—process, people, performance and partners.
In a poll conducted at last year’s ProcureCon Marketing London conference, more than a third of the audience indicated these four groups of challenges were equally important to address. The remaining two-thirds of attendees were fairly evenly split on the importance of each category. Twenty-two percent gave top priority to performance, 16% to process, 14% to people and 13% to partners.
The challenges WFA identifies are all important, and I plan to discuss each of them. In this article, I’ll address the process challenges and WFA’s recommendations for navigating them.
The WFA survey identified several operating characteristics of marketing procurement that are associated with a more favorable perception of the function. For example, survey respondents indicated their business colleagues were more likely to recognize the value marketing procurement can deliver beyond just cost savings when:
In discussions with WFA, marketing procurement professionals were emphatic they could deliver value to the business at all stages of the sourcing process and that early involvement is key to maximizing the value procurement can create. Therefore, WFA recommends marketing procurement professionals should strive to become involved early in the sourcing process and maintain their involvement at all stages.
Senior Management Mandate:
The 2018 survey found that having a mandate from senior company management to involve procurement in sourcing the products and services required by marketing was strongly associated with a more favorable view of the function if the threshold for procurement’s involvement was set at a low spend level. WFA recommends marketing procurement professionals should seek to obtain a mandate from senior leadership or expand the mandate if one already exists.
However, WFA points out that a mandate can be a double-edged sword. If procurement is successful in persuading senior management to create or expand a mandate and then doesn’t deliver increased value, procurement likely won’t be given a second chance. Therefore, marketing procurement leaders must be certain their team has sufficient bandwidth to manage the expanded role.
To identify opportunities for value creation, marketing procurement professionals must understand where and how marketing dollars are currently being spent. The more comprehensive that understanding is, the more likely it is procurement can identify ways to create business value. Therefore, WFA says procurement professionals should work toward obtaining accurate and comprehensive information about total third-party marketing spend.
Clearly, procurement’s ability to create value for the business is directly related to the proportion of total third-party marketing spend that it is involved in managing. As such, WFA recommends procurement professionals seek to increase the level of marketing spending they are addressing.
The COVID-19 pandemic has created challenging conditions for many business enterprises, and it has elevated the importance of maximizing the value produced by every dollar of marketing spend.
As we near the end of 2020, there is hope an effective vaccine for COVID-19 will soon become available. However, even with a vaccine, it will still be critical to optimize marketing spending in 2021.
These circumstances have presented marketing procurement with a unique, if unwelcomed, opportunity to demonstrate how it can deliver value to the business. The WFA recommendations outline an effective strategy for meeting this challenge.
This article first appeared in Future of Sourcing here.