Trust, understanding and a shared vision is helping marketing and procurement drive transparency, efficiency and stronger agency relationships.
By Charlotte Rogers
Transparency issues, brand safety concerns, fears over agency rebates – all issues impacting the media buying process over the past year. As trust between brands, agencies and media owners becomes increasingly strained, extra pressure has been exerted on the relationship between marketing and procurement.
On the front line between brands and agencies, procurement is responsible for having the difficult conversations which balance the creative input of the marketing team with the desire to drive cost efficiencies. Yet despite being such a crucial relationship, marketing and procurement have not always been the most closely aligned.
From a marketing perspective, much of the scepticism has been caused by bad experiences with people who are “real number crunchers” and try to put creativity on a chart with a percentage against it, acknowledges Coca-Cola procurement director for Western Europe, Tina Kataria.
“Those experiences stay with people. But to marketers I would say, not every person and experience is the same and in the world today the more help you’ve got, the more powerful you become,” she states.
Recruiting people into procurement roles who have prior marketing experience can be hugely beneficial as then both teams speak the same language, says Diageo global category manager for advertising and content, Marie Collings.
“If you are new to marketing procurement, gaining experience in this area is paramount. Shadowing a colleague at work, introducing yourselves to your agencies and fully immersing yourself will prove invaluable,” she advises.
Emma Howcroft, consumer procurement lead at GSK, encourages all marketing and procurement departments to hold a joint strategy session at the start of each year to help instil a “one team” mentality.
“Marketing and procurement can often be sitting on two sides of a fence, driven by opposing objectives: growth versus savings,” she explains. “The best way to achieve unity is to ensure that each team’s objectives are complementary and do not erode what the other is trying to achieve.”
The growing complexity and multichannel direction marketing is moving in means it is crucial to get the marketing procurement relationship right, says Kataria. She argues that with complexity comes additional cost, meaning ROI is more important than ever.
“The way we can scrutinise ROI now and the way we’re being asked to work with our budgets, especially in the FMCG sector, means it has to be far more prudent than say 10 years ago. There’s an evolution towards being able to react fast to changes in the marketplace,” she adds.
To facilitate this close working relationship there is a procurement person in all Coca-Cola Western Europe’s main franchises. The marketing team involve procurement in their daily routine and invite them to attend their meetings.
A similar level of closeness is being fostered at Britvic. Charlotte White, global marketing controller for Fruit Shoot, has been working more closely with Raj Bassan, senior category manager for marketing procurement, since her brand expanded into Brazil, the US and France.
“It’s really important that we work closely together to keep track of the different agency relationships. We focus on the value Raj can bring in terms of the experience he’s got on the other brands like J2O and Drench, and how we as Fruit Shoot can leverage that,” White explains.
“Without partnership between the two functions we would duplicate work across different business units and miss out on those efficiencies. We have that holistic joined up view, which for me is the number one reason we work together and benefit.”
Seeing the value
Central to fostering a close working relationship between marketing and procurement is a recognition of the value both sides can bring.
GSK’s Howcroft highlights procurement’s ability to take a bird’s eye view of the marketing operation, identifying efficiencies and different ways of working which go beyond “standard savings”. She argues that procurement should be allowed to create an ecosystem in which both agencies and marketing teams can work together to deliver objectives, maximise budgets and create brand recognition.
“As a high proportion of marketing budget is spent with marketing agencies, it is crucial that both marketing and procurement work as a single unit to promote creativity and drive value from their supplier partners,” Howcroft adds.
“A unified strategy and ways of working between both departments is fundamental in achieving this and delivering long-term growth for an organisation. Both teams have very different skill sets and combining these can be very powerful.”
Celine Biette-Danielli, principal category manager for agencies, sales and marketing at Vodafone, believes that procurement can be at the frontline of innovation. The key to achieving this is understanding the procurement team’s different, but complementary skills.
“While marketers are focusing on brand results, procurement looks at commercials, but we all have the same goal of delivering value to the business,” says Biette-Danielli.
