The subject of procurement and marketing is nothing if not contentious. I’d love to! was the response from procurement professionals when asked if they’d like to contribute to this feature, and muse over the thorny issue of procuring marketing services.
The shrill, almost blood-curdling, enthusiasm seemed to come less from a desire to share ideas, than from the relished prospect of getting one over on marketers; finally giving it straight to the bully boys. Like Columbine, but with less bloodshed, this felt like the revenge of the nerd.
While marketing is viewed as the sexy, creative, devil-may-care Adonis of the sixth form, procurement is the spotty bookworm with itchy trousers.
Marketing views procurement suspiciously. It’s simply about driving down costs, screwing the suppliers and working within rigid parameters that stifle creativity.
Procurement sees marketing as aloof and lacking in demonstrable results. These guys are wastrels who spend with impunity and lack any real business acumen. They’re more concerned with their expense accounts than the company’s bottom line.
It was once a rare thing to see marketing and procurement working together, but times are changing. In a culture where every area of business is being scrutinised, marketing hasn’t escaped. Increasingly, procurement is involved in securing marketing services as well as the nuts and bolts.
The growing role of procurement in marketing has created some problems and a certain amount of animosity between the two camps; both of whom feel they have been treated harshly. But if procurement of marketing services is now a business reality, how can these former rivals find common ground and work in each other’s best interests?
Received wisdom has it that procurement and marketing don’t get on because they are in business terms diametrically opposed. One is about selling, the other about buying. One views marketing as an investment, the other as a cost. But there are a few lone voices that while appreciating there is some cultural divide argue the real schism is structural.
Everyone in the industry is aware that there has been a conflict between these two groups in the past, says Melissa Thorpe, lead consultant at procurement consultancy QP Group. A lot of that is down to how organisations have been structured. Traditionally, marketing reports directly to the CEO while procurement reports back to finance.
According to Thorpe this means both camps are playing the same game but to slightly different rules. Much like the rival codes in rugby, the respective camps like to think they’re further apart than they actually are.
There’s more common ground here than many would like to accept. Marketing, in the current economic climate, is feeling the pressure. It has to demonstrate ROI, it has to show how it’s reaching its customers and how sales are increasing following X amount of spend.
Thorpe says that is no different to the questions being asked of procurement. It could be worded slightly differently, but essentially we’re being scrutinised on how we’re getting value for the company.
And the similarities don’t end there. Thorpe argues that many of the skill sets also cross over. Marketing has been using a lot of the tools we rely on in procurement, they just don’t realise it. The pitch process is very close to supplier selection, something we do on a daily basis.
The difference is merely in how these tasks are tackled. Marketing may send a tender out and see what comes back, trusting their intuition. Procurement may be a bit more academic about it and look in greater detail at the finance, Thorpe adds.
Despite Thorpe’s claims, there are many within the marketing community who eye procurement suspiciously. They claim lack of imagination, tunnel vision on the bottom line and an inflexible approach to marketing.
Larraine Corbelli-Withey, commercial director at Moonfish, says, Marketing isn’t evaluated in a value-driven way. Procurement selects agencies without grasping the longer term brand value considerations, which are the very things that drive up shareholder value. I can’t understand why procurement doesn’t see this. Who doesn’t want to create shareholder value?
Richard Bush, director at Base One, adds that procurement often lacks an awareness of the subtler, more nuanced aspects of marketing.
I think it’s a bit blinkered to claim these guys don’t understand creativity, we’ve worked with some great procurement officers. However, I don’t think they understand marketing and the very, very close relationship that is needed between an agency and a client.
In Bush’s estimation, this leads to decision-making borne of subjectivity rather than real understanding of the issues. Procurement can look at a pitch from two different companies. Company A can do the work for £500,000 while Company B quotes £1million. What procurement won’t see is that Company B offers regular brainstorming sessions, joint working activity and all the other things essential to ensuring the relationship works to everyone’s advantage. Procurement simply looks at time and money. That’s a real danger.
Marketing has always been viewed as something of a black art notoriously difficult to scrutinise and evaluate with any degree of certainty. It can be of no surprise that when a discipline as concerned with balance sheets, cost-benefit analyses and improving margins as procurement starts getting involved, feathers are ruffled.
However, the crude assessment that procurement doesn’t understand creativity and marketing seems too convenient. No one likes to feel they are being imposed upon. No sector wants to be held to account. It’s much easier to parody procurement than it is to listen to some painful truths and learn.
From my own private experience as marketing director at Sony, says Paul Duncanson, managing director at Creativebrief, marketing has always been our private bailiwick. The attitude was that bean counters wouldn’t understand what we do. The fact is that quite often we didn’t even have formal contracts with agencies or suppliers. This, rightly, horrifies procurement.
