Ultimately, his solution sounds simple: “Marketing needs to learn more about business; finance needs to take risks they can’t always calculate.”
While Target is still working out the kinks of its marketing-procurement relationship, Coca-Cola has put its wheels in motion from the other side of the spectrum.
Christina Ruggiero, chief procurement officer at Coca-Cola, noticed her department was trying to push its own strategy onto other departments, rather than influencing overall business strategy and aligning everyone around the same goals.
“We’re going to the table as shareholders. We’re trying to grow the brands,” she said on stage Tuesday.
To align her team on a company-wide vision, Ruggiero moved the marketing procurement team from the procurement department into marketing.
With new guidance, Coca-Cola’s procurement team manages budgets with a new grasp on marketing that understands scope and value, rather than just cutting costs, and can broaden its definition of value to go beyond savings.
“We taught supply-chain people softer skills like marketing and agency compliance,” she said. “We changed how we look at agencies, how we work together and how we influence business partners and the profit and loss statement.”
The restructure allowed Coca-Cola to reinvest $100,000 back into its brands last year, Ruggiero said.
“We’re thinking of creative ways to reinvest back, not just cutting costs,” she said. “In marketing and advertising, these involve initiatives like investing in fewer productions with the same or more media investments, importing and reusing creative with minor adaptation, bundling production and bringing on single partners to execute multiple jobs.”
When marketing and procurement get along, it’s also easier for the agency to do its job, since it can produce work that’s better aligned to client needs and work within a pay-per-performance model that the brand knows how to measure.
“If you are an agency and you don’t intimately understand what your client does and how they make money, that’s where you have to start,” Jones said.