Intel Drives Marketing Efficiency – Highlights from ProcureCon Marketing

If you thought Intel was simply about chips in your computer, think again. Sean O'Sullivan, Global Director of Marketing Procurement at the firm, presented at the recent ProcureCon Marketing event in London, and told us that as well as the firm’s involvement in “the Internet of Things” and other exciting developments, their data centre business is now the most profitable element of the business - I certainly didn't know that!

O’Sullivan took us through their Marketing Efficiency Project, which has looked at all marketing activities, structure and processes across Intel.  Many different areas and geographies within Intel had moved to a more diverse marketing and brand model over the years, then the new CEO asked procurement and marketing to optimise spend and cut the supply base in half. The aims were to address a perceived lack of brand consistency and focus on core brand messaging – as well as assuring value for money.

The role of marketing procurement initially involved an analysis of spend by sub-category, business unit and geography. There was over a $ billion in marketing spend, but it was very fragmented. The data showed that spend was very diverse - pretty much very marketing group had a different creative agency (or agencies). Above the line TV spend was handled centrally, but everything else was inconsistent. There were no less than 3000 agency-type suppliers including 1600 who "touched the brand" quite directly.

The Chief Marketing Officer (CMO) responded well to the data, and that helped to drive consolidation, which in turn lead to increased efficiency through dealing with fewer agencies. Procurement rationalised the supply base from that 1600 to 600 in 12 months, start with low-hanging fruit, but also via some strategic sourcing work. Procurement looked to segment the work sensibly and consolidate where appropriate. A limited amount of external consulting support was also used to provide some external benchmarking and research to support the sourcing work.

Procurement has now put in place a "guided shopper "system which helps the marketing users understand what each supplier does.  Procurement and finance have “blocked” new suppliers and put in place an approval system for new agencies – all such applications go to CMO.

As O’Sullivan said, “we’ve been trying to achieve some of these things from within procurement for five years - but the backing of CMO has made all the difference”.  And business decisions have been taken to remove money from local budgets and bring it back into the centre to drive key marketing activities. Indeed, the CMO also introduced a more centralised structure in marketing generally.

So what are the lessons that other organisations can learn from the Intel experience? Here are O’Sullivan’s three key take-ways.

- “Procurement can shine a lens across the enterprise better than any other function” because of the breadth of our role.

- “Our data is a strategic asset” - but it requires investment and capability to make it so and ensure it is used to drive value.

- “Executive sponsorship is paramount to make strategic progress”.

I suspect these are not totally new messages to many in the profession – but this was a strong case-study that highlighted how benefits in the marketing spend area really are achievable when an organisation focuses on those good practice principles.

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