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The triple challenge – Transformation, Trust and Talent

ProcureCon Marketing Conference
Co-authored by Lucinda Peniston-Baines, Managing Partner & Florence Garnier, Senior Consultant
The Observatory International, London, Monday 8th June 2015

The ProcureCon Marketing conference gathered key stakeholders from the Global Marketing Procurement Industry for its annual conference in London last week. The focus was around one main theme: taking Marketing Procurement to the next level. Whilst the three day event explored many topic areas for the industry, The Observatory International’s consultants saw three key themes – Transformation, Trust and Talent.

Transformation
There were varying viewpoints on whether Marketing Procurement actually warranted its own specific sub-category within Procurement. Gerry Preece, ex PG head of Media and Marketing procurement, stressed the specifics of buying marketing services versus other categories such as industrial supplies. Julian Hooks, Global CPO Johnson & Johnson shared a viewpoint that strategic procurement principles are common across all Procurement, but he echoed a need for familiarity with the buying landscape.

What was universally agreed was that Marketing Procurement is maturing and its role is transforming to cope with new marketing industry disruptors. These ranged from technologies such as programmatic buying and CRM tools; the exponential growth of brand content and its impact on speed to market and internal/external resourcing; supplier complexity and open source marketing where management consultancies compete against agencies, production companies and software companies, amongst which bloggers, vloggers and artists need to be integrated into the creative process and supplier ecosystem.

Trust
Trust was a broad-ranging theme, touching both the Procurement and Marketing relationship, and also the Procurement, Marketing and Agency relationship. Stephen Sergeant, Global media category Director of Diageo acknowledged the progress made but highlighted the necessity for Procurement to gain a better understanding of the marketing team’s needs in a transforming market. Sophie Barthelemy, procurement leader at the Renault/Nissan alliance, stated that success relies on a number of pillars including benchmarks to evidence potential improvements and ensuring everyone is on board at each step of the process. This need for colleagues’ buy-in and trust and a desire for benchmarks was regularly touched on throughout the conference. As Philipp Schuster, Director Marketing Procurement, adidas Group referenced “Trust is good, verification is better”. But quality and application of benchmarks is an issue that was unresolved.

A recent US CMO survey presented during the conference showed that CMO’s trust in their agencies is diminishing. The root cause due to the increase in suppliers on the marketing roster (agencies, production houses, freelancers, consultants, etc.) leading to a dilution of responsibility and a feeling by CMOs that they lack trustworthy partners to help them achieve their objectives. A vital area to resolve.

Talent
The skill sets needed by Marketing Procurement professionals to navigate this changing world was a regular discussion point. Mike Connett, Senior Strategic Sourcing Manager from Intel, described that his team now see themselves as investment managers for the business which requires more openness to risk. A thought reflected by Stephanie Bell, Global Head of Procurement for Diageo, who reminded us that gone are the days when Procurement was just implementing contracts, scopes of work, evaluations and fee reduction, now it’s tasked with optimising investment. Tapping supplier talent to drive innovation was much discussed and the requirement of a different mind-set by both the Marketing and Procurement teams to overcome the fear of failure and allocate budget to finance innovation. Both adidas and Coca Cola presented plans to encourage innovation, and the need to fail fast and move on was a commonly held view.

Characteristics looked for in new hires by Julian Hooks, Global CPO Johnson & Johnson, included soft skills and EQ (Emotional Quotient) to better understand and manage the stakeholders in the Marketing, Marketing Procurement and Agency/Supplier relationships. A quality that’s not always been a given in the past. Sopah Shah, Nestle’s Head of Procurement, Global Advertising was a great advocate for mentoring and coaching in this respect.

There is support for Marketing Procurement in addressing this triple challenge

Careful roster remodelling to ensure the right agency partners are put in place will better equip CMOs and their teams to cope with these major transformational marketing disruptors – we see this as essential and urgent. And by ensuring that any new roster structure is implemented by Marketing and Procurement working together to create a common vision for the sourcing policy will achieve a better relationship and level of trust with each other and their suppliers – as well as delivering cost reductions through fewer vendors and better way of working. To deliver this most efficiciently, Marketing Procurement must recruit and nurture the right talent in terms of capabilities, skills and deep stakeholder and landscape understanding to deliver these objectives effectively.

About The Observatory International:
The Observatory International is the leading global management consultancy dedicated to helping companies maximise their marketing and communication resources, through four practice areas: Resource Optimisation, Agency Search, Agency Compensation, and Performance Measurement.

TOI has nine offices in eight countries serving clients such as Aviva, ARLA, Ferrero and Samsung Electronics. More can be found at https://www.observatoryinternational.com

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