This a re-post of a piece I was asked to write by Steve Ashcroft, a prominent procurement expert.
He asked me to develop an idea I had that marketing agencies and procurement professionals face similar challenges in proving our value at executive level and that instead of sharing our thoughts on how to overcome this, we are wary of each other.
This doesn’t seem to me like a smart way to solve a problem.
Here’s the piece…..
“I’ll be honest. I was pleased to read that PepsiCo has shut down its marketing procurement function and is giving the responsibility to its brand management teams.
Not ‘ding, dong the witch is dead’ rejoicing but I think it’s right that these decisions are owned by those accountable for the effectiveness of campaigns.
I also firmly believe that yes, marketing is a special case for the 10 reasons explored in Gerry Preece’s short book ‘Buying for Less – how to avoid the marketing procurement dilemma’, which can be summarised as:
‘Marketing is an investment not a cost and there are too many variables within the vendor set and unmeasurables in outcomes to make marketing procurement any more a precise, predictable activity than marketing itself.’
That’s not an argument to say don’t do it or that marketing deserves a free ride.
It’s an argument to recognise the limits of the possible and in the absence of precise, fair methods of evaluating the effectiveness of an activity, filling that void with a focus on cost alone is unwise and counter-productive, not just for both parties in the negotiation, but for the credibility of Procurement itself.
I want to offer a way forward which both protects the value at risk in a developing a marketing strategy and also does something for the status of the people around the table too.
The origins of this piece was Steve’s own observations recently that procurement is struggling to make a credible impression in the C-suite.
This, for me at least, was a striking thing to read for two reasons.
Firstly that this is something I read almost every week in the marketing press – why are there so few marketing directors on executive boards etc.? So it struck a chord. The second reason was that I’d kind of assumed that Procurement didn’t have any worries in this department.
Marketers generally think of Procurement as the shock troops of the FD’s team with a direct line in to the boardroom.
So it’s good to know that existential angst is not the marketer’s sole preserve…we’re not alone in the universe.
Let’s then ask why we have this failure in common, the answer to which is encapsulated in Preece’s book.
Measuring marketing effectiveness is really bloody hard and I can understand that trying to pick your way through a blizzard of vendors with highly variable, subjective qualities must be extremely challenging or even impossible for Procurement professionals.
In my own field of expertise, public relations, an argument has raged for as long as I’ve been in the industry (about 30 years).
How do you measure PR?
For years the industry fiddled about with a measure called AVE or advertising value equivalent. It’s the idea that the efforts of the PR team would produce a piece of media coverage that can be measured with a ruler (stop laughing) and then compared to how much it would have cost to buy that space as an advertisement.
Where to start on the idiocy of that idea….it’s like a restaurant critic evaluating a meal by the number of calories per £ they ate.
It’s still in use today despite the efforts of the PR industry to banish it as absurd and outdated.
The reason it hangs around like a bad smell is that nobody has come up with a simple, universal measure. The alternative (to map outcomes of work to precise and unbending campaign objectives) is demanding, expensive and requires a level of sophistication that is not found in the day to day management of most marketing campaigns which are exposed to changes of direction by the day if not the hour and objectives become a highly malleable concept.
Instead of doing the thing that is useful but hard, people fall back on the useless but easy and the hardest part of marketing is setting the objectives and the strategy.
I still read briefs from experienced marketing people working in big, well organised companies that say things like ‘make people visit our website’.
When was the last time anyone made you visit a website?
This sort of idiotic instruction set or spec is both Marketing’s problem and Procurement’s and will remain the principal barrier to the C-suite.
When you have a common problem, you need a common solution, which is for vendors to sit down with Procurement people and try to agree ways of evaluating marketing outcomes that both parties can support.
That is idealistic and a more practical objective would be to agree ways of describing desired marketing outcomes, in other words, work on the language of the instruction or specification to drive out uncertainty and make it easier to link objectives to outcomes.
Phrases like ‘raise brand awareness’ or ‘think outside the box’ are uselessly vague or subjective and I would recommend David Owens book ‘Creative People Must be Stopped’ for a clear solution of how to cut this challenge down to size.
He explains why and how imprecise language constrains innovation and the evaluation of risk in areas of activity like marketing because it fails to capture the constraints on innovation and more importantly he shows how to solve the problem.
We know what the problem is.
We have common cause in solving it.
We have the tools to address the problem.
Who will help me take this forward? I am genuinely interested to hear from Procurement professionals who would like to discuss this further.
Nigel Sarbutts, from www.brandalert.co.uk helps companies get more out of their marketing investment by challenging boards to define and communicate their objectives more clearly and marketing teams to improve the quality of their response.