As the relationship between Procurement and Marketing groups continues to evolve, decoupling becomes a more frequent discussion point amongst the two parties. Sourcing professionals are typically tasked with identifying cost savings opportunities and Marketers are expected to always be aware of the latest trends in their field in order to stay ahead or keep up with competition. If executed properly, decoupling is a strategy that can help both groups meet their objectives. Last week, The Strategic Sourceror introduced the topic of decoupling in the first installment of this blog series, explaining why it's something worth talking about (and debating). Today's post will cover the history of decoupling in advertising and how it currently applies to an advertiser.

First, a quick overview of what was covered in the first post of this series: What is decoupling? Decoupling is when an advertiser chooses to separate the production (and/or media) components of a campaign from the creative or strategic portion. Rather than utilize one agency for all marketing activities from soup-to-nuts, advertisers may choose to decouple their production activities and engage with specialized shops and studios to develop these elements, which can range from standard print jobs to digital assets like software applications.

Decoupling has been around for longer than many may realize - originating over 20 years ago in Europe when advertisers began to take a closer look at their advertising budgets. Advertisers began to compare production costs across agencies to identify savings opportunities by segmenting out these services to a lower-cost alternative. Decoupling started with the movement of print production services from advertising agencies to specialized print shops. When print was a primary advertising tactic, printers who could produce high quality print work were sought after. Print production agencies are stand-alone agencies that emerged to fill this demand for high quality print services but at a lower cost than advertising agencies. While the advertising agency develops the creative concepts, the print production agency is completely dedicated to the production of these concepts. As broadcast media gained popularity as an advertising medium, media agencies were formed to execute broadcast media concepts. Media agencies gained their strength in the market because of the relationships media buyers were able to establish with media outlets, which could be leveraged to achieve savings for clients.

Now, one of the most popular services to decouple is digital work. The digital landscape is constantly changing as new technologies come to market and yesterday's technologies become outdated. With each new update or technological advancement, advertisers rely on their agency to react quickly and develop the skills and expertise needed to handle these new technologies and eventually incorporate them into a campaign. Your one-stop-shop advertising agency may not have the ability to dedicate resources to stay on top of the latest digital trends. Digital shops are often better positioned to adapt as they are leaner and more proactive. As a result, we have seen a shift in which advertisers are engaging their advertising agency to develop the overall strategy and concepts behind a digital campaign, and then move the actual production of the concept to a digital agency with the strongest technical expertise.

In general, decoupling is frequently born from the demand for technical expertise in a particular area of marketing which may not be cost-effective for larger advertising agencies to acquire. Today, the latest trends in decoupling are focused on digital services, which mainly include website and software application development and digital media. Many advertisers and sourcing professionals also debate about having digital media stand alone as a service offering considering its complexities. Depending on your target marketing and their presence in the digital space, it may be highly beneficial to have three agencies collaborate to execute a successful digital marketing campaign - one focused on creative and strategy, a second focused on development and build, and a third focused on media. To some, this may seem excessive, but to others, it may be necessary to ensure product/brand relevance and growth.

Regardless of the strategy employed by an advertiser in building their agency network, Procurement can serve as a decision support and help identify the agencies and production houses best suited to meet and advertiser's needs. Procurement is also known for its analytical mindset which can help marketers understand the cost benefit tied to decoupling.

Stay tuned for our next post where we'll discuss further the cost benefits of decoupling and other advantages it can deliver as a sourcing strategy. And we'll also explore the other side of the coin and call out some disadvantages. There are many considerations when deciding whether or not to decouple and we'll walk you through the most import ones. Also still to come, an overview of scenarios where it makes the most sense to decouple.
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Megan Connell

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