Marketing Procurement continues to move beyond cost savings and avoidance, to adding value to internal clients. According to WBR Insights 2018, priority KPIs were improvements in marketing ROI, agency performance, brand consistency and innovation ahead of cost savings.
Meanwhile, while investment in sponsorship continues to grow, governance of sponsorship continues to challenge. WBR 2017 Marketing Procurement survey also reported that only 13% of respondents felt able to add value (beyond cost savings) to sponsorship spend.
At the same time, WBR’s report, Building a Future -Proof Marketing Procurement Strategy (2019), reported both experiential and sponsorship in the top four categories of predicted growth .
This clearly reveals a challenge to marketing procurement – how does Marketing Procurement add value to Sponsorship?
We took this prompt to reach out to our extended network within Marketing Procurement in Q1 2022. The full results can be found here – but this is a summary of the results.
Our Survey
Our survey was hosted on Google forms and generated responses from 113 respondents, primarily from Europe and North America. The companies represented were all either publicly listed or of comparable size. Sponsorship for the majority of companies was international in scope.
Our Conclusions
#1 Work in progress
Although some positive examples were evident of a high functioning relationship, collectively, the survey broadly paints a picture of a Marketing Procurement function which appears still to be in an exploration phase with sponsorship – trying to establish the sweet spot of where procurement can add value without usurping the role of the Sponsorship team – acknowledging their specialist knowledge and expertise. A target timescale to achieve a mutually acceptable level of collaboration would set a term on what can be a slow process of relationship-building
#2 Procurement value-add?
It was difficult to see signs of real value-add. This was partly a limit of the online survey format, and partly – as seen in follow-up correspondence – a lack of positive examples. With value-add being defined by the Sponsorship team, it is difficult for Marketing Procurement to add the value they would choose to contribute. Clearly, companies need to decide whether they are prioritizing collaboration or improvement – and the unit of measurement. A shared performance metric around effectiveness or innovation could be a start.
#3 Space for collaboration
Procurement cannot support Sponsorship – nor Sponsorship benefit from Procurement input – without a clear relationship between the two. Sponsorship teams clearly need to own the grand overview of sponsorship practice, and relationship management as well as the deliverables of strategy, activation and evaluation. Marketing Procurement’s role of driving effectiveness, beyond improving governance and process, should surely be to deliver a sharper focus on metrics across the stages of strategy and performance evaluation.
#4 Investment case
There is no standard industry definition of sponsorship strategy but there are standard commercial expectations of any investment case. The sponsorship investment case is the single repository for commercial rationale, strategy, success metrics and recommended investment, as well as the broader issues of governance which relate to major investment and, as such, should logically be co-authored by Sponsorship and Procurement under the direction of Marketing.
#5 The role of sponsorship
A robust investment case of course depends on a clear view of the role of sponsorship within the broader context of marketing, a point made directly or indirectly by a little under 20% of respondents. From our own observations, this is only possible in organisations with a strong marketing orientation and a collective understanding of the relationship between brand and sales.
#6 Performance Evaluation
Given the clear dissatisfaction that exists with sponsorship performance measurement, any reading of these results leads to the inescapable conclusion that Procurement should be looking here – perhaps above all areas – to add value. Given Marketing Procurement’s existing relationship with internal Research and Insight and likely exposure to media and marketing evaluation, Procurement should in principle be able to ensure Evaluation is effective and integrated within a broader performance management framework.
#7 Beyond ad hoc
Questions 5 and 6 show clearly that Marketing Procurement is still all too often employed in a troubleshooting capacity by senior management. Yet the cycle of sponsorship offers a number of key moments which Procurement can leverage to drive performance improvement: strategy development, investment case, contracting with rights-holders and agencies and evaluation all offer opportunities for Procurement to tighten the framework of performance metrics.
Our work with Marketing Procurement tends to focus on four key deliverables:
- ROMI Analysis to evaluate the performance of assets and activations against business objectives.
- Capability-building and centres of excellence to raise the bar across distributed sponsorship and marketing teams.
- Ad hoc SWAT style engagements to resolve acute or chronic challenges.
- The development of governance and process
– all clearly in close collaboration as a trusted partner of Sponsorship.
For more info on our service offer for Marketing Procurement, click here.