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By Christine Moore
Chris Kenna, Chairman & Founder of Brand Advance Group, explores how to gain better understanding of the ways in which marketing procurement can really help drive the important and industry-wide diversity and inclusion commitment.
The Power of Procurement
“Marketing procurement can change a lot in society, by just doing their job” – Chris Kenna
Diversity and Inclusion was on everyone’s mind in 2022. On December 7th, the Association of National Advertisers (ANA) announced that the winner of the 2022 Marketing Word of the Year is inclusion. This comes a year after the ANA Word of the Year was diversity. While these two words belong to the same family, the insight is that diversity is having a seat at the table. Whereas inclusion is having a voice.
When reviewing the reasons why ANA members voted as they did, we see comments as “it is important for the next generation”, “consumers feel good about identifying with someone like themselves in advertising”, “brands want to ensure that ads reflect the communities that brands operate in” and “without true inclusion throughout our work, we cannot continue growing as companies or professionals”. These are powerful and resonating expressions of our collective feeling that “something has to change”.
It’s been a few years since C-suites across most companies pledged their organisations’ commitment to do more in support of Diversity, Inclusion and Equality (DEI). Thousands committed to actions that support a more inclusive workplace for employees, communities and society. But very few have been able to see results in the level of diverse agency partners or even third tier partner vendors over the same timeframe. I was curious on how we, as members of the marketing procurement community can make a difference in 2023 and beyond.
When speaking with Kenna, a long-time media and creative industry player, who, in 2018, started Brand Advance Group to connect advertisers with under-served audiences, he shared his views of how marketing procurement can take on a leadership role in this mission-critical effort in 2023. I wanted to better understand how marketing procurement can really help drive this important and industry-wide commitment to diversity and inclusion. I was impressed how much he knows about how marketing procurement works and he sees them as the number one ally to execute the DEI mission.
Kenna said: “Marketing procurement doesn’t realise the huge power they have to change business relationships, not only for the company they work for but for the next generation”.
Brand Advance Group has built their business by taking centre stage and accepting speaking engagements at many of the industry thought leadership events attended by C-suite marketers. Often participants reach out to Kenna and his team and want to learn more on how they too can capitalise on the DEI efforts.
Marketing procurement has to have a leading role in the RFP development and evaluation to help drive strategic change for the company. Ask the right questions – and demand the answers you need before awarding the business.
Most large clients have an Agency-of-Record (AOR), often both for media and creative so how can marketing procurement influence a decision to move business to a small agency? It all starts with the selection process. When a client decides to pitch their business, whether it is a small portion of the total advertising budget or looking for a new AOR, the RFP document is the key area where marketing procurement can drive change. It is critical to create or edit the RFP template to ensure that the strategic vision of DEI and priority is covered in this document.
Whether the RFP is issued to current or new agency partners, they all respond to what is requested in the RFP. It is up to marketing procurement to identify, extrapolate and clarify these requirements so that the invited agency partners seek out companies that can deliver on the full request, not only partially. But if the guidelines and expectations are not outlined clearly, the agencies will deliver a “run-of the mill” response.
Marketing procurement needs to ask questions like “what percentage of our marketing spend do you plan to invest with diverse partners”? Then compare that response to your own (client) goals and targets. Do they match? Then ask “who are these partners that you will work with to execute that diverse investment”? If the AOR does not have the knowledge and network, then marketing procurement can help by utilising ANA/AIMM recourses to identify potential partners.
To Kenna, it is interesting to see that while AOR agencies often recommend the inclusion of external (or affiliate) partners for areas such as out of home, digital, programmatic and tech partners in an RFP, the AOR agencies often try to do the DEI portion of a proposal in-house. For an ecosystem that is built around specialist capabilities, this is a word of caution for marketing procurement. In the process of vetting RFP responses, marketing procurement need to question the different partner capabilities to ensure that the best partners are chosen for the specialist investments.
Another benefit by using an external DEI partner is that the actual cost of that partner’s fees, production etc. will be considered diverse spend, thus help deliver on measured minority agency partner spend – something that has been a struggle in the ad industry ever since DEI tracking became important.
Marketing procurement should partner closely with pitch consultants
Many times, clients rely on the support of pitch consultants to lead their larger pitches. While many pitch consultants are well versed in understanding the perspective of the client-side marketers in charge of the RFP, few collaborate closely with the client-side marketing procurement teams upfront. Many times, marketing procurement becomes relevant in the final stages of an RFP, when the negotiations around compensation, payment terms, audits and liability come into play.
In order to drive DEI (and other commercial and societal) change, it is key that marketing procurement is an integral part of this process and lead the RFP development for the client, along with the pitch consultant and marketing team. It is the responsibility of marketing procurement to secure that all the DEI and other goals and KPIs that the client organisation has set for themselves are clearly stipulated in the RFP and the responses.
How can we expect change to happen when we use the same MSA template year and year again?
The Master Service Agreement (MSA) sets the standards and list all contractual obligations of the agency partner and the client. This is another very important document to execute change. One of Kenna’s observations is that most of the time, clients rarely change their MSA templates, even over several years. “It’s the definition of insanity to do the same thing again and again, expecting different results” he says, half joking, half serious.
We already see marketing procurement taking a leadership role in negotiating the contract. The next level of responsibility for marketing procurement is to take ownership of the contractual template – along with the legal department. The contract has commercial, operational and legal areas that are key for the relationship to work and to be measured. While the legal sections are often standard from contract to contract and clearly defined, the commercial and operational sections should be reviewed and updated to better reflect important goals.
Some clients in industries that over-index on minority audiences, such as pharma and other brands where consumer/brand identification is important like packaged goods and beverages, including liquor have ripped apart their past contracts and started from scratch. In this process they have updated the obligations to utilise diverse partners to deliver on client scope of work.
Another area to update (and implement) is around agency reporting in all areas. Setting a schedule for quarterly reviews around the agency’s DEI agenda and quarterly deliverables is an effective way to create a regular dialogue between the agency, the client marketing team and marketing procurement. If held quarterly, when agencies and clients have their regular briefing and reporting sessions allows everyone to be on the same page. There is also time during a 12-month period to change direction if the current approach is not working.
Speaking with Kenna, he says, “inviting your agency to discuss how best to implement reporting and communications around DEI will help solidify the measures agencies take to be able to deliver on client requests in this field”.
In summary there are three key areas for marketing procurement to change DEI implementation across the entire marketing discipline:
About the Author
Christine Moore is Managing Partner at RAUS Global
About Christopher Kenna
Chris Kenna is Chairman and Founder of Brand Advance Group