Marketing procurement here to stay despite PepsiCo’s axing of it, ANA survey says

More than two-thirds of procurement and financial professionals say that PepsiCo’s recent decision to eliminate its marketing procurement department will not become an industry trend, according to a survey of 148 Association of National Advertisers (ANA) members.

The survey comes after Ad Age reported last week that PepsiCo has decided to scrap the department and will shift responsibilities to brand executives to speed up efficiency. The company’s brands include Gatorade, Quaker, and Mountain Dew.

Of the ANA members surveyed, 68 per cent said that PepsiCo’s move is not indicative of a wider industry trend toward the elimination of marketing procurement departments. Another 15 per cent said that they do think the firm’s move could be a signal of more to come while 17 per cent they didn’t know or weren’t sure.

In the survey, a number of respondents cited reasons for why they think that PepsiCo’s decision does not necessarily mean other companies will follow suit. Some said that brand teams don’t have the necessary skill sets, such as contracting and supplier management, to handle marketing procurement. Others said that if marketing teams become responsible for procurement, they risk becoming less effective.

Bill Duggan, group EVP of the ANA, said: “Procurement can still bring significant value to marketing. Procurement provides expertise in areas that are beyond the skill sets of most marketers. That allows marketers to do what they do best: marketing! At the vast majority of ANA member companies, marketing procurement is not going away.”

Earlier this year, the ANA released a survey that said both clients and agencies are “lukewarm” on the value that procurement adds to client-agency relationships. Only 10 per cent of agencies said that it was valuable along with 47 per cent of clients.

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