10 things Procurement needs to know about digital marketing

This post is by David Little, who has been working in Procurement Category Management for 12 years within FMCG, Telecoms and Consulting. He has a special interest in Marketing categories, Procurement Leadership and helping others develop their Procurement skills.

In an age of increasing budget accountability, the need for closer collaboration between marketing and procurement colleagues is greater than ever.

For procurement professionals, understanding the importance of value creation and leveraging effective agency relationships (instead of cost-out thinking) are key to transforming this relationship.

Here are some pointers on understanding the challenges marketers face and how you fit in…

Simply ‘bolting on’ digital to your plethora of other ATL or BTL activities does not work. Since the digital medium should result in an integrated consumer experience from start to finish – your agency roster should reflect this. You and your stakeholders should have a common understanding of this strategy.

Is your budget balanced?

• Traditional marketers spend on digital as follows: 60% on working media, 20% content creation, 10% on employees and agencies.
• Digital ‘best practitioners’ spend: 30% on media, 50% on content

While this isn’t a rule, you should look at your spend split and understand why it is the way it is.

Today’s digital agencies should have a balance of technology and marketing competencies – do yours have the right talent in both? Is it all in house, or is something being sub-contracted at an unknown mark-up? Like the decoupling of TV advertising production, consider the equivalent distinction between creative and digital production activities.

Creative and technical content should be controlled in a way more akin to online publishing to avoid issues like mixing old and new copy, contradictory technical info, reports of quality issues or negative consumer reviews. You can help in identifying this waste.

You should agree a measurement of ROI with your agency as a matter of course. Isolate the impact of your campaign (from other activity) and report only those measures that lead to useful insight. These and agency performance criteria should be formalized, of course, in a contract.

Are you optimising your consumer reach? Are you advertising to consumers who already have your product? Do you have two or more agencies reaching the same consumers with similar messages, or (worse) conflicting messages? Since only advertisers can keep records of its consumers’ personal information it’s another opportunity for you to tidy up.

Do you own the IP on your websites? Ownership of programming code is a tricky area contractually and, from a business risk perspective, one you and your legal counsel should look into for the sake of your stakeholders. This can be more intricate when your company’s marketing efforts cover domains in several countries.

The various digital marketing channels – Search Engine Optimisation, Pay-per-Click, social media, display, mobile etc. – are managed by a technology platform; the technology itself is distinct from the management of this platform – make sure you understand this distinction and if you’re paying a fair price for each.

Process complexity is a rich hunting ground for efficiencies in time and cost. Using Lean Thinking methodology to chart the stages of a digital campaign from planning to billing, you should be able to weed out problem areas: use your (or an external facilitator’s) skills in a workshop with your marketers and agency.

Typical areas you’ll uncover:

• Approval processes
• Mail communication and meetings
• Unnecessary manual intervention
• Files/documents in different formats
• Duplicate data
• Lengthy downloads
• Over-reporting

Be a force for innovation! Process efficiencies (no.9) free up time to research and implement technological advances, such as a unified technology platform (as per 8, above) and user interfaces that simplify reporting and speed up activation. Hint: standardised across brands and agencies.

In the context of marketing-procurement relations, it’s worth reminding ourselves we’re in this for the long haul. Use the above advice with a dollop of humility; work as a force for good, and sell Procurement’s involvement as a way to help Marketing reap value and demonstrate it to the wider business.

Good luck and have fun!