As PepsiCo eliminates marketing procurement, what should take the place of this function?

Before we crack open the munchkins it’s probably worth taking a look at the implications of this latest announcement from PepsiCo.

We all know it’s a favourite agency pastime to bemoan the involvement of procurement and it’s not without some cause. All of us have sat across the table at some point trying to explain the impact heavy-handed procurement can have on the success of a business or brand. At its worst the conversations are disconnected from the realities of modern marketing and undermine the ambitions of the business, resulting in at best average performance.

Militantly managing rosters and ratecards too often reduces the process to turning the handle on a sausage machine. Agencies struggle to resource properly against the business in an attempt to preserve some sort of margin, and the client gets more sausages as a result. I like sausages as much as the next man but they’re not in short supply (insert own joke here). So without doubt we need a different approach.

All credit to PepsiCo for taking a step towards making a change. In an era where it’s no longer OK to be a credible choice (a sausage), where the brands that are winning play an active, vibrant and visible role in the flow of people’s lives, what should take the place of this function?

It seems that PepsiCo have put the onus on marketing and category directors. I agree this allows them to more quickly balance the cost value and quality in their decisions. They are less beholden to contractual relationships agreed at Sausage Factory HQ that are slow and not fit for purpose. We know from experience there’s little more frustrating for a marketing director or an agency than to have a global contract shoved down your throat, preventing you doing something brilliant together.

However, it can be tricky balancing the day-to-day, the like-for-like sales, plotting the long-term course of a brand or business with the nitty gritty of what stuff costs. Am I getting good value or not? Can I afford this?

I say we need to reframe the debate. What is it that I need to do and how can I best achieve that? Brands need to be built with people, have purpose, create innovation, shape culture and really engage. The question is how to navigate this complex environment, to stop operating in silos and start benefitting from the multiplier effect that a true joined up approach can bring, an approach that starts with the problem not a 30” TV spot or nifty social campaign (although either could play a part in the solution).

It’s not about taking a blind punt, although good old-fashioned intuition can play a part. Being clear on what we’re shooting for, having the right metrics in place to understand the impact of what we’re doing is key. We work in partnership with our most successful clients to create dashboards that over time give our clients more and more confidence in their decision-making.

Equally, is there a place for an evolution of that procurement headcount? I think yes. It’s hard to be an expert in everything and we all know there is enough snake-oil salesmen out there ready to prey on our collective ignorance. What if it was someone’s job to help navigate the blurring of media and content, shake up the buckets a bit and set the pace for spend on innovation within an organisation? These people are few and far between but they should be more prevalent.

From a headcount perspective they may not sit conveniently in a particular pot but then neither do the people who buy your products. If they’re good they should be able to offer an impartial view, help brands and businesses plan an approach that works for them in this era defined by participation.

Ding dong! It’s not all about wicked witches, there are good witches too. If clients and agencies are to do something truly different, inspiring, useful, valuable, memorable, entertaining, I think we’ll need a few of those.

Adam Wright is a managing partner at iris