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Leveraging AI in Marketing Procurement

How to form a strategic roadmap for the future of artificial intelligence, with insights from marketing procurement leaders at IHG Hotels & Resorts and Verizon

By Richard Benyon    October 15, 2024     6-minute read

Rapid advancements in artificial intelligence (AI) are expected to reshape industries globally. In fact, by 2030, AI may contribute as much as $15.7 trillion to the global economy, according to PwC. And the area of marketing procurement is no exception.

AI's potential to revolutionize procurement was a major focus of the 2024 ANA Advertising Financial Management Conference in May. In a survey conducted by Decideware at the conference, more than 80 industry participants (i.e., clients, agencies, and vendors) shared their hopes and concerns about the use of AI in marketing procurement.

Selected by 30 percent of respondents, "efficiency and speed" was at the forefront of attendees' hopes for AI, followed by cost reduction (23 percent) and improved analytics and decision-making (20 percent). Thirteen percent of respondents expressed a desire for AI to help automate routine tasks, creating time for focusing on more strategic activities.

"The shift toward AI-driven work is a productivity multiplier, enhancing our efficiency and effectiveness," says Sopan Shah, chief procurement officer at IHG Hotels & Resorts.

Denis Budniewski, associate VP of marketing investment and transformation at Verizon, highlights AI's role in enabling companies to work faster and more efficiently — especially, he says, in an environment of leaner teams and tighter budgets. "AI is an opportunity for companies and marketers to work faster, more efficiently with better output," Budniewski says.

While respondents show optimism about AI, they also noted concern. Job loss and human displacement (28 percent), along with data privacy and security (23 percent) emerged as major issues, with many respondents worried about the legal and ethical risks (16 percent) associated with handling sensitive information. The accuracy and potential bias (19 percent) in AI models was also a concern.

Many of these hopes and worries are echoed in a recent McKinsey & Co. survey. In the 2024 "Global Survey on AI" report, 63 percent of respondents see operational efficiency as a critical benefit of AI, but an equal percent say inaccuracy is their No. 1 concern, up from 56 percent in 2023. Intellectual property infringement was also a significant issue, with organizations in McKinsey's survey recognizing the potential legal risks associated with AI.

As marketing procurement leaders assess the promises and perils of AI, they must develop a strategic roadmap to foster innovation and establish a plan of action for guiding their organizations through what Shah describes as no less than a renaissance.

"Instead of 'Revolution' or 'Evolution,' I use the term 'Renaissance,'" Shah says. "It perfectly captures the birth of new ideas enabled by AI."

Implementing an AI Action Plan

Shah says there is a need for a dedicated AI steering committee or center of excellence to oversee AI initiatives.

According to Shah, this cross-functional team should include representatives from different departments. "IHG's gen AI cross-functional team includes VP-level dedicated members from our technology organization, innovation experts, and professionals from marketing, finance, and procurement," he says. Shah notes that, as a group, they help to ensure a holistic approach to AI governance, aligning all departments with company policies and regulations.

Together the committee members can establish an action plan to govern AI usage and effectively implement AI in marketing procurement.

Any organization's plan should heed the hopes and concerns identified in the Decideware survey, as well as offer a roadmap for leveraging AI to enhance procurement processes. One such plan, outlined below, divides the process into four key steps.

1. Implement AI with purpose.

To successfully integrate AI, it is essential to implement it with a clear purpose that adds value to the organization. AI tools should be integrated into key operational tasks such as scope of work preparation, production auditing, and agency performance reviews. By helping to automate key parts of these processes, AI can significantly enhance efficiency in reporting and data analytics, allowing procurement professionals to focus on more strategic activities.

A practical approach involves reviewing end-to-end agency management processes and identifying areas where AI can provide the most benefit. This could involve using secure versions of AI tools like ChatGPT, Gemini, or Copilot for common tasks, or investing in dedicated AI solutions tailored to specific marketing procurement use cases.

2. Educate and train teams.

Education and training are critical to a successful AI implementation. Investing in training helps teams understand AI's capabilities, benefits, and risks. It's particularly important to focus on governance and inaccuracy, ensuring that teams are well-educated around the potential pitfalls of AI and how to mitigate them.

Shah emphasizes the importance of flexibility and building new competencies as a part of the core thinking in AI implementation. He notes that "AI will change job roles and skills, requiring professionals to embrace and adapt to new AI-driven processes."

The McKinsey survey underscores the importance of this step, noting that high-performing organizations often implement comprehensive governance practices for AI, including early involvement of legal functions and embedding risk reviews in the AI development process.

3. Establish clear governance and ethical guidelines.

Clear governance and ethical guidelines are essential for responsible AI use. These frameworks should ensure that AI complements the skills and experience of procurement professionals while preventing and addressing errors and biases in AI systems.

"Governance, information security, and privacy are critical to ensure AI models are trained correctly, avoid bias, and maintain accuracy," Budniewski says.

One recommendation is to establish defined governance criteria for selecting AI tools. This involves creating a governance framework that includes risk identification and mitigation strategies, as well as measures to ensure AI systems are accurate, unbiased, and compliant with company standards.

Budniewski points out that many organizations are now rethinking their agency management agreements to account for AI, emphasizing the importance of updated contracts to protect all parties involved. "All clients are rethinking and relooking at their agency MSAs [master service agreements], particularly indemnification and legalities in the use of AI," he says.

4. Develop a balanced approach to AI and human insight.

A balanced approach is key to maximizing the benefits of AI while preserving the value of human insight. AI should be used to handle data-heavy tasks, while humans focus on strategic decision-making and relationship management. This "human-in-the-loop" approach ensures that AI enhances, rather than replaces, human intelligence.

Shah views AI less as a substitution for human intelligence and more as a way to enhance it. "AI augments human intelligence, enhancing our ability to make informed decisions rather than replacing us," he says.

Budniewski also provides a reassuring perspective on this issue. He points out that in marketing procurement, where teams are often lean and projects are numerous, AI may be more likely to augment human roles rather than replace them. "There is more work to do than ever before, with tighter budgets and smaller teams," he says.

The McKinsey survey also highlights that high-performing organizations maintain a balanced approach, combining AI's capabilities with human oversight to ensure optimal outcomes. These organizations are more likely to have an enterprise-wide council or board for AI governance, ensuring that AI is integrated responsibly and effectively across the organization.

Clearing the Path to an AI-Driven Future

Marketing faces a technology renaissance. And as AI continues to evolve, marketing procurement professionals must stay informed and be proactive, ensuring that AI serves as a powerful tool to enhance their work rather than disrupt it.

With thoughtful implementation and strategic planning, AI can help marketing procurement professionals unlock new levels of performance and value for their organizations.

Decideware is a partner in the ANA Thought Leadership Program.