UM CEO Mat Baxter: ‘Put procurement back in the box where they belong’
Powerful marketing chiefs have the ability to “put procurement back in their box where they belong” but too few CMOs are rising up through the ranks to have such influence, UM chief executive Mat Baxter has said.
Speaking at the Publish conference in Sydney today, Baxter said it would be in “everyone’s interest” if procurement departments were only part of the process of selecting agencies “rather than the dominant part they are at the moment”.
The comments came in a wide-ranging panel discussion on the relationships between media buyers, publishers and marketers.
Baxter said boards, CFOs and procurement staff are increasingly demanding to see hard data when they buy advertising space. To that end, he urged publishers when pitching for business from media buyers to supply better metrics which can then be communicated by the agency to the client.
“They (clients) don’t care about soft measures. This is the new reality. They want to see that if I spend a dollar here I’ll sell something over there.
“The guys with the calculators are looking for that relationship yet we are still talking largely as an industry about the soft measures and it’s a real problem.
“We have to adjust our language and our discussion otherwise we come off as the fluffy people in the room, when it’s all about the feeling and the vibe, and these accountants and CFOs say ‘these guys are nuts’.
“They are thinking ‘these guys are the marketing fluff’ and then we wonder why aren’t we on the board and sitting at the top table. That’s the reason. We are not having the dialogue that big businesses and the serious people in the room are having. We have to evolve to address that.
“If you had marketers on boards they could put procurement back in their box which is where procurement really belongs.
“It’s in everyone’s interest to see that happen because procurement will be just part of the process rather than the dominant part of the process which is what we have at the moment.”
He told delegates that “powerful and intelligent CMOs” who have influence in their organisation can push back against procurement who want them to employ the cheapest rather than the best agency.
“If the CMO is empowered they can have that influence,” he said. “The problem is that empowerment has not happened yet because they are not rising to the top of their organisation.”
Baxter told publishers they must provide information to buyers at a “granular level” rather than be “obsessed” with the reach of the audience.
He added that print firms work hard to arrange meetings with agencies and clients but then shoot themselves in the foot by showing 20 meaningless slides about their audience – information the client already knows.
“My eyes glaze over when that happens. It’s a waste of everyone’s time,” he told delegates. “They are way too reach obsessed and if you play the reach game you will lose every time. We have to move on.
“Very few publishers can tell you I know that advertising sold this many products, and that level of accountability needs to be better.”
Steve Jones
couldn’t have said it better myself
User ID not verified.
Well said Mat.
And with everyone playing the reach game to get the biggest possible number they all converge to look roughly the same.
A wiser person than me once said ‘the devil is in the detail’.
Show us the detail, tell us how that will work for the brands we advertise and watch the wheels start to turn.
User ID not verified.
Sadly, this is akin to Chamberlain’s “there will be peace in our time” appeasement. Procurement is global and Australia is the last to see it. It’s global and inevitable. Just ensure it’s the collaborative Procurement 2.0 and not the old procurement 1.0 (aka the purchasing dept).
To say ‘put it back in the box’ is at best naive, at worse ignorant.
User ID not verified.
To me this still shows there is a real rotten problem is large corporates in communication, ego and a silo approach. It should not be about ‘Marketing’ or ‘Procurement’; those should simply be the departments who specialise in executing the mission on the company. In startups you don’t get ‘this department’ vs that department’ because the vision and leadership is very strong and everyone knows what the company is trying to achieve. If everyone worked with priorities being Company > Department > Team > Self instead o the other way around then maybe everyone could actually work together. The answer? Well CEO’s need to spend more time ensuring that their teams understand the goals of the company are getting them aligned.
User ID not verified.
Good on you Matt one of the few who actually tells it like it is
User ID not verified.
I agree with Cub.
Marketing is a large expense for most large corporates and as such, and quite rightly, they will look for best bang for their buck/ best return on their large investment.
Most procurement departments I have worked with have been great – yes they are thorough and time consuming but that is all part of the process.
User ID not verified.
As much as I would like to put Mat Baxter back in the box (where he usually belongs) on this latest outburst, he is spot on. And if I could add to that, it’s not procurements fault they have become so powerful, it’s actually marketing departments for letting that happen.
Some clients I see, have marketing collaboratively with procurement supporting, and marketing make the end decision. Sadly, this is not the majority.. Many more are more likely to see procurement have a dominant say in the decision
User ID not verified.
Either/or fights over the right to decide get businesses nowhere. I can understand the argument if you have blinkered procurement who seem to have little interest in the overall business and only want the price to reduce.
However good procurement is much more than that. Finding the best suppliers to work with, who will help you achieve and maintain your decisive competitive edge requires particular skills that rarely exist in other functional specialists. Putting procurement in their box is like having a soccer team without a specialist goalkeeper. Of course other players can play in goal, but if you want world class you are better with an alligned team of experts.
Not either/or, it should be both specialists and a team.
User ID not verified.
I wonder what kind of Procurement people he’s been working with. This could be just as worrying as Tim’s recommendations, i.e. one bad Marketing-Procurement experience can spoil it for many of the rest of us.
It can come from Procurement generalists coming into the Marketing Services category OR inflexibility from Procurement/CPO in agreeing different or ‘carved out’ KPIs in this spend area.
Thanks for the article.
David
User ID not verified.