Marketing shouldn’t kid themselves that procurement only cares about what can be shaved off. Cost is a consideration, but so is quality and effectiveness, he says.
We noticed there was a knowledge gap about four or five years ago, says Liz Cullen, PR Manager for the Chartered Institute of Purchasing and Supply (CIPS). Purchasing was increasingly being asked to get involved in marketing. Our members soon told us that it was an area where they felt they needed advice and guidance.
Since then, CIPS along with ISBA and other trade bodies has done a lot to educate both sides. There are regular conferences, seminars and training. Moreover, the commentators are seeing greater convergence between marketing and procurement, with increased recruitment activity and improved co-working.
According to Cullen, there are an increasing number of specialists in this area. Tesco has just recruited someone whose sole responsibility is to purchase marketing. Nothing else. On top of this, agencies are recruiting procurement people to work alongside the creative partners.
Contracts and service level agreements are exactly the areas in which procurement’s presence can really bolster marketing. While creatives might like to caricature purchasers as dry, humourless souls, it might be instructive for marketers to know they are equally lampooned for being dizzy, skittish types who swoon over whizzy logos but don’t understand margins.
But once the name-calling settles down, the serious business of business remains. Procurement’s presence at the table is almost a given, so how can this help rather than hinder marketers?
If you have a procurement person there right from the beginning it irons out all of the wrinkles that you get when moving the project forward, explains Carolyn Stebbings, managing director of FCBI London. You can get a menu of costs that procurement has agreed to. The marketing team can then look at this and see the costs and objectives we’re working toward.
The agency too is perfectly clear about the stated aims. Suddenly you’ve got rid of all those irritating misunderstandings that have a tendency of cropping up, she adds.
Procurement also has a vital role to play once the contracts have been signed and the relationship is underway. The head of marketing will want to maintain good relations with the head of an agency, but things don’t always run according to plan. When problems arise, it is not uncommon for both parties to feel uncomfortable about how to tackle the issue.
We’re not interested in owning a relationship, says Thorpe. But we can help maintain good relationships by acting as a mediator. Where there are difficulties, marketing can come to us and explain the situation. We can then work with them to develop strategies to solve the problems and get the project back on track. This is the sharp end of the business that we work in all the time; it makes sense to utilise these core skills.
But perhaps the area where marketing really underestimates procurement is as its most useful ally. Marketers can wail all they want that procurement doesn’t understand marketing, but evidence suggests that marketing is actually far more ignorant of procurement.
Marketing has become arrogant, says Matt Butterworth, managing director at Folk. They think they know everything. A lot of marketers take it for granted that procurement don’t know anything but that’s not the case at all. Marketing just doesn’t do enough to understand this side of business. If it did, it might just find its own power within an organisation greatly enhanced.
Procurement can, and should, strengthen the argument for marketing within an organisation, says Cullen of CTPS. If your marketing is effective, having procurement working alongside should provide you with the evidence base to justify future campaigns and strategies. Marketing isn’t only about the creative and procurement isn’t only about the figures, it’s about how you can bring these two things together creatively to help business grow and work more effectively in the future.
So much in business is common sense. Strip away the jargon and the trappings of the boardroom and much of what happens in the daily grind is communication and human relationships.
It may sound trite to argue for more understanding, greater empathy and better communication, but this isn’t advice that has fallen from the lips of political or social idealists. This is what the directors, managing directors and CEOs are urging in order for marketing and procurement to get the best from their relationship.
The best thing marketers can do is work with procurement from the earliest opportunity, says Butterworth. Explain what marketing is. Let them see the complexities of our industry. If they understand you they will work with you. It sounds blindingly simple but it doesn’t happen enough.
The bread and butter of so much marketing is to get inside the heads of those people buying your services or products. Once you’ve achieved this, you can use those insights to determine your campaign: the medium, the message, the tone and delivery. Why isn’t the same process adopted when dealing with procurement?
Marketing can be seen as fluffy, so it’s up to marketers to pitch to procurement as though they are new business. Win them over. Ground your language in the kind of things that will win over procurement, urges Stebbings of FCBI.
If we do X communication campaign we can increase business revenue by 2-5 per cent, equating to X amount of £s. Or if we give one agency 10 projects rather than one, they can reduce fees by 2-5 per cent. Procurement will understand this kind of language, and both parties can gain, she adds.
The feeling is that while procurement seems ready to put aside old differences, marketing is less so. Perhaps marketing feels that lights are being shone in some delicate, uncomfortable areas. Areas that for a long time have been the private domain of marketers.
If this is the case then the problem is not with procurement, it is with practices that don’t bear up to scrutiny. If your practices do stand up to such enquiry, the gains are clear to see. What are you waiting for?
