Marketing procurement has clear priorities for 2024. Laura Forcetti, Director of Global Marketing Sourcing Services, identifies seven areas where the magnifying glass is likely to focus.
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We all need priorities to help us focus and marketing procurement is no exception. What’s important is that they keep evolving and the current goals for our Sourcing Forum members show both where they plan to focus now and how those priorities have evolved over the last five years.
Polling of 107 members from 64 of the world’s largest companies identifies this year’s top priorities as stakeholder engagement, defining savings, evolving perception of marketing procurement and client agency performance models.
That’s, mostly, a radical change from 2019 when the top four were: procurement metrics, improving perceptions, understanding the productivity and ROI of marketing as well as communicating the value of procurement.
The change demonstrates how marketing procurement has stepped up to the mark to become a strategic advisor for marketing teams and I think will translate into action in seven clear areas. The breadth of these actions underlining how much the function has moved beyond basic cost concerns.
My seven predictions for 2024 are:
- Capabilities – expanding digital skillset
More tech in the advertising industry means procurement teams need more tech skills to stay ahead of the curve and provide value to their marketing counterparts. Whereas previously perhaps only some categories of marketing investments required digital/tech knowledge, now technology is literally everywhere. This doesn’t just mean delving into the world of generative AI but also virtual production studios or in-store livestream marketing for example.
- Process – more agile sourcing strategies
The world is changing rapidly, and marketing procurement needs to make sure it can keep up. So, whether it’s innovations, consumer behaviour changes, wars, inflation or political decisions that drive the change, sourcing teams can’t only rely on a traditional fixed three- or five-year sourcing category strategy anymore. They constantly have to adapt and ensure their strategy is the best for what the marketing teams need and allow for quick adjustments/responsiveness as and when the market shifts. Some of the most agile teams will have to become more resilient and be trained in crisis management with contingency plans to address unexpected events.
- Purpose – sourcing with purpose, responsible marketing, company reputation
No longer can purpose be something that’s considered at the end of the sourcing process. It needs to be front and centre of every stage from budget setting and internal briefing stages to supplier performance management. This applies to all categories of marketing investments be it media, creative, insights, events, production or trade marketing for instance. Sourcing teams are increasingly expected to contribute to sustainability, DEI, data ethics or brand safety.
- Relationships – rethinking agency models and landscape
In 2024 we’ll see lots of changes in the way commercial relationships are being managed by procurement; possibly even different remuneration models (from hourly rates to deliverable/performance based if AI is involved, for instance) and different types of collaborations with niche and specialised partners who might offer more innovative solutions. New models of collaboration, for example, will help brands tap into a greater amount of external ideas and creativity, combining existing relationships with start ups or freelance professionals.
- Source of information – better data
Every brand needs better access to data, be it more qualitative data predicting market trends, insight into consumer behaviours and campaign performance. This takes marketing procurement well beyond its rudimentary dataset of PO and vendor data. Access to these numbers will allow for more strategic sourcing and enable the function to make a greater contribution to growth/top line/effectiveness. Delivery will require procurement to expand its skillset to enhance its ability to understand and interpret data.
- Better together – cross-functional collaborations
Increased collaboration between marketing, procurement and departments such as IT, finance and legal should be expected due to the increased complexity of the world we operate in. It’s impossible for one function to possess all the skills required today. Collaboration will also involve the different arms of marketing procurement, with for instance the procurement leads in charge of media, creative, production, insights, sales categories working closer together. Such cross-functional teams will be able to bring together different skills and perspectives and further enhance the role that marketing procurement can play.
- New procurement KPIs – greater creativity
Teams will have to become more creative in how they optimise marketing investments in a way that enhances their value to leadership teams. Traditional KPIs such as hard savings, for example, are irrelevant in an inflationary world, when budgets are being reduced, or where there is constant innovation meaning no potential for year-on-year comparisons. Some possible KPIs could include selecting high performing agencies, improving agency performance, protecting our company's interests and resolving conflicts. The challenge will be to persuade other departments such as finance and supply chain to buy into this new world and understand that growth and top line impact can be as important as P&L.
Wherever individual marketing procurement teams chose to focus, however, we can expect that 2024 will be a year when the sophistication of the contribution that teams bring to their companies will only increase, building on the work that the WFA’s Project Spring started.
The areas in which marketing procurement can add value will grow and the understanding of the function as a valuable contributor to marketing and company strategy will be enhanced.