Warc Blog

Centralisation key to procurement

4 July 2012
BRUSSELS: Companies deriving the most value from marketing sourcing and procurement typically centralise spend management and take a cross-functional approach, research has revealed.

The World Federation of Advertisers, the trade body, polled 45 major advertisers, the best-performing quartile of which awarded themselves a rating of 82% in terms of delivering "effective and efficient marketing", up by four points on 2010.

Moreover, the upper middle quartile posted 56%, a lift of six points in the same period. The lower middle quartile logged a three point leap to 37%, but the bottom quartile was off by eight points to 12%.

Some 76% of organisations in the top quartile stated that goals and targets were aligned and shared across different functional teams, compared with 39% for all companies assessed by the analysis.

Equally, 71% of corporations that had adopted best practices utilised multi-functional teams featuring marketing and procurement/sourcing staff when building annual plans, more than doubling the 31% recorded by the entire sample,

An additional 65% of enterprises in the first group had a marketing leadership team which positively encouraged cross-functional working from planning to execution, declining to 43% for the second.

Meanwhile, 47% of the category-leading businesses deployed teams comprised of staff from various disciplines in the post-evaluation phase, as did just 14% of their less successful peers.

By contrast, 60% of organisations centrally managed media budgets, a total that remained constant across all companies.

However, 70% of top-ranked players handled advertising creation in such a way, contracting to 49% for the whole panel. These figures stood at 50% and 38% for advertising production.

Exactly half of the players yielding the best results had also consolidated control of their outlay on digital, web and search activity, hitting 26% overall. This gap closed to 20% and 14% for below-the-line agencies.

More broadly, 57% of participants agreed they managed money tightly and had cost-efficient ways of working, matching the score of those believing their roster contained the strongest agencies and suppliers.

A relatively modest 39% thought their firm boasted an effectively integrated and streamlined approach to managing their activities, and 38% had mechanisms in place to secure continuous performance improvement.

Data sourced from World Federation of Advertisers; additional content by Warc staff

 
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