Anyone covering the marketing communications industry will notice a distinct reaction from agencies and marketers alike whenever the word ‘procurement’ comes into play. One will find repeated insinuations that procurement teams are obsessed with cost, are overly cautious and fail to grasp the brand value derived from strong creative work.
On the flipside, procurement teams are thought to consider the strategies of their marketing colleagues with scepticism, questioning whether costs and risks are excessive, or if certain creative campaigns are more attention-seeking than value-driven.
Left unchecked, such divides can threaten to overshadow the simple truth that brand marketing and procurement teams both play for the same team and want similar outcomes.
Recently, marketing consultancy MediaSense and The Procurement Council at Supply Chain Asia held a forum in Singapore to bring both sides closer together, entitled ‘Marketing & Procurement: Where is the Love?’ What ensued was a part therapy session, part situation room and partly a blueprint on how to cooperatively tackle joint marketing challenges to make their brands stronger.
From a lengthy panel discussion involving both marketing and procurement leaders, it became clear that both sides are aware of existing divides but are also much more eager to bridge them since they rely on one another for success.
The great divide
“Some of the butting of heads that we see between procurement and marketing teams comes down to two main things. One would be a misalignment of objectives,” said Rob Davidson, the global sourcing category lead for corporate services at Standard Chartered Bank at the forum. “As procurement people, we're indoctrinated to think about cost reduction, cost avoidance and the bottom line, whereas our marketing folks typically think in more creative ways and are more preoccupied with brand engagement and such.
“I also think, perhaps controversially, there's a misalignment of personalities as well as the type of people who go into our vocations, respectively, are very different. Procurement people are very interested in discipline and framework and compliance, whereas marketers, from personal experience, are not. This is not to say that this can't work, but I think we just need to try and understand each other.”
“As marketers, we dream in Pantone colours,” added Brenda Maderazo, deputy director for corporate marketing at Singapore’s Health Promotion Board (HPB). “Procurement—they think in black and white. At HPB, we realised that magic really happens when you blend those two palettes. It’s about getting to know each other, like when you meet your spouse,” she said.
Unfortunately, what too often happens when those critical early conversations haven’t taken place can be a disconnect from the outset, said Wei Yeong Tiow, VP of procurement and global supply chain sustainability for AMEA at Mondelez. Often, he said, procurement people will make their first interactions with marketers about process, such as placing an RFP, choosing vendors, or getting sign-offs. But this can arouse distrust without first getting an understanding of why each side is doing what they’re doing.
“Just like love, sometimes you’ll start on the wrong footing and it’s harder to fix later,” Tiow said. “If I’m buying marketing procurement, it’s important to understand the brands. You cannot go in thinking Oreo and Cadbury need the same stuff. Without understanding the brand, it’s hard to understand why people are making certain decisions—right or wrong—for the business.”
The value of marketing
Fortunately, Tiow said he’s seen considerable progress in recent years as the procurement profession recruits more people with a stronger understanding of brand purpose. This has been instrumental in helping marketers and procurers get past a critical divide on whether marketing is inherently a cost or an investment.
Those with brand understanding are more likely to focus on what marketing budgets are trying to achieve in relation to competition, market share, brand reputation and awareness, argues Tiow, which is far more effective than commoditising the profession by simply looking for the cheapest option to reduce cost that may not address key objectives. Instead, Tiow said discussions need to be wider to give everyone confidence they’re on the right path together, with questions like:
- Why are we spending the money?
- Where are we spending the money?
- What’s changed for our brand?
- How have consumer preferences shifted?
- Should we market differently this time? Why and how?
“If we can frame it like this as we go into discussion, it doesn’t matter whether you’re wearing a procurement hat or a marketing hat. We’re wearing the hat of a common team, trying to find a solution or progress something.”
For decades, marketers have intimated that they fight an ongoing battle with CFOs and procurement over whether marketing is a cost or an investment. But to Davidson, this debate is largely irrelevant since the bigger issue is demonstrating value.
“Everyone who works in an organisation like mine should be able to —through however many degrees of separation—demonstrate value to the organisation. If we can’t do that, we’ve got a problem. If we can do that in marketing, we should not be worried about there being a perception that marketing is inherently a cost. Because any cost that we do take out can be reinvested. We should be able to, hand on heart, go back to our seniors and say we’re reinvesting this cost because we can demonstrate it is a benefit at the end of the line,” he said.
This, said MediaSense APAC president Shufen Goh, is at the heart of the issue. Marketers, she’s noticed, continue to struggle to make a strong business case, not because of a lack of data, but because of the degree of difficulty to track and document what may be a multi-year cycle to demonstrate marketing impact.
For HPB’s Maderazo, whose job is not to market a commercial product, demonstrating value to her executive leadership government is just as daunting. There are no hard sales, but lots of sifting through less tangible data around people’s behaviours and lifestyles to determine if campaigns are having an impact. But she said this is where procurement and marketing found unity in leveraging technology to track health shifts and look at objectives in stemming conditions that lead to chronic diseases.
