Procurement departments need to stop trying to get in the middle of marketers’ relationships with their agencies and instead trust them to make the right decisions, according to Paul Smith, senior director of global marketing and sales procurement at Mondelēz.
Speaking at the ProcureCon Marketing conference in London yesterday (13 June), Smith said procurement has a role to play in motivating both marketers and agencies to do the best work. But that it “cannot get involved in everything”, particularly at a company such as Mondelēz where innovation is so important.
“As the procurement guy you have to have full trust in your marketing stakeholders and we need to work on that. Procurement needs to trust marketing more,” he said.
“[Mondelēz] has a huge innovation agenda and often I find a lot of the guys in procurement want to be over buying agency talent for this or that innovation. They want to get involved and they want to buy everything and suddenly we are slowing down the innovation timetable. There is quite a challenge on us in procurement to actually empower quite a lot of things to marketers where we know we can’t add value or add value fast enough.”
Speaking on the same panel, Bayer’s VP of marketing procurement Malik Akhtar, said he sees procurement’s role as one that “facilitates an efficient and effective relationship between the agency and marketing”. He said it is not its role to position in the middle of that and to instead help them work better together.
As the procurement guy you have to have full trust in your marketing stakeholders and we need to work on that.
Paul Smith, Mondelēz
“If procurement positions in the middle of that it becomes obstructive and not helpful. We should help the agencies better understand what it is like to work with Bayer and help marketing better understand how an agency works,” he added.
“I spend more of my time focusing on marketing to develop that consistency in how we brief, how we write feedback. Al these things we could get better at and the trade-off would be enormous in terms of the agency relationship.”
Akhtar said that while procurement is often seen as the “bad cop” to marketing’s “good cop”, he sees it as “good and thorough cop”. He explained that procurement is under a lot of pressure to ensure that a business is “contractually pinned down” and has the right compliance rules in place otherwise it will “come back to hit you”.
“The amount of compliance and rigour expected of me and my colleagues in terms of thoroughness is very high. So thorough cop is absolutely part of the role,” he added. “It is all about a business partnership and relationship and about being really transparent. But if we haven’t got that thoroughness pinned down we are in trouble.”
And Mondelēz’ Smith agreed, saying recent revelations by the Association of National Advertisers around media transparency mean this is even more important now. “I have had my trust knocked really badly through some of these financial audits and where money is actually placed with agencies. I am not naïve, and having being with groups ANA, ISBA and the 21 different places agencies can move money, holding groups and so on, I am not naïve. I think the way to work and discuss this with an agency is very openly and transparently.”