Is Marketing Procurement Dead? More Thoughts From Our Webinar

During our recent webinar with 4C Associates titled Is Marketing Procurement Dead, Milan Panchmatia of 4C and I looked at the reasons why certain complex services spend categories are a particular challenge for procurement - see our previous article here for more details.

Factors such as the dynamism of the markets and the closeness of suppliers to our internal stakeholders mean that procurement has to work hard to carve out a role for itself. In addition, I argued during the webinar that certain recent developments have exacerbated the challenge. Technology means that stakeholders in an area such as marketing can be more expert, more quickly, about the market and suppliers, and more user friendly systems allow users to carry out activities that previously might have been handled (with the users' blessing) by procurement.

So what can procurement people do to make sure their category does not become "dead" from a procurement involvement point of view? Here are some of the thoughts and ideas from Milan and me that emerged in both the formal part of our presentation and in the discussion and Q&A we got into after that:

  • We have to develop real knowledge about the category - having said that, our stakeholders can also gain knowledge more easily these days, so we should and must try to remain a step ahead.
  • Procurement must focus on adding value, and not be obsessed with unit cost reduction - a meaningless concept in many marketing sub-categories and certainly not the driver for many marketing executives.
  • We need to recognise that a spend category such as marketing services is composed of many different elements, which will require in themselves quite different approaches and strategies. Buying direct mail is a world away from “programmatic” buying of internet exposure.
  • Procurement can bring specialist skills in areas such as understanding of commercial models (how to construct effective risk / reward contractual frameworks, for instance, or using lean / six sigma principles).
  • Don’t be afraid to make use of external knowledge and experience, whether that is via advisers, benchmarking, or talking to peers in procurement.

You can download the slides from the webinar here, and do keep an eye out here and on the 4C Associates website for more on these topics around procurement of marketing and other complex service categories.

4C also runs a survey panel, and if you complete a few quick questions here, you can be part of that ongoing initiative and gain valuable insight into procurement industry trends and developments.

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