The challenges faced by the advertising industry when dealing with their marketer clients’ Procurement Departments has been a hot topic for some time in South Africa. However, this thorny issue is not unique to South Africa, says Tina Fegent, U.K. Marketing Procurement Consultant speaking at the IAS Marketers Masterclass in Sandton. With 25 years’ Marketing Procurement experience in the UK, she confirms that procurement departments do think differently and very often try to apply the same principles for purchasing stationery and taps, to procuring marketing services and intellectual property. “These principles don’t always fit when you are ‘buying’ people.”
Why Marketing Procurement needs to love what it buys:
Fegent insists that the procurement process needs to be one of ‘give and take’ between procurement and the marketing or advertising agencies; agencies need to ensure that they are transparent from a commercial point of view, developing an understanding of procurement needs – and vice versa. Procurement needs to be frank in its cost-saving initiatives and then work together with agencies in solving problems, but this is most often not the case. “I think procurement people drive animosity, because they don’t know the sector and as a result they don’t love what they are buying,” says Fegent. Those in procurement sometimes need to reduce the rigidity in their approach to marketing procurement, with the understanding that the standard procurement steps won’t necessarily be required in this space.
Tweaking procurement KPI’s to master the risk vs reward in marketing:
More often than not Procurement reports into the finance director. Whose priority is naturally to cut costs and maximise profits. So Procurement’s main priorities are to drive value, manage risk and get ‘more for less’. “When I’ve worked for client organisations and say for example I managed to save £200 000.00, I could potentially buy another advertising campaign,” explains Fegent. This being said, the measurement of procurement KPI’s and organisational ROI need to be worked on by both procurement and marketing. The challenge here once again, is finding the budget to measure the effectiveness or ROI of campaigns, in addition to finding the budget to run the campaigns….