Marketing Procurement Not Going Away
One company's decision does not a trend make.
NEW YORK (November 18, 2015) — More than two-thirds of procurement and financial professionals say PepsiCo’s decision to eliminate its marketing procurement department will not become an industry trend, according to a survey of members conducted by the ANA (Association of National Advertisers).
The survey sent to ANA’s procurement and financial management community asked:
“PepsiCo has eliminated its marketing procurement department, saying moving the function to brand teams will allow it to be ‘more efficient and effective.’ Do you think PepsiCo’s move is indicative of a wider industry trend toward the elimination of marketing procurement departments?”
Of the 148 member responses, 68 percent said “no,” 15 percent said “yes,” and 17 percent answered “didn’t know/not sure.”
The survey follows on the heels of news in the trade press reporting that PepsiCo eliminated its marketing procurement department and moved the function to brand teams to improve efficiency and effectiveness.
The survey, conducted over five days, identified a number of common responses indicating this move is not indicative of a wider industry trend. They included:
- Marketing/brand teams do not have the skill sets of marketing procurement. Procurement has expertise in areas including negotiation, contracting, supplier management, and risk management.
- If marketing was required to do the work of procurement, it would be time-consuming and distracting. The role of marketing procurement is to bring value and efficiency to allow marketers to focus on marketing. If marketing teams are responsible for procurement, they risk becoming less effective.
- There’s value in procurement acting as a neutral third party.
At the same time, within their own community, procurement professionals see the need for continuous learning in order to foster strong relationships with their marketing colleagues and understand the role of marketing. Respondents cited:
- Goals between marketing and procurement need to be aligned.
- Marketing procurement must add strategic value beyond price.
- Procurement must understand marketing to be effective.
- At some organizations, marketing procurement may need to reinvent itself to make sure it is bringing value that stakeholders need.
According to Bill Duggan, group EVP at the ANA, “Procurement can still bring significant value to marketing. Procurement provides expertise in areas that are beyond the skill sets of most marketers. That allows marketers to do what they do best: marketing! At the vast majority of ANA member companies, marketing procurement is not going away.”
The survey, sent to all ANA member procurement professionals, was conducted between November 13–17. There were 148 responses.
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About the ANA
The ANA (Association of National Advertisers) accelerates growth for marketing professionals, brands, and the entire industry. With a mission to shape the future of marketing, the ANA sets the agenda for the industry, connecting its members to unparalleled expertise, industry-leading resources, and an influential global network. Representing over 1,600 companies — including 1,000+ client-side marketers, 600 marketing solutions providers, and 20,000 brands — ANA members collectively influence $400 billion in annual marketing spending. By championing the 12-point ANA Growth Agenda and the CMO Growth Council, the ANA drives actionable change, empowers marketers, shapes the marketing ecosystem, and delivers exceptional experiences at every touchpoint. Since 1910, the ANA has been setting the agenda for industry transformation. It enables marketers to advance their ambitions, make better decisions, and create lasting impact for their organizations and the industry.
Contact
Duke Fanelli
ANA
dfanelli@ana.net
212.455.8030