Procurement's relationship with marketing improving but a 'notable disconnect' remains

Will Green is news editor of Supply Management
20 May 2014

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20 May 2014 | Will Green

The relationship between procurement and marketing is improving but there remains a "notable disconnect" between the disciplines, according to two surveys.

A study by the Association of National Advertisers (ANA) showed 30 per cent of marketers and 62 per cent of procurement professionals reported improvements in their relationship over the past year.

The factors driving this improvement were better collaboration and communication, senior management support, alignment of success metrics and proven contributions from procurement, according to the ANA.

Both marketers and buyers agreed that cost saving was among the top benefits procurement brought, cited by 65 per cent of marketing respondents and 56 per cent of purchasers, along with risk mitigation, cited by 47 per cent and 37 per cent respectively.

However, there was also disagreement, with marketing placing greatest priority on request for information and request for proposal facilitation (67 per cent compared with 33 per cent of buyers), while procurement put more weight on its ability to bring collaboration across the organisation (39 per cent versus 16 per cent).

When it came to performance metrics there was a “notable disconnect”, with buyers rating cost reduction, risk mitigation and cost avoidance most highly, whereas marketers ranked sales/market share increase, marketing ROI and improved brand health.

Bill Duggan, group executive vice president at the ANA, said: “The marketing procurement discipline is evolving. This new work confirms that the relationship between marketing and marketing procurement is stronger than ever and provides common-sense suggestions for continued improvement.”

The report, based on a survey of 155 client-side marketing and purchasing executives, said senior management support and better alignment of success metrics were key to improving the relationship, while the “ideal marketing procurement professional has flexibility with changing marketing requirements and demands”.

Meanwhile, a separate survey by marketing services consultancy AAR found 67 per cent of respondents agreed procurement was having a “positive effect” on marketing and the function was involved in 98 per cent of deals.

The study, involving 200 agencies and in-house marketers, found procurement was “ideally placed” to help marketing demonstrate its value but 52 per cent of respondents “struggle to establish a positive working relationship with procurement”.

Kerry Glazer, CEO at AAR, said: “Bringing procurement in early to the pitch process is vital, as is regular engagement between marketing and procurement teams. This will help the procurement team to forge an informed relationship with the marketing team and the incoming agency – even before they are appointed – expanding their knowledge and establishing the basis of a strong, long-term partnership. Agencies shouldn’t see or treat procurement as a third wheel. They represent the client in the same way that the marketing team do.”

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