Our guest contributor today is Brian Seipel, a marketing project analyst for Source One.
Back in 2013, blogger and lead analyst for Spend Matters, Thomas Kase, asked the question “Is Procurement Cool Enough to Touch Hot Marketing Spend?” Kase took a cautiously optimistic view on the question, noting that marketing spend was ripe for the picking. This, of course, depends on procurement pros finding the leverage needed to gain a toe hold in such a hard-to-reach category. Marketing spend, unlike many other categories, tends to be more siloed off and inaccessible to procurement teams. The gatekeepers to this spend, the marketing teams themselves, often don’t see eye-to-eye with the perceived ‘common procurement professional.’
Although this is somewhat archaic to more developed procurement practitioners, there are still marketers who fail to realize the benefits of marketing/sourcing collaboration. They feel marketing’s qualitative approach to goals works in ways not comprehensible by the number crunchers in procurement, where quantitative objectivity is perceived to reign. Kase summed the issue up when he said “There’s a huge cultural gap – which can lead to a lot of fighting against windmills without some sensitivity on both parts.”
So where do things stand now? Have procurement pros cracked the code on breaking into marketing spend, or are we still playing the role of corporate Don Quixote a year and a half later?
A mix of good and bad indicators
The answer is “a little of both.” Progress has been slow – A year after Kase’s predictions, the global marketing services firm Charterhouse noted that too much spend is still left unaccounted for in the marketing budget. “On average, only a quarter (27 per cent) of European marketing channel spend is currently measured in terms of ROI by procurement departments. And, worryingly, more than half (55 per cent) of procurement professionals report a pattern of marketing departments getting excited about new platforms, only to be disappointed by their commercial results.” In other words, partnerships with marketing teams are still uncommon, and the results of such collaboration are tepid at best.
However, marketing data-intensive companies like Marketo, Eloqua, and Infusionsoft have been on the rise since Kase wrote his article. Their success is a great indication that marketers are trying to not only become more lean and efficient through automation, but also more objectively accountable from an ROI perspective. This mentality shift is good news for procurement, as it means marketing’s mindset is starting to bridge the gap with our own.
Even better news – this sea-change may be coming not just from within Marketing, but also from the outside. The CEO’s and CFO’s, both more in tune with Procurement’s mission than Marketing is, are putting outside pressure for greater accountability. One such example is Kraft Foods, who began the new year with a new CEO in place – Although a formal game plan has yet to be announced for the company now that new hands have taken the reins, AdAge reports that the company may be shifting from a strategy of ever-increasing marketing spend to one more focused on operational efficiencies and belt tightening. In other words, marketing teams need to establish more formalized processes for proving their worth now, before their funding faces the chopping block.
What still needs to happen?
We may not be where we had all hoped back in 2013, but there are steps we can take to get there. In part two of this story, to be featured next month, we will take a look a few key proven methods that Procurement can take now to bridge the gap and build a stronger relationship with Marketing.
In the meantime, check out Source One’s Marketing Insight Report, and then tell us what you think – leave a comment telling us if Procurement is, at last, in a position to truly break into marketing spend.