Ebiquity sponsors Procurecon Europe with good reason – it’s a great opportunity for global clients, predominantly from the Marketing and Procurement Marketing community to network, share ideas and discuss industry challenges.
Procurecon Europe 2017 key themes centred around improving ROI, measurement, and efficiency of media spend. They also discussed how the Marketing Procurement role can better support the supplier process – not surprising with over 3,000 tech suppliers in the digital marketplace to comprehend. Sourcing teams need to take greater responsibility to enable marketers to navigate this complex landscape. They need to choose the appropriate partners, in the most efficient timeframe, linked to delivering the most effective ROI and not simply be another layer in the decision-making process that focuses on cost savings. This was borne out by the Globality study that determined the RFP process was broken and that to improve the process, procurement would be better served by reducing the number of supplier invites.
This was echoed at the ‘Demystifying Digital’ round table held on day three by Ebiquity’s Head of Digital, Tim Hussain. Clients discussed the gaps in their knowledge especially when determining what are the most appropriate KPI’s to measure their digital marketing performance. Whilst they agreed they needed to invest more into digital measurement services they were – as a collective – unsure as to the best approach. Many felt it was the responsibility of their agency to deliver digital governance but accepted that this could be a conflict of interest given some have vested interests in the tech companies that supply measurement.
The consensus was that clients should take greater responsibility to understand the tech supply chain and, where possible, investigate how they can own the contract for the ad verification services.
Ebiquity experts, Nick Pugh, and Tim Hussain challenged the Procurement audience further by asking…‘Is there anyone in the room who understood what the ROI was from their digital advertising investment?’…..no hands were raised. They then asked… ‘How many of you here today feel your business would support the case to REDUCE marketing investment in digital advertising?’…surprisingly again, no hands raised. The conflicted response fed into Nick and Tim’s presentation, where they posited the imbalance of psychological behaviour versus empirical evidence (a conundrum that considers why an emotive decision to increase investment into digital media does not contain the same rigour of performance measurement that is applied to traditional media).
The challenge for marketers – and this is where procurement can help – is to move away from confirmation or availability bias….i.e. cognitive behaviour that looks for the evidence to support your strategic decisions. As opposed to using actual statistical data to determine the strategy. Pursuing the ‘test and learn’ approach clients will learn where, how and what part of their digital activity is working and then, using empirical data, they can determine the appropriate level of digital investment.
A panel of leading global advertisers then mused over, what was interestingly titled ‘The Trust Crisis’, whose responsibility it was for digital investment – the client or the agency? The first step for procurement, particularly when looking at digital buying models, is to ensure they have a contract that is fit for purpose. Reference was made to the recent ANA/Ebiquity study on the media transparency in the US and the question posted was whether ‘any learnings had been applied’ off the back of this report.
One area considered, that brought mixed levels of response and understanding, was the idea to own your data. Ownership of key measurement data will allow clients to have a greater understanding for the digital ROI and therefore clients can make better informed strategic decisions – without necessarily requiring so much agency help.
However, client’s begged caution that it was important to ensure you have the right people to make sense of the data. Owning it is only one part of the challenge – you also need to ensure the data is accurate, managed correctly and that you have the appropriate team to analyse the data. Whilst you could argue this is not ‘new news’ the procurement function is still under pressure to help deliver greater transparency and greater ROI….so these ideas need to be considered.
This year’s event had a more optimistic and self-governing feel about it. Each session, albeit deep-seated in some big challenges, felt like clients wanted to take greater responsibility and ownership for solutions….where they could determine their own future. Deeper knowledge of the digital eco-system, tightening over contract clauses, and strengthening of agency relations…..were all highlighted as the key areas for improvement. This was then cemented by an overarching agreement that digital governance should be the clients’ responsibility.
That said it was universally agreed, from all sides of the triparty eco-system….Client → Agency → Supplier…..that procurement cannot do this on their own. Sometimes the frustration was that procurement tries to be ‘lone rangers’ in their attempt to deliver efficiencies. Tina Kataria, Western Europe Procurement Director at Coca-Cola expressed the importance to ‘create alliances, not suppliers’….to ensure there is an ‘interplay with your business’. Creating a network of people or businesses, who are prepared to share ideas to reach a common goal, will deliver more insightful results in a more timely fashion for your business.
Key thinking from Procurecon Europe
- Procurement should consider sharing the same KPI’s as the CMO –if not working alongside them
- CMO, CPO, and CFO should align on KPI’s so that Procurement and Marketing work more collaboratively towards business objectives
- Consider a ‘Media Council’ – that consists of Procurement, Marketing, Finance, HR and IT. All key stakeholders for business growth and efficiency, that can make collective decisions
- Acknowledge the vested interests of those proposing digital media solutions for your business – beware of the simplified KPI’s as these might not be the effective measures for ROI
- Don’t be afraid to challenge existing marketing rationale
- Investigate owning your digital measurement tool(s)
- Move beyond silos and understand whole customer path-to-purchase to right-size digital investment
- Implement on-going test and learn culture to build digital ROI knowledge base
- Ultimately seek guidance – build a knowledge base that will allow you to provide quick, insightful advice to your marketing teams from vetted suppliers.