“The value that procurement can bring is in increasing effectiveness and efficiency through the value chain, and in the process help marketing maximise their budgets.”
This opinion is shared by Collings at Diageo, who sees procurement creating opportunities to maximise brand investment, build sustainable relationships with agency partners and manage marketing spend effectively in a way which mitigates risk.
“Value comes in many forms and a key value contributor is the strategic point of view that can be provided when marketing and procurement work together. It is not just about cost savings and compliance, but how we drive the business agenda through strategic initiatives,” she adds.
“It is often the case that individuals within the marketing procurement team will have previous experience in marketing. This, combined with the commercial skills developed when working in procurement, mean we are able to unlock opportunities that enhance value and bring with it innovative commercial thinking.”
Procurement must gain a rounded understanding of the marketing agenda and the kinds of metrics the marketers are being measured on, which could even mean procurement changing some of its own KPIs.
“We’re looking to link our results based on what marketing’s goals are,” says Coca-Cola’s Tina Kataria. “So there is a feeling that we really share the same goal. All those things drive collaboration and drive a natural fit.”
At Britvic, appreciating the contribution from both sides is helping improve the way marketing and procurement approach their work. Bassan, for example, believes he is now better placed to negotiate stronger commercial deals because he knows exactly what the marketer’s brief is and what their end deliverables are.
“There’s nothing worse than me going into agency conversations not knowing what we want the end result to be. So it’s about being approachable, winning together and openness,” he adds.
From a marketing perspective, White has benefitted from the frame and rigour Bassan brings to conversations, adding what she describes as a “new level of robustness”.
“We talk a lot about return on investment being really important, efficient ways of working and actually there’s a really important point about the quality of the work, which has really step changed. That’s partly driven by the close working relationship we have and the pride Raj takes in the end output,” says White.
Like any good relationship, trust is a key component. However, trust has to be earned and usually only comes after working on a project together, according to Kataria.
“If you’re competent, someone will say ‘this person is good at what they do’, but they won’t necessarily trust you,” she explains.
“I could talk about how I understand what the marketing team are trying to do, but until someone believes you’ve got their best interests at heart and you’re on their side, the trust doesn’t come. I think you only get that through doing things together.”
Biette-Danielli agrees trust and mutual respect are the basis of a healthy relationship between marketing and procurement. She advocates constant communication, early engagement and the procurement team having the right skills to support marketing’s goals with clear commercial objectives.
Partners in challenging times
Trust and full alignment is helping marketing and procurement weather the storm in a challenging media environment characterised by a lack of transparency, fears of digital ad fraud and ongoing brand safety concerns.
Kataria acknowledges that the way the media business model has evolved does not lend itself to transparency, although healthier conversations are taking place both agency and client side. She believes marketing needs to get back to a place where brands have a robust understanding of how the advertising value chain is working.
“We have information that says we haven’t had the most transparency in the past, so let’s be grown up and say unless we get that trust back we’re going to have to find a way to measure how much we are getting and unfortunately that’s costing all of us money,” says Kataria.
Working closely with marketing has enabled Britvic’s procurement team to create a strong agency ecosystem with roles and responsibilities clearly defined. At GSK the team has recently implemented a new agency ‘collaboration’ model in a bid to nurture a close, clear and supportive environment. The procurement team are also building their understanding of the context and usage patterns of the digital media market.
When it comes to digital, Kataria advises procurement to find an unbiased expert in the field who can help them define the objectives they are trying to achieve, giving them the knowledge needed to ask the tricky – but necessary – questions.
She argues that the most important thing is for procurement to gain credibility with the marketing team by positioning itself as a partner in the digital landscape, showing that the function is not pulling in a separate direction.
“Most businesses and functions are set up with healthy tensions, because there are checks and balances to keep everybody looking at the whole picture,” Kataria concludes.
“But I sincerely believe when you’re working together across functions your first point of understanding should be ‘what does the business need?’ and how you measure it should be second, because then it drives the right behaviour.”
Source: Marketing Week