Improved relationships between Marketing and Procurement

The relationship between marketing and procurement has improved substantially and is driving measurable results according to Optimizing the Procurement & Marketing Relationship – an ANA Survey due out later this month.

The survey of 155 client-side marketing and procurement professionals, fielded in March 2014, looked at the relationship between procurement and marketing and the factors that lead to the strongest internal partnerships and business results.  

Marketing / Procurement Relationship

Both marketing and procurement note substantial improvements in their relationship in the past year – with 30 percent of marketers and 62 percent of marketing procurement professionals reporting positive increases. According to survey respondents, the leading factors that have driven these increases include:

o    Better communication and collaboration
o    Senior management support
o    Alignment of success metrics
o    Visibility of procurement organization
o    Proven contributions from procurement

The findings in the research indicate that the marketing/procurement relationship, which historically has been much maligned, may have finally turned the corner and is now on a positive path.

Key Benefits of Marketing / Procurement

There is agreement between marketing and procurement that cost savings and risk mitigation are the top benefits that procurement brings to marketing. When asked to identify the top three benefits that procurement brings to marketing, cost savings was noted by 65 percent of the marketing respondents and 56 percent of the procurement respondents.  Meanwhile, risk mitigation was noted by 47 percent of marketing and 37 percent of procurement respondents.

However, there were areas of substantial disagreement between marketers and agencies. Marketing places a much higher rating on Request For Information / Request For Proposal facilitation (67 percent  for marketing and 33 percent  for procurement) – and actually ranks that as the top benefit.  Meanwhile, procurement places greater weight on its ability to bring collaboration across internal businesses (39 percent for procurement and 16 percent for marketing).

There was a notable disconnect when respondents were asked to rate the importance placed on various metrics (using the top 3-box on a 10-point scale). Marketing procurement focused on cost reduction (90 percent), risk mitigation (83 percent), and cost avoidance (77 percent) while marketing placed its highest importance on the business metrics of sales/market share increases (80 percent), marketing ROI (76 percent), and improving brand health metrics (70 percent).

Key learnings from the study:

o    Senior management support is critical and can be the single biggest influence on the marketing/procurement relationship.
o    Better alignment of success metrics is required. While cost is important, procurement should pay closer attention to the metrics of highest importance to marketers – specifically sales/market share increases, improving marketing ROI and improving brand health metrics.
o    Marketing should recognize the value that procurement brings to the table and be open to process improvements and enhancements both internally and with key supplier relationships that can be affected with the involvement of procurement.
o    Simple communication can go a long way.  Strong interpersonal skills are amongst the most celebrated traits of a marketing procurement professional.
o    The “ideal” marketing procurement professional has flexibility with changing marketing requirements and demands.
Bill Duggan, Group Executive Vice President, at the ANA commented: _“The marketing procurement discipline is evolving. This new work confirms that the relationship between marketing and marketing procurement is stronger than ever and provides common-sense suggestions for continued improvement.”