“Between procurement and marketing, we were very aligned that if we don’t do public health promotion, there will be future health care costs, so we had very clear long-term objectives to bring down the incidence of these chronic diseases,” Maderazo said. This led to cooperative work in developing an app to track people’s exercise, sleep and eating habits and link them back to national health outcomes.
A united front to a changed marketing world
If marketing and procurement can work together to better address societal behaviours, one would think they can do the same to adapt to a changed consumer marketing landscape. Indeed, new shifts in marketing practices are driving the imperative that marketers and procurement teams form cooperative strategies to make their efforts and budgets more effective.
At the procurement event, a presentation by MediaSense principal consultant Rajiv Jayaraj outlined four key shifts in marketing practices that marketing and procurement need to address in concert (see figure below).
One is the staggering rise of retail media networks, especially as a performance marketing channel, requiring marketers to clean up their first-party data to allow for more personalisation and better measurement, while procurement teams gauge performance and ensure these campaigns comply with privacy rules.
Influencing influencer deals
Another key shift is the growing brand dependence on influencers, whereby brand teams must identify the niche influencers that resonate with their audiences and track whether true engagement actually exists, as procurement teams help with due diligence on influencers to mitigate risks and have the unenviable task of working out fair contracts.
Tiow said that while it’s easy to develop frameworks for influencer marketing, quantifying the contracts is difficult when often marketing teams are bringing forward emotional choices of personas seen on screen, whom they feel will be a good fit for their brand, when there may be a disconnect between the person and their persona.
“One of the biggest risks of influencer marketing is how deep you want your brand to be attached to the influencer,” Tiow said. “What is the cycle of refresh? Is this tactical content creation, or is it riding a trend? Those things determine the level of investment and the level of risk a brand is willing to take.”
Photo: MediaSense Gauging popular responses to influencers can be hard to do, as the internet rarely follows common sense, Tiow said. For this reason, Tiow said it’s best to dismiss the hype and go back to marketing basics when assessing influencers to determine the objective, whether the engagement is a brand promotion vehicle, whether it’s about storytelling or an enhancer of brand loyalty. This then allows procurement teams to apply similar principles in endorsement deals, sponsorships, or celebrity activations.
Often, agencies have more experience in gauging how well an interaction can be amplified on specific channels like TikTok and for this reason, he suggests companies can experiment but be careful with how far they go with the number of influencers they engage directly at one time.
Marketing efficiency through AI: A dream for procurement?
One area that all businesses and divisions are grappling with is around AI, but when it comes to marketing and content creation, new generative AI media and tools are revolutionising ideation, production and iteration, with the potential to automate much of the creative process and deliver significant efficiencies.
By next year, Facebook is claiming it will fully automate campaign creation based on brand collaterals. Even agency groups like WPP are offering AI-driven tools to let their clients plan, create and publish their campaigns independently. While the idea of huge cost savings from automating an expensive creative campaign process might be music to the ears of some in procurement and marketing alike, it’s clear that not all share the same level of enthusiasm. In fact, handing the keys of AI-generated campaign creation over to marketing teams is likely to require more work and closer internal cooperation and brings significant risk to brands and their engagement with audiences.
Davidson explains that while all organisations and their vendors should be demonstrating efficiencies through agentic AI, the question around generative AI is a lot different. “There’s quite a lot of mess there,” he said, “a lot of risk involved in [applying gen AI campaigns] at scale at the moment.”
“I liken Gen AI to caffeine,” said Maderazo. “Does it make the work faster? Yes. But it can also make you do the wrong things faster and then you have to do more work to clean the thing up.” She suggests we need to ensure such AI-driven work retains human elements like empathy and cultural nuance, or it will simply contribute to content clutter and a giant sea of sameness.
Yet Davidson also suspects marketing teams will be able to work through Gen AI’s shortcomings iteratively and quickly, which poses real questions about the role of agencies for brands. He suggests agencies will likely specialise in being the AI experts who can best use the tools and help brand marketing teams to maximise effectiveness.
Goh points out that many in-house marketing teams are now facing the same pressures as agencies, since CEOs are now questioning why they might need 20 people internally to produce content, given their new abilities through AI to enable more speed and scale.
While the C-suite may be keen to see more AI implementation and agencies may be keen to add more AI-enabled capabilities to the work, it’s up to procurement and marketing teams not to lose sight of their objectives. Goh said a key question they need to tackle together is how far to use the technology for actual benefit.
“We think AI has a great role to play in intelligence, more intelligent targeting and content creation at scale. But the question may be: ‘Do you really need hyper-personalisation in your category or is it too creepy?” asked Goh. “Any AI adoption that is not backed by senior leadership has the potential to become a vanity project.”
In his presentation, Jayaraj pointed to the integral role of procurement in ensuring gen AI adoption has the right features, support, ease of integration, flexibility, security and scalability to really make the investments and applications work for brand marketers. Whereas marketing teams may want a quick solution, procurement can act in the best long-term interests of the team and wider company to make the right investments.
As Mazerado said, “it starts from trust, understanding, listening and putting yourself in the shoes of the other person and knowing their motivations so that we can come to a common language. Then we can start discussing what needs to be done. Ultimately, there is a shared objective because we are working for the same organisation.”
