Why you’ll need to engage more with marketing procurement in 2022

Back in July this year, as the UK economy at large started to re-open its doors, my predictions were:

'Tis the season for predictions and priorities

• Big corporates will have been drained of cash reserves as they fought to survive

• Once the doors opened again, big brands would need to concurrently shore up their balance sheets and drive growth – not an easy task

• This would mean chief marketers needing to get more for less (for example, procurement-driven cost reduction), increasing investment in martech/digital and stretching payment terms with their agencies

So, for this month’s column I’m exploring:

• Were my predictions right?

• Why you’ll need to engage more with marketing procurement in 2022 and what their priorities are likely to be

• What does it all mean for agencies?

Were my predictions right?

Like all crystal ball gazers, we’re always right some of the time. The answer is, it was very much a mixed second half of 2021. Based on my discussions with agencies and opinion leaders, plus various market reports, here’s some of what happened:

• If you’re specialists in digital transformation, your order book was full and you couldn’t find enough skilled people to do the work

• If you’re in e-commerce, 2021 as a whole went well and marketing budgets have increased

• Across all sectors, there was more scrutiny by marketing on agency value/ROI

• Marketing procurement became more pervasive as marketing budgets remained under pressure throughout 2021

• Procurement weren’t just going after agency costs – they wanted more for less, payment terms were stretched and there was a shift away from long-term retainers to more short-term projects

There were a few agency owners saying that the markets are back and growth is now on the agenda, but many were taking a more cautious view.

All this tells me that marketing procurement will be a key driver of value in 2022 and beyond. If you work with big brands and enterprise clients, you need to get to know procurement better and understand how you can deliver what they need, as well as serve the needs of your marketing stakeholders.

Procurement’s (likely) priorities for 2022 and what you should do about it

‘Tis the season for predictions and priorities. This is my opinion on what will be increasingly important to marketing procurement in 2022:

• Sustainability, ED&I and ESG – and it’s never going off the agenda, thank goodness

• Savings that deliver growth – aggressive slash-and-burn cost reduction isn’t going to cut it

• Technology enablement – taking advantage of the increased global adoption

• Building flexible SME supply chains – brands want to access niche/deep expertise and recognize they need to support the unique needs of these smaller/innovative firms

• Commitment phobia – the last couple of years have reminded us of the risks involved in making long-term commitments

Conclusions: what does this mean for agencies?

You don’t need to be a soothsayer to predict that 2022 is going to be a tough year for marketing teams and agencies. There will be tough negotiations ahead, especially with procurement, and it’s always about more than price.

If you work with big brands/enterprises, three must-haves to put into your 2022 business plan are:

• Agility and flexibility: review your commercial and operating models to ensure you’ve got flexibility to ramp up and down costs/resources at relatively short notice

• Sustainability and inclusion: really understand and map out how you’re going to deliver on this for your own business and your clients

• Proactively engage procurement: understand their needs way in advance (12-18 months) of the RFP turning up and be prepared for tougher negotiations

My catchphrase for 2022: “The prepared mind wins the day.” So get your best negotiating shoes on and click your heels together three times, Dorothy!

If you have any comments or questions about anything in this article, I’d love to hear from you. Drop me an email.

Mike Lander is the chief executive officer and founder of Piscari, which empowers agency leaders with better negotiation skills and insights into how procurement professionals work.