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Cleaning up the media supply chain.

Contract managementEthicsMedia and entertainmentMediaGovernance and Legal ComplianceMarket VolatilitySavings RealisationBlog+-
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You type a word into a search engine, click a link to a website and a banner pops up: “Are you a robot?”

 

As frustrating as it may be to have to type out the sometimes blurred characters to prove you are indeed a living and breathing human before you can access the website, for the business running the site this helps give a more accurate measurement of whether online advertising reaches human viewers, rather than bots.

 

After all, the threat of non-human contact can lead to wasted advertising spend and poor return on investment on marketing channels; something that can put procurement on a bad footing with the marketing department.

 

And this need for programmatic buying technology has come out of just one of the issues highlighting a lack of transparency in the media and marketing supply chain.

 

In January, Procter and Gamble’s CMO Marc Pritchard called on the “crappy” media supply chain to face a clean-up. Pritchard levelled blame for wasted spend on its media supply chain for taking up too much time and money “with poor standards adoption, too many players grading their own homework, too many hidden touches, and too many holes to allow criminals to rip us off.” He went on to say that advertising spend is being wasted on a supply chain “that is murky at best and fraudulent at worst”.

 

Media agencies used by the FMCG giant have been given one year to make their supply chains more transparent or else they run the risk of losing lucrative contracts with the business.

 

So how can procurement clean up the supply chain?

 

As Pritchard admits, closely scrutinising agency contracts is essential.

 

Procurement should be making contracts with media agencies watertight, and a particular focus of this has been channelled into reviewing contracts on programmatic advertising and the capability to measure its success.

 

Procurement Leaders’ latest research found that up to 64% of advertisers plan to allocate more spend on programmatic buying and real-time bidding in the coming years in order to gain more transparency. The ability to demonstrate effective anti-fraud technology and non-human contact detection system will become all the more key to supplier selection.

 

One such suggestion, coming from Pritchard, is that all agencies should adopt Media Rating Council-accredited third-party verification to build a standardised metric into the supply chain.

 

Yet, another way to tackle this issue is to look at the relationship between marketing and procurement. The blame passed onto the supply chain and procurement’s contracts with it point to the likelihood that the two functions are not as closely aligned as they could be.

 

The best solution here is for procurement to focus on improving business alignment. By focusing the function more closely around its stakeholders and their needs, whether this is savings or top-line growth, procurement and marketing can become better aligned.

 

After all, a cleaner relationship will help feed into a cleaner supply chain and a greater chance of a win to the top or bottom line of the business. 

 

This article is a piece of independent writing by a member of Procurement Leaders’ content team.

Rachel Sharp
Posted by Rachel Sharp

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