Clients Miss Savings By Alienating Procurement Staff
The majority of European procurement directors are being kept in the dark about how much their marketing departments spend on advertising, according to new research from spend management company, Ariba.
The survey of Europe’s biggest spending companies across a variety of industries found that 40% procurement directors have no visibility of advertising spend, even though the majority felt that savings could be made by working closely with the marketing department.
It also revealed the depth of suspicion that marketing chiefs harbour against the procurement colleges. Around 60% of procurement directors feel that marketers are suspicious of their intervention and a further 20% say marketers accuse them of interfering with supplier relationships.
Almost 40% of procurement directors say that quantifying the creative process is the hardest problem to overcome when procuring marketing services, while 30% say that managing supplier performance is the most difficult issue to deal with.
According to the study, marketing departments remain doubtful of working with procurement teams. Around 20% of those surveyed say marketers believe procurement is simply trying to reduce their budget and 30% believe the marketing department thinks they lack an understanding of the marketing creative process.
Commenting on the study, Steve Muddiman, Ariba’s vice president for EMEA marketing, said: “The fact that marketing spend makes up between 5% to 10% of a company’s overall spend means procurement must start to work closely with the marketing department to help bring more strategic long lasting relationships with suppliers and ensure spend is properly managed throughout the business.”
The survey, conducted in April and May this year, found that only 20% of procurement directors feel that marketing departments are willing to comply with procurement practices. This indicates that marketers find it difficult to accept the holistic role of the procurement director.
Furthermore, 40% of European companies think the chief role of the procurement department should only be to advise marketing on pricing and contracts, while nearly 10% say the marketers see procurement as a necessary evil.
Muddiman added: “Procurement directors are not just focused on making cost savings. They can actually make marketing budgets go further by helping to set proper performance metrics and review mechanisms to ensure they are getting the most out of their suppliers beyond just best price.”
Ariba: O321 638 7570 www.ariba.com
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