Procurement 2022: The Good, the Bad, and the Ugly
In 2010, the ANA published a landmark report, "Procurement: The Good, the Bad, and the Ugly." The work took the pulse of the industry on the state of marketing procurement at that time, and measured practices and perceptions among professionals in three functional areas: procurement/sourcing, marketing/marketing services, and agencies. In 2022, we repeated and built upon that prior research to track progress (or lack thereof). Results have just been released.
The bottom line? There is still good, bad, and ugly in the world of marketing procurement. While there has been some progress since our 2010 benchmark, it has been disappointing.
The relationship between marketing procurement and marketing has had modest progress.
- Both rate the health of the relationship between procurement and marketing equally: 57 percent of procurement respondents and 59 percent of marketers rate the relationship to be either extremely or very healthy. There has been improvement since 2010 for the marketing respondents.
- Marketing's perception of procurement being a critical member of the team has improved since 2010 and is now equal to the perception of marketing procurement.
- On the key metric of procurement's definition of value, marketing's perception has improved and moved closer toward maximum growth and impact and away from lowest cost.
- On the metric of procurement's view of marketing, marketing's perception has moved closer to an investment to be optimized and further from an expense to be minimized.
Yet there are still wide gaps in many other areas of the relationship.
The relationship between procurement and agencies continues to be a much bigger work in progress, and the gaps between these two constituents are troubling. Some key examples:
- One of the most fundamental metrics is that of relationship health. Procurement and agencies are not aligned at all. Fifty-four percent of the procurement respondent base characterized the relationship between procurement and agencies to be extremely or very healthy, yet only 15 percent of agencies feel that way.
- Procurement perceives that their definition of value is maximum growth and impact. Agencies perceive that procurement's definition of value is lowest cost.
- Procurement perceives that marketing is an investment to be optimized. Agencies believe that procurement views marketing as an expense to be minimized.
- 55 percent of procurement respondents agree completely that procurement understands the economic value of successful marketing, versus only 5 percent of agencies.
- 49 percent of procurement respondents agree completely that procurement is knowledgeable in advertising/marketing, while not a single agency respondent does.
A key insight is that marketing procurement is a relatively nascent discipline.
- The average marketing procurement department has existed for only 11.6 years; 55 percent of marketing procurement departments have been around for less than 10 years.
- 24 percent of marketing procurement professionals have less than five years of experience.
While some organizations have long-established and mature marketing procurement departments, marketing procurement overall is still an adolescent. This helps explain why many of the issues that were with us in 2010 are still here today.
The report concludes with 10 specific recommendations to improve the relationships between procurement and marketing and procurement and agencies.
Explore much more at www.ana.net/procurement2022.
The views and opinions expressed are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.