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By Leah Montebello
David Bygrave, Associate Director, Consulting at Deloitte New Zealand, discusses his passion for shifting the perception of marketing procurement.
Project vs Retainer: The best of both world’s
Nonetheless, some brands are opting for a hybrid model, where there is a shift to project based remuneration, but also with an underpinning of retained talent, which is supporting in the background.
David Bygrave started his career in Customer Experience and Marketing at Lion, the FMCG business located in New Zealand and Australia.
Working in ‘below the line marketing’, his role was set up within an internal agency to support the marketing team to take trade promotions into the retail environment. Part of this involved sourcing print, premiums, and merchandise from suppliers throughout New Zealand and internationally throughout Asia. This gave Bygrave a breadth of experience, from product design to sourcing and negotiation.
He later became the Strategic Category Manager in the Lion Group Procurement team, looking after Indirect categories for Australia and New Zealand, from both a strategic and commercial perspective. This gave him an even wider remit of work, which included the full gambit of media, creative design and digital.
Later moving to the Volkswagen Group Australia, he headed up the Australian Group Procurement Function, to drive functional change across the businesses of Volkswagen Group Australia, Audi Australia and Volkswagen Financial Services Australia by means of major procurement transformation. This set the scene for Bygrave’s current role as Associate Director, Consulting at Deloitte New Zealand, which he started back in July 2021.
On making the shift, Bygrave says, “For me, the opportunity to join Deloitte really spoke to my personal and professional drivers. The nature of the work that we are involved in on a daily basis, means that you are given the opportunity to be involved in a great diversity of projects & across a variety of industries”.
Working within the Operations Transformation Team, Bygrave’s role hinges on partnering with external clients to understand, identify and act upon significant opportunities within their businesses. This can range across a broad spectrum of advisory and implementation work from organisational transformation, strategy, through to procurement and supply chain projects. He explains, “We take a pragmatic approach to supporting clients by converting insights into initiatives and initiatives into action to accelerate their future readiness and growth objectives”.
Marketing meets marketing procurement
Describing the relationship between marketing and marketing procurement as a “mixed bag”, Bygrave acknowledges the stigma that often surrounds procurement.
“To be honest, it’s one of those things in the past where marketing procurement was really perceived as the grim reaper. They were seen as taking dollars off the table and cutting marketing budgets”, he emphasises.
As an advocate for change, he wants to shift this conversation away from purely dollars and commercials and demonstrate that procurement can support in other meaningful ways. He is therefore particularly complimentary of the WFA’s work with Project Spring.
Equally, he acknowledges that “marketing is not your traditional procurement category, so you need to be passionate about it, show an interest in it and want to continually learn”. This is where some procurement leads go wrong in his view, and is a reason why he is so grateful for his own experience of sitting both sides of the fence, as a marketer and procurement head.
This is something he really demonstrated while at Volkswagen Australia as the Head of Group Procurement. A crucial part of his role was working out where the brands could work closer together and collaborate.
In this case, procurement had to respect not only the DNA of each individual brand within the group, but also the need to build trust with the brands, understanding the essence and what each marketing team wanted to achieve.
“We had a small team, but a big focus for us was around business partnering. It was for us to understand what each brand wanted to achieve, what the CMOs were striving for and ultimately leaving our egos at the door. Some procurement professionals see themselves as the sole decision makers, so they will bring their own baggage to the party. Instead, we had to be an enabling function”, says Bygrave.
This reframes the role of the procurer as someone who has an understanding of all stakeholder needs, especially marketing, and can help objectives be achieved in a smooth and effective way.
The rise of project based work
Bygrave notes a rise in project based work in recent years, and believes this has been driven by the diversification of the marketing ecosystem, the fragmentation of agency partners into smaller specialist agencies, and the increased competition for discretionary budget internally.
On the latter point, he sees that certain organisations no longer want as much of their discretionary budget to be committed upfront and want to have the ability to make strategic decisions of how and when they activate in the market.
However, Bygrave warns that if companies want to continue to move towards project based work and away from retainers, they need to ensure a level of maturity within their marketing department. “You need an enhanced capability to write effective briefs, a skill set to hold partners to account and you need improved planning and discipline. This is because you don’t have the safety net to ring up your agency at 5.00pm on a Friday night to say that you need something by Monday”, he explains. As such, it shouldn’t be a light decision and brands really need to make sure the business is set up to cater for this.
Nonetheless, some brands are opting for a hybrid model, where there is a shift to project based remuneration, but also with an underpinning of retained talent, which is supporting in the background. As Bygrave says, “this gives companies the safety net and creative continuity of the brand so that you can scale up and scale down depending how you activate in the market”.
