Every year, Marketing Procurement conferences address the big questions on the industry’s lips. The answers are reshaping how Procurement teams are operating once they’re back at their desks.
The same topics come up time and time again usually because the scope continues to get bigger, budgets become tighter, deadlines get shorter. This year has been no different with familiar themes of transparency, doing more with less, effectiveness vs efficiency, the advancement of technology, and of course AI all returning to the agendas with force.
For those attending these events, they continue to highlight that Marketing Procurement’s job is far from done. New challenges are forming on top of persisting problems, creating a paradigm which demands Marketing Procurement to adapt at a rate like never before.
Industry veterans, rising stars and marketing players have all taken to the stage to candidly share their challenges, learnings, insights and reflections, painting a picture of what is changing, what it means in practice, and most importantly, what needs to be done to succeed.
The Transparency Problem: it’s not going away!
If there is one theme which unites every conference room, it is transparency. Or, more precisely, the lack of it.
The ANA Financial Management conference in May, featured a 10-year follow-up to its landmark 2016 media transparency study landed with some uncomfortable conclusions.
A decade on, the industry has not moved as far as it should. Contracts are more complex, supply chains are longer and the distance between a budget being approved and money actually working in the market has only grown.
As the old adage goes, knowledge is power, but in today’s world, data is power and for Marketing Procurement it means greater transparency too.
In an effort to gain clarity, teams need to turn to data-focused solutions which enable better visibility into what has traditionally been an opaque market and embrace an even deeper understanding of their marketing spend.
What are you Buying?
Principal buying, where agencies purchase inventory media and resell it to clients at a markup, emerged as a contested topic this year. It is not a new practice, but scrutiny is intensifying and with it the call for a better understanding of value.
Marketing Procurement teams are increasingly being asked to understand not just what the costs are, but what they are actually buying and from whom. This distinction matters enormously, especially when it comes to benchmarking. Without real transactional data, what brands have actually negotiated and paid for, not what agencies publish on a rate card, it becomes difficult to build a credible picture of fair value.
A key learning from this year’s conferences is straightforward: evaluating contracts is no longer enough. Marketing Procurement needs a greater understanding of what value means to their stakeholders and the data that underpins decisions, in order to ask better questions of its agency partners.
Consolidation: does it really mean less complexity?
A dominant conversation at this year’s conferences was the shift away from sprawling agency rosters toward fewer, more embedded partnerships – the enduring consolidation versus fragmentation argument.
But, this year Marketing Procurement professionals were asking whether consolidation is always the right answer.
Consolidation has become more attractive. Fewer, deeper agency relationships rather than a fragmented roster of hundreds of partners is the direction of travel that many global brands are heading.
But, consolidation needs to be strategic.
Streamlining is only beneficial if the consolidated agency model still meets the requirements of the brand, including the ability to competitively test the market. This is where benchmarking data becomes critical; when you reduce the number of agency relationships, the need to ensure pricing is competitive becomes an even more essential step in the process.
A consolidated roster is only as strong as the data sitting behind it. If you cannot point to a benchmark for comparable deliverables, you have no real basis to challenge a rate, resist a fee increase or validate if your retained partners are still delivering value.
For some brands a consolidated agency roster will not be the right approach, however, the need for benchmarking remains.
When you have dozens of agency relationships, each operating on different fee structures and rate cards, inconsistency becomes almost impossible to spot. Costs creep up quietly and often simultaneously, which means without a common benchmarking tool, like RightSpend, to measure and track against, years of unchallenged fee inflation can accumulate before anyone notices.
Efficiency vs Effectiveness
Perhaps the sharpest challenge to traditional Procurement thinking this year was covered over MxPiQ‘s second day, where the overarching theme focused on “deliver better, not more”.
For teams that have historically optimized for cost per asset, this is a genuine reframe.
The metric is shifting from efficiency to effectiveness but, Marketing Procurement need to pin down how effectiveness is measured, which undoubtedly involves selecting the right metrics and access to quality data. However, with efficiency still being a key element of procurement’s role, success will most likely come from balancing both metrics rather than treating the shift as an either/or choice.
AI: everything, everywhere, all at once
AI, of course, featured on every agenda, in every session, at every conference.
What separated the most useful conversations from the noise was a willingness to move past the excitement and ask the harder questions: how do we govern it, procure it and measure its impact?
The framing that resonated most was AI as infrastructure. Not a magical solution, not an existential threat, but a set of capabilities to be embedded into workflows, with appropriate guardrails, in order to deliver consistent value.
Technical advancement does not necessarily mean greater commercial gains. Simply using AI for the sake of it is not the right approach, it must have business rationale. Because, while one company might be leading the pack on its uptake of AI, it might not be right for your Marketing or Procurement process.
Agency Compensation in an AI world
The compensation question is where things get genuinely complex. If AI is performing work that was previously billed by the hour, the traditional labor-based agency model starts to shift.
Brands with significant tech spend embedded in their marketing supply chain, are discovering that buying AI tools, platforms and infrastructure requires an entirely different skill set from buying creative services or agency time; a specialization that is only going to deepen and get more complex.
The ANA’s Financial Management conference revealed just how much pressure is building citing seventy-four percent of global advertisers are seeking outcome-based compensation. However, the number of those ‘seeking’ compared to those actually putting outcome-based compensation into practice is very different.
Marketing Procurement might be uniquely placed to lead the conversation on agency remuneration, but they must do so based on what the data and insight is telling them, not assumption. Because, the reality appears to show many brands are still just trying to find the best approach for them.
The Path Forward
On top of all of this, Marketing Procurement are also contending with vulnerable global supply chains, geopolitical tensions and economic uncertainty, which continue to ripple through marketing budgets in ways outside of Procurement’s direct control.
In this environment, Marketing Procurement has a unique role to play. It must be the common sense in the room, bringing the outside world in and cutting through the noise of whatever is trending that quarter. Staying focused and strategically supporting their Marketing colleagues.
Not every shiny new model, tool or trading structure showcased at industry conferences deserves a place in your brand, knowing the difference is the art of a Marketing Procurement professional.
Industry conferences do tend to create hype and noise about transformation, so it’s crucial to avoid driving change for the sake of change. We all need to ensure we’re striving to be the arbiter of common sense and bring back to the office applicable ideas from the presentations.
Each year, the demands on teams expand in breadth and depth. However, the profession, full of bright minds, continues to adapt and evolve in the face of fresh challenges.
The brands that are thriving are not necessarily the ones with the biggest budgets or the most resources. They are the ones who show up with the right data, the right questions and the credibility to drive the conversation rather than simply respond to it.
