Marketing Procurement Not Going Away

One company's decision does not a trend make. 

NEW YORK (November 18, 2015) — More than two-thirds of procurement and financial professionals say PepsiCo’s decision to eliminate its marketing procurement department will not become an industry trend, according to a survey of members conducted by the ANA (Association of National Advertisers).

The survey sent to ANA’s procurement and financial management community asked:

PepsiCo has eliminated its marketing procurement department, saying moving the function to brand teams will allow it to be ‘more efficient and effective.’ Do you think PepsiCo’s move is indicative of a wider industry trend toward the elimination of marketing procurement departments?”

Of the 148 member responses, 68 percent said “no,” 15 percent said “yes,” and 17 percent answered “didn’t know/not sure.”

The survey follows on the heels of news in the trade press reporting that PepsiCo eliminated its marketing procurement department and moved the function to brand teams to improve efficiency and effectiveness.

The survey, conducted over five days, identified a number of common responses indicating this move is not indicative of a wider industry trend. They included:

  • Marketing/brand teams do not have the skill sets of marketing procurement. Procurement has expertise in areas including negotiation, contracting, supplier management, and risk management.
  • If marketing was required to do the work of procurement, it would be time-consuming and distracting. The role of marketing procurement is to bring value and efficiency to allow marketers to focus on marketing. If marketing teams are responsible for procurement, they risk becoming less effective.
  • There’s value in procurement acting as a neutral third party.

At the same time, within their own community, procurement professionals see the need for continuous learning in order to foster strong relationships with their marketing colleagues and understand the role of marketing. Respondents cited:

  • Goals between marketing and procurement need to be aligned.
  • Marketing procurement must add strategic value beyond price.
  • Procurement must understand marketing to be effective.
  • At some organizations, marketing procurement may need to reinvent itself to make sure it is bringing value that stakeholders need.

According to Bill Duggan, group EVP at the ANA, “Procurement can still bring significant value to marketing. Procurement provides expertise in areas that are beyond the skill sets of most marketers. That allows marketers to do what they do best: marketing! At the vast majority of ANA member companies, marketing procurement is not going away.”

The survey, sent to all ANA member procurement professionals, was conducted between November 13–17. There were 148 responses.

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About the ANA
The ANA (Association of National Advertisers) provides leadership that advances marketing excellence and shapes the future of the industry. Founded in 1910, the ANA’s membership includes nearly 700 companies with 10,000 brands that collectively spend over $250 billion in marketing and advertising. The ANA also includes the Business Marketing Association (BMA) and the Brand Activation Association (BAA), which operate as divisions of the ANA, and the Advertising Educational Foundation, which is an ANA subsidiary. The ANA advances the interests of marketers and promotes and protects the well-being of the marketing community.

Contact:
Duke Fanelli
ANA
dfanelli@ana.net
212.455.8030