The New (Old) Battleground: Marketing vs Procurement

“If you had marketers on boards they could put procurement back in their box, which is where procurement really belongs.”

I’ll let that statement sink in for a minute…

That bold piece of verbiage came from by Mat Baxter, chief executive of media agency UM, at the Publish conference in Sydney, Australia last week. He was part of a panel discussion talking about the process of selecting media agencies and the relationship that exists between media buyers, publishers and marketers.

Here is what he said in full as reported by marketing blog mUmBRELLA.

“They (clients) don’t care about soft measures. This is the new reality. They want to see that if I spend a dollar here I’ll sell something over there.

“The guys with the calculators are looking for that relationship yet we are still talking largely as an industry about the soft measures and it’s a real problem.

“We have to adjust our language and our discussion otherwise we come off as the fluffy people in the room, when it’s all about the feeling and the vibe, and these accountants and CFOs say ‘these guys are nuts’.

“They are thinking ‘these guys are the marketing fluff’ and then we wonder why aren’t we on the board and sitting at the top table. That’s the reason. We are not having the dialogue that big businesses and the serious people in the room are having. We have to evolve to address that.

“If you had marketers on boards they could put procurement back in their box which is where procurement really belongs.

“It’s in everyone’s interest to see that happen because procurement will be just part of the process rather than the dominant part of the process which is what we have at the moment.”

There are a couple of points to pull out here. One is that it shows how far procurement has come that it is now seen as a threat to the future progression of another function. Another is that the function is making its presence felt in areas of spend that would have been off limits just a few years ago and three that it is making that jump into the boardroom.

Now, I don’t think procurement needs to be put back in its box and I don’t think anyone else in the business seriously believes that either.

It has achieved what it has achieved – often putting millions back into budgets – and, without a shadow of a doubt, has helped businesses emerge from what has been one of the toughest trading periods in living memory. Procurement has earned its elevated position through hard work and results.

But there is a point made here by Baxter that is worth thinking about.

If procurement and another function aren’t working together, in this instance marketing, then they won’t be getting the best deal for their business. It might therefore be time for the function to take a step back from such activities, provide the advice but let marketing take the lead.

Not only will this free up resources for procurement to concentrate on more strategic issues, it offers the opportunity for those colleagues in other functions to make the decisions in the knowledge of what procurement offers. If they want their budgets to go further, they need to either adhere to procurement governance or involve them directly. If not, it’s not just procurement’s targets that are affected.

If marketing is overlooking procurement’s worth, that gap will soon become clear when their budgets are shrinking. And then perhaps we’ll see who belongs in which box.

Still quiet

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