This summer, the World Federation of Advertisers published an illuminating report about the current state of marketing procurement and how the function needs to evolve to realize its full potential. The report is part of an ongoing initiative led by the WFA Global Sourcing Board. The initiative, Project Spring, is “designed to transform the value proposition of marketing procurement.”
According to WFA, “The vision for Project Spring and the Sourcing Board is that procurement should become the trusted partner of brand investment strategy and play its part in driving the business forward.” (Emphasis in original)
Conducted in the third quarter of 2018, the Project Spring report is largely based on the results of a survey of marketing procurement VPs and directors. Respondents were affiliated with 65 companies representing more than 16 industry sectors. While this survey is now two years old, it is one of the most recent studies available that focuses exclusively on marketing procurement.
The first portion of the report describes several operational characteristics of the survey respondents’ marketing procurement function and addresses how marketing procurement is perceived in the respondents’ organization. The balance of the report discusses how marketing procurement can improve its performance and enhance the way it is perceived both within the organization and by external business partners.
The Operational Attributes of Marketing Procurement
In this article, I’ll describe some of the major survey findings about how the marketing procurement is structured, how it operates and how it is viewed across the organization.
Where Marketing Procurement “Sits” in the Organization
An overwhelming majority of survey respondents stated marketing procurement resides either in an operations/supply chain function or in the finance function of their organization.
Fifty-one percent said marketing procurement reports to operations/supply chain, while 32% noted marketing procurement reports to finance. The dominant position of operations/supply chain and finance does not change regardless of how long the marketing procurement function has existed or how much the organization spends on marketing.
When Marketing Procurement Gets Involved in the Sourcing Process
In this survey, respondents were nearly evenly split when asked when their marketing procurement team normally first becomes involved in the sourcing process.
- 31% said at the budget planning/initiation of requirements stage
- 21% said at the first contact with potential suppliers
- 25% said at the RFI stage
- 15% said at the RFP/commercial structure stage
- 8% said other
There was, however, a distinct pattern based on the reporting structure. Among the respondents whose marketing procurement team reports to operations/supply chain, the largest segment of respondents reported they normally get involved at the budget planning/initiation of requirements stage of the sourcing process. When marketing procurement reports to finance, the greatest segment of respondents said they normally get involved at the RFI stage.
Mandatory Use of Procurement
Eighty-four percent stated their company has a mandate for marketers to involve procurement in sourcing projects. However, the involvement threshold varied significantly.
- No minimum threshold (23% of respondents)
- More than $25,000 (6%)
- More than $50,000 (23%)
- More than $75,000 (3%)
- More than $100,000 (34%)
- More than $250,000 (11%)
Visibility of Spend/Amount of Spend Addressed
Fewer than half of the respondents claimed they have full visibility of their company’s total marketing spend. On the plus side, a substantial majority of respondents are addressing more than half of their company’s total marketing spend. Seventy-three percent said they are addressing more than 60% of the total marketing spend, while one-third of the respondents report they are addressing more than 80%.
How Marketing Procurement Is Perceived
Perhaps, understandably, the participants were highly positive about the contribution marketing procurement makes to the business. Eighty-five percent of respondents agreed marketing procurement drives improvements, and 76% agreed it provides demonstrated value.
These survey respondents were also confident that marketing procurement is viewed in a generally favorable light by other parts of the business. A quarter of the respondents believe marketing’s perception of marketing procurement was extremely positive, and another 62% said the perception was somewhat positive. One-third reported the perception of marketing procurement by their financial colleagues was extremely positive, while another 52% said the perception was somewhat positive.
Survey respondents were less confident about how external business partners view marketing procurement. For example, only 3% said external agency partners perceive marketing procurement in an extremely positive way. Meanwhile, only 40% said agencies have a somewhat positive perception of the function.
This article first appeared in Future of Sourcing here.