By: John Wallace February 28th, 2023 5 minute reading
I recently came across an episode of The Marketing Procurement Podcast with Magid Souhami that caught my attention. His guest on the program that day was Ivan Pollard, former CMO at General Mills, and the topic centered around the symbiotic relationship between Marketing and Procurement. At the time of recording, both guest and host worked for General Mills with the latter as its Director of Global Marketing Procurement.
As you might expect after seeing my article on how brand marketers and marketing procurement can better align, the importance of the Marketing – Procurement relationship is of great interest to me. This relationship is critical to the overall success of a marketing organization, yet the relationship is often strained at best and occasionally divisive at worst.
The secret of their success
Marketing procurement is tasked with managing and negotiating contracts with suppliers and vendors, while brand marketing is responsible for developing and executing marketing strategies and programs. Pollard alludes in the podcast to a “healthy tension” between the two departments, who despite representing the organization from different perspectives, have the same goals. But as you listen to the lively conversation between these two co-executives, it becomes clear that they have been able to crack the code to some degree and evolve to a higher plane where trust, unity and alignment exists between their two departments.
Why is it so important that this relationship is mutual, respectful and symbiotic as they put forth? Well, when marketing procurement and brand marketing teams are firing on all cylinders, a number of positive outcomes - both quantitative and qualitative - are achieved.
1. Saving costs and maximizing value
One of the primary benefits of having a strong alignment between marketing procurement and brand marketing is cost savings. By working together, these two functions can ensure that the organization is getting the best value for its marketing spend, while also ensuring that campaigns align with the overall brand strategy.
But it isn’t just about getting stuff cheaper. Barry Byrne, former global marketing director at adidas says in a Supply Management article that the focus should be on “value-in, not cost-out.”
“Any fool can cut the cost of a creative agency. Anyone can say ‘Cut costs by 10% or we’re not working with you’ – the brand manager can do that,” he says. “Marketing procurement needs to flip it, and say to the marketing team, ‘I’m going to work with you on this project, and I think we can release 20% value, and you’re going to have that 20% back to reinvest behind other campaigns that you’re working on.”
Pollard agrees, stating, “The best procurement people help you drive up the value.”
2. Using resources more efficiently
When two teams are communicating well and in sync, then everything just seems to flow much easier. Think of your favorite sports team. Everyone on the field has a role to play. When they work together executing the fundamentals and taking advantage of each player’s skills, then the likely outcome at the end of the game is a win.
It is no different for marketing organizations. Marketers and procurement managers each have their roles to play. When they collaborate effectively, it allows for more streamlined processes to blossom and a type of shorthand to develop which improves efficiency.
One emerging trend that some have recognized is the migration of careers from marketing into marketing procurement. “I don’t have a marketing procurement team, I’ve got a marketing team that does procurement,” says Byrne. “What I want is commercially minded marketing experts, and I think that’s a big step forward."
3. Improved brand consistency
Another key benefit of effective collaboration between marketing procurement and brand marketing is the ability to achieve consistency in branding and messaging across the organization.
According to a study by Marq (formerly Lucidpress), brand consistency reliably contributes to revenue growth with “68% report[ing] that brand consistency has contributed from 10% to more than 20% of their revenue growth." This is because consistent branding helps to build trust and credibility with consumers, leading to increased brand loyalty and repeat purchases.
4. Better decision making
Having marketing procurement and brand marketing work together allows for a more holistic approach to decision-making. It ensures that all aspects of the marketing spend are taken into account, from cost to impact on the brand, leading to better-informed decisions and better marketing results.
A Community Challenge Report published by Procurement Leaders supports this notion indicating that “leading procurement teams are differentiating themselves by harnessing data to deliver value” with top data performers targeting a higher level of cost savings.
“To meet today’s challenges, marketers need new capabilities” says McKinsey & Company Associate Partner, Cody Butt. “They need sharp analytical skills to pull useful insights from big digital data sets. They need to evaluate the potential of new channels and new service providers. And they need new ways to measure how efficiently and effectively they use budgets that must now stretch across far more categories.” According to him this is a big opportunity for marketing and marketing procurement teams to shine “since marketing is the largest indirect-spending category in many businesses.”
Happily ever after
It is imperative that companies ensure these two functions have strong alignment and are working lockstep towards common goals. As more companies are compelled to re-examine their approach to marketing due to rapidly changing customer habits and digital transformation, marketing teams will need to find new tools to help them excel. Some already have. The challenge is integrating them in a way that uplevels performance across the board.
As Pollard eloquently put it, “When you’ve got a mutual relationship, fully understanding each other, it's like being married. There are going to be things you don't agree on. But as long as you're trending in the long term on the greater good for the both of you, then I think good things happen.”
To learn about how Octerra helps align brand marketing and marketing procurement, schedule a demo today.
By John Wallace
Production and technology provide the foundation for John's current role at Octerra. With 12+ years of experience as Head of Production at StudioNow and AOL, he has created video content alongside some of the world's top brands & agencies.
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