Marketing procurement is here to stay. If anything it is just getting bigger and more sophisticated.
The pre-conference session kick off with a presentation on the "maturation of marketing procurement" detailed in a session presented by Steve Lightfoot from the WFA and Paul Duxbury from SPIRE Worldwide.
Through research and case studies developed between the WFA and SPIRE they have identified four stages of Procurement developing in the marketing category.
1. From Balanced Traditional
2. Success Through External Partnerships
3. Seamless Integration
4. Balanced Emerging
The stage a direct procurement team sits within an organisation depends on the two main critial success factors:
1. Sourcing capabilities
2. Organisational readiness
With four main performance drivers and more than 40 sub-drivers, they are able to identify the developmental maturation of the marketing procurement function within an organisation and compare this with the ideal and industry best practice.
The bottom line of the presentation is that in the marketing category, direct procurement is becoming more sophisticated and more developed, especially amongst the larger global advertisers. But in the process they are moving from the traditional balance of cost reduction to a more balance approach across the four performance pillars being:
1. Integrated streamlined marketing process
2. Money / budget management
3. Supplier and roster selection and management
4. Continuous learning and improvement
Interesting findings from the research were:
The more mature, therefore the more the organisation had moved from Balanced Traditional to Balanced Emerging:
1. the more time procurement had been engaged (5 years +)
2. the larger the marketing budget ($3 bill +)
3. the more of the marketing budget was under procurement management (75%) and
4. the more centralised the management of the marketing budget.
Interestingly on the percentage of marketing budget under procurement management, this also varied by region with EMEA 70% - 80%, while the merging markets in APAC and LaTam were only 40% - 60%.
Having said that, the WFA found that 45% of their members with business in China and APAC had direct procurement managing marketing expenditure in the region.
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