MediaSense and Isba report helps marketers deal with supplier complexity
In a new report from MediaSense and Isba aimed at helping marketers navigate the “maze” of suppliers, the groups have developed a set of 10 considerations to prioritise in managing supplier relations.
The 10 Considerations in Managing Supplier Complexity report seeks to help marketers manage suppliers of all varieties, including agencies of all types, adtech and martech vendors, data providers and media owners, as well as identify the right effectiveness solutions and market research.
The 10 considerations are listed below. The full report can be found here.
1. Understand how procurement can really help the chief marketing officer and chief financial officer: Savings need to generate a profitable return, not merely a cost-reduction exercise.
For example, separating one supplier’s role into multiple pitches, then appointing the cheapest provider for each, could create headline savings but would increase operational complexity.
2. Map your operations: Properly understand and map internal marketing operations and the links with internal functions and external providers. This then enables the analysis that can lead to operational effectiveness.
3. Pitching is (often) part of the problem: Good procurement practitioners recognise that pitching rarely solves underlying challenges if it was not accompanied by internal changes. Consider other tactics that could be more effective than pitching.
4. Supplier selection, management and enablement: Procurement should actively consider not just the selection of suppliers but also their management and enablement.
Supplier management could be spread across departments, such as marketing, procurement and legal, but it is crucial that there is ownership to ensure the delivery of all pitch promises.
5. The new in-housing: Advertisers must reappraise what most critically needs to be “owned” inside the business, leading to a new kind of in-housing that doesn’t focus on low-level execution, such as creative adaptation and paid search.
The focus, instead, should be on building a strong central team with senior capabilities that can properly manage suppliers.
6. As consistent as possible, as different as needed: Suppliers, processes, technologies, contracts, ways of working, use of tech and data and more should all be as consistent as possible across teams and markets without becoming a straitjacket.
7. Integration: Supplier selection often does not take into account the effort and investment required to on-board new suppliers, resulting in silos.
Think about what kind of integration will yield true value.
8. One agency holding group is not a silver bullet: It may be tempting to place all activity into one holding group, in effect outsourcing supplier management to someone else.
However, the hard work of integration, both internally and at supplier agencies, remains broadly the same whether it’s within one holding group or multiple ones.
9. As simple as possible, as complex as necessary: If a supplier can genuinely contribute something unique, it deserves a place on the roster; otherwise it’s important to remove and reduce supplier volumes.
10. From automation to AI: Automation and machine learning have accelerated processes and streamlined workflows, and generative AI can amplify this shift further. However, caution is needed due to legal and brand compliance risks.
Importantly, it can be argued that current fee models do not incentivise incumbent suppliers to innovate with technology that would reduce labour effort. Advertisers should consider “shared reward” models instead.