The PepsiCo decision to eliminate its global marketing procurement department last year has left some questioning whether there is still a role for procurement.
Ad Age explained the move as being motivated by the need “to improve speed and flexibility in an era in which brands must pump out marketing content on a weekly and sometimes daily basis”, but we believe this assumption to be flawed, and indicative of a general misguided faith in metrics that is leading online advertising down a dangerous path.
Brands are understandably tempted by the instant feedback mechanisms of social media and measurable clicks or impressions offered by ad platforms. The digital era has given advertising campaigns immediate and incontrovertible proof of value. Or has it?
Adblocking has been steadily increasing as targeting scripts and volume of advertising bloats web pages. There’s a pretty good chance that many of the people turning to adblocking are the same people who were successfully reached by these advertising campaigns.
Suddenly those numbers probably don’t seem so positive, especially when brand aversion through overexposure is factored in. Everyone who spends time online has experienced the creepy feeling of being followed by ads. No brand can benefit from being tarred by that disturbingly sticky brush.
Procurement has had its part to play in bringing about this situation, with zealous pursuit of savings and value pushing many advertisers to opt for unsustainable below-the-line techniques in order to justify and make the best of lower budgets. Because online advertising has become so focused on delivering data, chasing metrics has become the only measure of value, regardless of how the ad ultimately reaches the consumer. Ads can be pop-ups, interstitials, pre-roll, noisy, animated, targeted, or just plain shoved in the face of a website visitor as long as they get seen by enough people enough times.
That’s not value. That’s a good way to make your audience hate your brand and lose them in the long term.
Procurement departments often point out the benefits to be gained from short-term tactical thinking, but this tends to lead to the very problems described above. On the other hand, procurement also has the potential to enjoy a unique overview of how a brand is marketed, and to decide to judge success by different measures, instead focusing on long-term indicators of value and a deliberate move away from transactional, below-the-line methods.
The tension between strategic and tactical is nothing new for procurement executives, but adblocking is a relatively new factor to consider. To solve this problem, data does not need to be ignored or discarded. In fact, more data is needed, along with KPIs that track more than just immediate responses to ad campaigns and cost saving. Online advertising platforms can deliver some very convincing data and make it tempting to assume that value is being generated, but it can also be dangerously incomplete data, lacking information about how a brand will be affected in the long term.
The role of procurement in recognizing this mistake before it is too late may be its greatest role yet.
In contrast, jettisoning strategic thinkers in the drive for speed and flexibility is a risk that Pepsi might be willing to take, but we’re not convinced that they have a good line on crystal balls just yet…