Reimagining Agency Procurement Models in a Tech-Driven World

The digital revolution has completely transformed the way media is consumed. Print, TV and cinema are no longer the prime targets for marketing. Mobile traffic has rocketed, with 56% of millennials consuming about a third of online video content on their smartphones. Millennials are also much more likely to turn to social media for recommendations form peers or social media trends rather than media professionals.


Given this current commercial atmosphere, it’s crucial that marketing procurement embraces contemporary strategies. Marketing procurement models have had to evolve at breakneck speed to keep up with advances in digital marketing, and agency procurement experts look at branding and advertising partners with much greater scrutiny now.

Aligning Agency Procurement Strategies with Modern Demands


Back in 2013, PepsiCo changed its procurement strategy and instituted an approach they called “Galaxy”. A number of PepsiCo executives with expertise on account planning and management were sent to select talent from the massive talent pool of the Omnicom network. They created a diverse team comprising of the crème de la crème. Brad Jakeman, president-global beverages group, said, "That’s where the efficiency comes in; we're not buying a whole agency infrastructure. We're curating the exact number of people at the exact seniority with the exact capabilities we need." This team reaped the benefits of broader brand experience and a more comprehensive awareness of market trends.

Last year in July, PepsiCo went for a creative review in the United States, where it considered a handful of Omnicom group agencies. In an attempt to constantly evaluate the best way to market the brand, the company yet again zeroed in on Omnicom for custom creative solutions.

The closer involvement of the company in marketing procurement decisions is a phenomenon sparked by the need to generate greater and more nuanced value from the agency’s activities. It involves a meeting of interests from marketing, executive and procurement, in order to bridge gaps between key modules in the enterprise’s operational spectrum.


In fact, Marc Strachan, VP of Premise Strategy and Multicultural Marketing for Diageo also believes that collaboration is the best way forward for creative procurement agencies and management. While speaking at the ANA Advertising Financial Management Conference in April 2015, in Phoenix , Strachan stated that marketers and agencies could forge more productive interactions by exchanging personnel for a few months to better understand both departments.

Junior marketers often lack insight into what agencies do, and employees of agencies could benefit from a closer look at the time constraints and pressures of marketing executives. Emphasising the growing diversity in agency procurement models, he added that it’s critical for a marketing procurement personnel to have some background in agency operations.

Today, digital advertising models have begun to dictate the focus of procurement. It’s not enough to judge simply the content of a campaign. Advertisers need to find ways to convey content to targeted customers who spend hours on the internet being bombarded by adverts.

Marketing procurement must target agencies with developed in-house marketing stacks and analytics. Agencies need to be equipped with solutions like cross channel measurement and attribution, programmatic media display for emerging formats, and cross channel audience identification. In tandem with the marketers’ knowledge of their customers’ preferences, procurement can choose agencies best equipped to help them attract the right customers.

Charting a Roadmap for the Future

While the growth of digital advertising has had many benefits for modern marketers, it also poses new risks for brands by making them vulnerable to negative publicity. Unsavoury and extremist interactions on social and online platforms can destroy a brand’s image. This is what prompted several brands to revisit their advertising models and the associated agency tie-ups.


Recently, Unilever, one of the world’s largest digital ad spenders threatened to pull out ads from digital platforms like Google and Facebook, stating that consumer trust on these platforms were at a new low. This move didn’t just highlight the power of big enterprises in addressing issues that matter to the public. It also underlined the complexity of delivering brand message with a purpose, especially in an environment where technology is transforming the conventional rules of marketing, and consumers enjoy more control than ever.

In the face of such large-scale transformations, several enterprises are looking to create in-house advertising teams to gain more control. Naturally, this has exacerbated concerns about cost. Often, marketing procurement pursues a system of performance based pricing in which the client pays for conversions and goal accomplishment. This can be particularly effective in the future business landscape.

Armed with an understanding of marketing goals, procurement teams can help marketing make more informed decisions about price, and negotiate competitive rates for contracts that add value to an enterprises’ marketing processes.

Make sure to download the ProcureCon Marketing agenda to check out all of the great activities, speakers, and sessions planned for this year.

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