ANA Marketing and Procurement Survey

April 1, 2005

Introduction

This survey helps gauge the relationship between Marketing and Procurement both positive and negative, and to highlight best practices.

Two surveys were fielded simultaneously from March-April 2005. The surveys were designed by Procurement Best Practice Task Force of the Advertising Financial Management Committee to:

  • Gauge the relationship between Marketing and Procurement
  • Compare and contrast how Marketing and Procurement each respond
  • Identify where they are best working together and note where improvements can be made
  • Highlight best practices

Survey sample sizes

  • Marketer Survey: 1,926
  • Procurement Survey: 334

Titles

  • Manager to Vice President

Respondents

  • 122 Marketing ( 6.3% response rate)
  • 68 Procurement (20.3% response rate)
Findings 

Key Findings

  • Marketing and Procurement are not aligned about their current and future role
  • Marketing appears resistant to Procurement's involvement in the marketing process
  • Marketing and Procurement disagree on Procurement's effectiveness
    • Over 70% of the Procurement respondents rated themselves as exceeding cost savings expectations/ but just 20% of the Marketing respondents said they had
  • Both sides agree there is room for improvement in their relationship, and there are bridges to be built
  • The current organizational structure (mostly separate procurement function) may be an impediment to a better relationship

 


Profile of Respondents

Size of Company

Size of company

Type of Industry

Type of industry


In your organization to whom does Marketing Procurement report?

To whom does Marketing Procurement report?

  • For most respondents, Marketing Procurement has a functional reporting relationship

Describe the role of Marketing Procurement at your company

Describe the role of Marketing Procurement at your company

  • Marketing Procurement tends to be a separate functional group

In what areas of marketing has Procurement become involved?

In what areas of marketing has Procurement become involved?

  • Dichotomies exist in perceived levels of Procurement's marketing engagement

In which marketing disciplines does Procurement play a role?

In whihc marketing disciplines does Procurement play a role?

  • There is even a bigger divergence by Marketing discipline

How would you rate procurement's impact on the following disciplines? (high=3, medium=2, low= 1)

How would you rate procurement's impact on the following disciplines?

In which marketing disciplines do you have no plans for Procurement to become involved?

In which marketing disciplines do you have near term (active in 2005) or medium term (active 2006) plans to become involved?

  • Procurement plans more future involvement than marketing plans for them

Overall, how has Procurement delivered?

  • The good news - Marketing perceives Procurement to be delivering some value


The Value that Procurement Brings to Marketing

Marketing Procurement
  • Procurement allows marketing people to focus on the job of Marketing. Disciplined approach to executing agreements and cost efficiencies
  • Assures alignment with Sarbanes-Oxley Act provisions/regulatory compliance
  • Cost efficiency, savings, CYA with Finance
  • In most cases, more of a hindrance
  • Independent voice to establish proper benchmarks and negotiate/ validate reasonable compensation
  • Overall, supplier management / liaison for coordinating internal requirements across multiple business / brands and with same supplier or across supply chain
  • Quality control, and mitigating risk of financial default and / or delivery disruption
  • Business partnership based on insights, innovation, global leverage and economic value
  • More efficient spend of marketing budget
  • Procurement shifts administrative burdens and structure from Marketing's plate, keeping them audit ready
  • Contract management, benchmarking and supplier sourcing.
  • Develop and implement strategies, which facilitates an ROI for marketing spend

 

Marketing about Procurement Procurement about Marketing
  • Frankly we see them as an obstacle
  • Loosen up
  • I don't see much of a role other than to generate lists of approved suppliers for printing, paper and technology
  • Accept that creating ideas is different from creating widgets
  • It isn't always about the money -acknowledge that price is secondary
  • The two disciplines need to have mutual respect and understanding of each other's roles and responsibilities
  • Do not try to take over Agency Selection
  • Become educated in marketing and advertising
  • Understand that marketing resources are not commodities
  • Spend more time learning about marketing, educate marketing about your value proposition
  • Accept Procurement as a team partner and recognize the core skill set they bring to the table
  • Remember that your suppliers (agencies) are not always your best friend...think less about your relationship with them and more about how Procurement can add value and expertise so that the entire team is customer driven and achieves ROI
  • Engage Procurement in strategic discussions early to allow maximum involvement and best outcome for the company.
  • Be more open minded and realize strategic sourcing comes to the table with expertise that can further facilitate an initiative and not as a threat to the process.
  • Realize Procurement is trying to help not hinder and be open to their involvement
  • Make more time for procurement interaction at the senior marketing leve

 


Top Three Challenges to Using Procurement for Marketing Processes

Marketing Procurement
  • Little understanding of the intangibles of the marketing/agency relationship
  • Too much emphasis on price in agency selection
  • Complete lack of sensitivity that agencies provide a creative product different from a manufactured one
  • Cumbersome -lack of understanding about our business
  • Senior management did not want them involved which sub-optimized the results
  • Perception that they are only interested in cost savings. Quality does not seem to be very high on their criteria list
  • Keeping priorities aligned in our ever changing environment
  • "My way" mentality
  • Timing -Marketing wants everything to happen yesterday
  • Ensuring that all parties are aligned and that there is a forward movement despite potential obstacles
  • Long term relationship of incumbent suppliers where trust and communication is primary but pricing is at a competitive disadvantage
  • Decisions -the marketing strategies are usually too fluid to nail down supplier deliverables
Source

Survey designed by the Procurement Best Practice Task Force of the Advertising Financial Management Committee and fielded to Marketing and Procurement professionals. March-April 2005.