Insights from Procurement Day

October 23, 2013

By Bill Duggan

ANA Procurement Day was hosted by BP in Chicago yesterday (10/23) and the learning was rich.

Business Value (from BP)
Creating business value is the role of procurement.  It’s not about marketing, it’s not about procurement, and it’s not about cost savings.  Rather, it’s about creating business value.

Emerging Procurement Practices (from McKinsey)
Such practices include:

  • Exploring new partner options
  • e-auctions for agency services
  • Increased use of trading desks
  • Production decoupling
  • “Clean sheet” models to improve transparency (to better understand supplier costs)

Talk Less, Listen More (from Nationwide)
Procurement helps facilitate key relationships and should talk less and listen more.  Examples at Nationwide:

  • Management of agency evaluations was moved internally.
  • Consistent scope of work processes were implemented with scope and quote templates.

Getting Started (from Groupon)
Those organizations getting started in marketing procurement need to conduct a spend analysis to determine how much is spent, on what, with whom, and by whom. That analysis would uncover:

  • Top categories
  • Top suppliers
  • Suppliers that serve in multiple geographies
  • How fragmented or concentrated the supplier base is
  • Who the key stakeholders are
  • Which categories to source and in which sequence

State Commercial Production Incentives (from Kraft)
State commercial production incentives are on the rise. States view these programs as job creators. The net savings in some states range between 15-50 percent of the total production budget. Talent residuals, celebrity talent, and agency compensation can qualify in some states.

Thanks BP, McKinsey, Nationwide, Groupon, and Kraft.  We all learned so much!

comments (1)

Krista Hill

February 24, 2015 4:26pm ET

I am interested in obtaining all of the presentations from this day. In addition, do you have any other examples of clean sheet negotiations for agency rates other than what McKinsey presented?

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