For the last three years, Boundless has attended ProcureCon Marketing, an event that gathers marketing procurement professionals from across the nation over a three day period that is full of educational sessions, panel discussions from F100 companies, and networking. This year’s event was in sunny San Diego, California and as usual, we left the event with great learnings and new relationships. This year specifically, there were three topics that stood out as the most buzz-worthy: the pain that comes with the RFP process, the everlasting debate to in-source or outsource agencies, and the importance of measuring ROI and stakeholder engagement. Below are some highlights for each of the trending topics.
The most discussed topic this year was the RFP process and the challenges that arise while using them on the marketing side of the organization. Like many tools and processes developed on the direct procurement side, RFPs work really well when the product is well-defined and more of a commodity. Even other indirect categories like office products, travel,maintenance, etc. can be well handled through traditional RFPs as products and services can be evaluated in an apples-to-apples comparison. Marketing is very different as a large percentage of the value is on the people and creativity that they bring to the table. Two commercials or campaigns may have the same scope, take as long to complete, cost the same, but one may be 100 times more effective than the other. How can you assess agencies and partners in advance through a spreadsheet exercise? Most speakers and attendees at the conference agreed: you simply can’t.
So why do so many companies continue to use RFPs in the marketing category? Well, in some industries, most government organizations, and many large companies, it is either regulated or company policy, so marketing procurement managers simply have no choice but to use them. Even while most recognize that the process is archaic, many keep doing it out of fear of breaking the mold, or simply because they don’t have a better alternative.
Manuel Reyes, CEO of Cortex Media, shared that a good RFP should be a learning process, and more focus should be on interviewing suppliers to understand their offerings and what sets them apart. He further proposed that the RFP should be closely linked to how the contract is written, where RFP responses should go straight into the contract, with success metrics and auditing expectations clarified up front and included in the contract. Too often the contract phase is completely disconnected from the RFP process and handled by legal resources not familiar with how success will be measured, and suppliers held accountable.
Katrina Bott, Director of Strategic Sourcing at Michael Kors voiced similar recommendations, sharing that her team typically calls suppliers before issuing the RFP, to conduct in-depth interviews to ensure they are asking the right questions and understand key differentiators, pricing, etc.
Steven Schwartzman, Marketing Procurement Manager at Sony Pictures, recommended sharing your budget with suppliers (which is normally a big no-no in procurement). He suggested letting the suppliers show you what they can accomplish with your budget and to leverage your existing supplier to help you determine what you are actually spending today for the most accurate numbers. Mithun Sharma, Vice President of Global Strategic Sourcing at Visa went even further, suggesting sharing program objectives with prospective vendors and asking them to provide the top five reasons they would best suited to delivering on the goal. This process can drive more efficiency and quickly identify the strongest contenders.
Overall, the event created conversation amongst everyone that was extremely educational and beneficial to learn how other organizations approach the RFP process.
To In-source or Outsource? – That is The Question
Another hot topic that presented itself at this year’s ProcureCon Marketing was whether to outsource or in-source agency services. While there are fans of both approaches, most practitioners seemed to agree that a hybrid approach is the best.
Larry Smith, Indirect Procurement Manager at Mars and David Gallaer, Vice President of Category Management at MUFG, agreed that although building in-house capacity for tactical and continuous work, and gaining control and visibility of programmatic buying is recommended, organizations should still rely on outside agencies for the highly creative and strategic work. Jim Wallace, Global Head of HP Agency Strategy & Management, expressed similar sentiments, sharing how HP brought analytics in-house, and continues to outsource creative. They use scorecards to evaluate vendors in senior and creative roles and hold agency innovation days where suppliers are invited to collaborate with their team to solve specific prioritized cases.
Reyes on the opposing side of this topic, argued that it is important to own your organization’s data and tech stack, because often times bringing in agencies in these areas creates a co-dependency, making it difficult to ever move away from them.
Regardless of your opinion on this hot-topic, Mat Mildenhall, Chief Client Officer at EG+ Worldwide, encouraged everyone to ensure they are leveraging the internal knowledge they have to properly educate the agencies on their business insights. Agencies may have better creativity, but at the end of the day, your team knows your business better than any agency ever will.
The Importance of ROI and Stakeholder Engagement
Lastly, there was a lot of discussion about the Holy Grail of marketing: measuring ROI and proving value to internal stakeholders. While digital marketing has certainly improved tracking in many ways, it has not solved the problem of attribution and knowing where your marketing dollars are really working and where they are not.
Although tracking and attribution are ultimately the job of marketing and sales, it is also marketing procurement’s job to find vendors and create partnerships that help drive these sales and innovation efforts.
Smith shared that as internal customers are forced to be intently focused on what is working in the present, procurement must shift focus towards the next step in order to help marketing innovate. As marketers work very closely with agencies on a daily basis, they should also be working closely with procurement to help address issues, maintain accountability, and ultimately act as a marriage counselor for the agency relationships.
When considering where agency focus should lie, it was clear that the majority of attendees agreed that agencies should focus on helping marketing procurement articulate ROI to stakeholders and the rest of the organization. In doing so, it will ultimately help them be heroes by bringing new and improved ways to deliver and measure results.
In closing, this year’s ProcureCon Marketing was full of great discussions and insight into some of marketing procurement’s hottest topics. While the RFP process, the decision to outsource or in-source agencies, and how to engage stakeholders to proactively increase marketing ROI, are all challenges that most organization today face, it is important to look to each other for insights and best practices. Sharma left attendees with great advice: “Develop a clear opinion on how to help your company become better. Marketing procurement has a central role, take advantage of this position, develop a point of view and use it to influence and add value.”