Media Buying – the Devil is in the Dettol (sorry…)

We’ve been strong advocates here of advanced sourcing processes and technology – “market informed sourcing” (MIS) as we call it, including writing two research papers which are still available here and here (free to practitioners on registration).

Use of MIS is probably most prevalent still in the transportation sector, where it can cope with the complexity of buying multiple transport routes, different carriers, load sizes and so on. But we came across a new example of its use recently that demonstrated the potential for its application across a wide range of sectors and spend categories.

Dettol - a huge global brand

Reckitt Benckiser (RB) are a huge household, health and personal care company – one of the very largest in the world, and very successful over the last 10 years or so in terms of impressive growth in pretty mature markets and sectors. And I certainly didn’t know that Dettol is their largest global brand – in the UK it is known as a personal care and household cleaning brand, but in many countries apparently the brand includes variants such as shampoo, bodywash, shaving cream and soaps.

I recently met Bill Reese, who runs media buying for the firm, and has worked with CombineNet, providers of advanced sourcing software, to develop an approach to media buying that has proved highly beneficial. Reese himself comes from the media side of the industry – another good example of the “poacher turned gamekeeper” procurement professional we often see in complex categories like this, who often do a great job as they take advantage of their detailed market knowledge.

My mention of “detail” in the title was not purely in the interests of a pun – talking to Reese, you get a sense of how complex media buying is for a firm like RB. Consider how many brands they own and advertise; how many countries they operate in, how many different media options there are (different types of media, multiple TV channels etc). Historically, procurement would inevitably be disaggregated, because trying to approach it as a single exercise would be simply unmanageable. Getting visibility into what is purchased, at what price, with what result, was a real challenge.

But using the CombineNet ASAP online platform allows Reese to look at the entire global media spend in a co-ordinated manner. Every year, RB run a single huge procurement exercise, with media agencies and providers from around the world bidding for their share of the total pie. As CombineNet puts it:

“The robustness of CombineNet ASAP provided RB with the platform they needed to manage such a large and strategic undertaking. The ability to collect multiple pricing options enabled the media agencies to propose media buys with varying frequency (how often the audience would be touched), coverage (the number of audience targets covered), channel splits, and station options to support the media goals of the brands. ASAP easily manages large data sets, supporting RB’s global sourcing initiative including media buys across 60 countries/territories, enabling them to collect and analyze bids from agencies across all of their markets in a single, multi-faceted sourcing event”.

“Some agencies really found this difficult at first”, Reese explained. “But once they realised we were serious about it, the vast majority now participate”.

It’s another excellent example of how advanced sourcing / MIS is slowly but surely being picked up by organisations and procurement people, and not just for transportation spend. Anything where there is inherent complexity, and a large number of potential supply options is at least a candidate for considering this sort of approach.

And we all know that procurement people and functions often struggle to get a grip of complex service categories such as marketing and media within their organisations. We’d suggest that understanding how technology options can help the organisation achieve better value in these areas is one way in which procurement itself can demonstrate value to marketing directors and executives.

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