“Gone are the days from a marketing procurement perspective where you had your annual planning cycle, where you would put your retainers in at the start of the year, and make a couple of key investment decisions, and then walk away”, Bygrave argues.
In fact with the move to project based work and diversification of skill sets required in marketing, Bygrave believes that marketing procurement is now a lot more complex and there are a lot more decisions that need to be made quickly throughout the year.
However, what procurement will need to do is balance the level of required due diligence and process needed alongside this new agile world we live in. This will be a major challenge they must work through in the coming years.
Relationships with agencies, rate cards and clarity of communications
In his view, it is fundamental that marketing procurement builds a strong relationship with agencies.
“I think in the past marketing procurement has been a bit guilty of seagulling; they swoop in and get the chip and fly away. So they only really become involved in day to day conversations when it comes to pitch or tender times”, says Bygrave.
Looking forward, marketing procurement needs to ensure that they have a seat at the table through the whole life cycle, focusing on working with the agencies alongside the brand partners. “It can’t just be a turned on, turned off type relationship”, he states.
Part of working more harmoniously comes from working from a point of clarity. This means taking time post campaign to pause and examine what went well and what could be improved. Bygrave believes that not enough is done to nurture this culture of learning and that changes need to be made with two- way feedback loops. In building a rapport with an agency, Bygrave believes that agencies and brands can work better together as they will have the ability to have those tough conversations and actually be able to build future success from these.
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Clarity is also fundamental when it comes to rate cards, where Bygrave states, “you need to make sure you are comparing apples with apples”. He continues, “I think when you put out your RFP or tenders, you need to make sure you are getting all the information. It is around requesting the right roles, responsibility and years of experience. All too often, procurement can go off the name of the role rather than actually understanding the role and what it does in that particular agency”.
Therefore, brands should try to understand the size of the agency and make sure they are asking the right commercial questions from the offset. Yet, he is also keen to establish that “Rates are just one aspect of the wider commercial element. Brands shouldn’t lose sight of the overheads, and really understanding the multipliers – especially with a media agency, how that’s worked out and what multiplier the agency is putting on there”.
In essence, brands should not be pigeon holed by rate cards but try to build a strong enough partnership with an agency so that they can build a full picture of the commercial landscape, and if necessary, ask these difficult questions.
The nuances of markets and industries
In terms of how the Australasian marketing procurement space differs, Bygrave says, “I don’t think the market is that unique. The Australian market is definitely more mature in this space, and New Zealand is maturing”.
He attributes Australian advancement, compared to that of New Zealand, to the fact that they have larger advertisers with bigger media budgets, but says they are still behind the USA and European markets when it comes to marketing procurement.
“Marketing procurement in our region often isn’t a pure role and often it sits within an indirect or a corporate services portfolio. As a result it potentially doesn’t get the level of attention and focus that I know people would love to give it”, says Bygrave.
Despite this, he says that both markets “punch above their weight in terms of our agencies, as well as some amazing talent we have on the creative and client side”. This means that with the virtual world, In reference to impact of COVID and remote delivery, Bygrave is intrigued to see how they will adopt a “hybrid model” to have a mix of both local talent, as well as “best of breed” global talent, which can help grow business and expertise.
Aside from geographies, Bygrave recognises the nuances across different industries over the course of his career. From an automotive perspective, he sees Supplier Relationship Management (SRM) as key. “They place a really high importance on long-term strategic partnerships and high levels of co-innovation and integration”, he says. This was something that he saw first-hand at Volkswagen.
Spending a short time in telecoms, he describes it as traditionally a “very asset heavy business” and like automotive, it is an industry that is going through an unprecedented level of change with the diversification of services and products offered. This has led to a lot more procurement expertise coming through and an increased need for agility. The same goes for FMCG, which is fast-paced, and seeped in innovation.
Ultimately, he sees agility as the common thread that runs through all sectors, and encompasses the big push for increased digital and technology acumen within marketing procurement saying that “I think it is clear that tech is the key enabler of the future and you need a depth of knowledge to support your stakeholders in an ever evolving landscape”.
With Deloitte’s significant global network and expertise, Bygrave is confident that he can have an impact in the New Zealand and Australian market.
Working with brands across the region, he says growth is about putting the right building blocks in place with clients to address the immediate challenges they are facing, looking at the opportunities to drive efficiency and ultimately unlock innovation.
He concludes, “I think my background in procurement and my passion for it means I definitely see an opportunity for us to support in the evolution of the marketing procurement value proposition. Partnering our clients to reduce friction in this space, and ultimately drive superior collective business outcomes with their agency partners.”
The Masters in Procurement insight series is published in partnership with RightSpend
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