Marketing Spend — The Straight Dope From the Spending Culprits (Part 1)

It's extremely refreshing to find information authored about a procurement topic from the perspective of a line business manager or executive. So much that I talk about on Spend Matters and others talk about on different information and analyst sites comes from the perspective of the procurement or supply chain executive or finance, if we're lucky. But hearing the voice of the customer from an actual business user can be tremendously helpful to understand what they value and the best means of engaging with them (BTW ... the "spending culprit" low-blow in the title of this column is just in jest -- their spending really is essential). What's doubly refreshing, though, is to listen to this voice when it's coming from other business representatives in a fast growing category that is increasingly coming under the purview of procurement. Such is the case of marketing spend, a topic which Advertising Age tackled in an article earlier last week.

Why do I find the topic of marketing spend so critical to get insights on? For one, procurement is not only increasingly managing it -- and this article is validation of that -- but also that marketing spend often represents a range of complex services that do not fall cleanly into existing categories we often manage. Even though it is different from managing contingent labor, marketing spend is clearly a service that procurement buys (whether you describe it as part of the services procurement equation I'll leave up to you and your own set of semantics and definitions). It's also similar to sourcing legal, print, outsourcing and other categories that also fall into this general bucket of non-contingent services spend because all of these categories should require specialized domain knowledge and, ideally, the right set of enabling technologies to manage their lifecycle for lowest cost and best service.

With that as a backdrop, I'll share a few of the findings and musings from the article (it's rich with key takeaways). First, it's refreshing to know that as procurement executives, we're doing our job capturing more spend, including that of the marketing department. We need no further evidence of this than the fact "agency executives are decrying the power of procurement executives, fearing that as the discipline grows, marketing -- already struggling to prove its value in an age obsessed with return on investment -- could see quality nickel and dimed to death." This last point withstanding -- most marketing people don't understand that Spend Management is more than just nickel and diming -- the initial observation is telling indeed of the perception of the job we're doing from marketing spend customers in the business (i.e., Accounting are the 'bean-counters', now we're the 'nickle and dimers').

What's a bit more telling is how these folks view our efforts which is clearly more akin to Dilbert-esque buying than true strategic sourcing. To wit, "Often, the assumption is that buyers of widgets and office supplies have been retasked to buy agency creative work ... As it turns out, those notions aren't far off the mark. An Advertising Age review of LinkedIn profiles of hundreds of marketing procurement people found that only a small handful, fewer than one in 10, list prior experience in marketing or agencies or even marketing degrees in college." At least the article goes on to list some exceptions to this rule, however, I think it's important to not mistake professional marketing procurement experience with having worked in the industry or gotten a degree in it. I for one, have no formal business background in marketing, yet have been advising companies in this area for close to a decade. Nor have I ever taken a single marketing course.

Still, we should take the point that relative to direct materials procurement where it's quite common for practitioners and category managers to come from engineering or other similar disciplines in the organization, in many indirect and services spend areas, such experience is often lacking. But there are many ways to make up for it. Which is something we should all think about because there's a business need for us to get more involved in this area given the fact that " shows a sharp increase in job listings for marketing procurement and sourcing candidates since the first of the year [of their analyzing this area]".

Stay tuned for further analysis of this article and some insights on the subject later this week.

Jason Busch

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