Procurement in advertising. Friend or foe?
In this guest post Will Feutrill argues agencies deserve to get hammered by procurement if they are not persuading clients they are adding value.
As procurement continue to….um….influence the relationships agencies have with their clients, there is a continual question of “what value does your agency bring to the organisation”.
Now we all understand when procurement asks what value do you bring, they are of course asking, “how much can we cut off your rate card hourly rates?” And as the roundabout goes, each agency slashes, then tries to be more “efficient” with their hours and push out more and more work faster by more junior staff, with less thought and with cut and paste strategy.
The client then starts to be jaded with the results and ideas so looks to greener pastures. The new agency will then agree to terms thinking they’ll find a way to “build up” the business and the cycle continues.
Clearly procurement are screwing us all and how dare they take away our beautiful retainers?
But is it really that shocking? Companies wanting to work with the best, but not at any cost? Is it unreasonable for them to run a ruler over an industry that has always struggled to justify its expense? “50 per cent of advertising is wasted” right?
Maybe it’s as simple as looking at the motivations behind the shift and adjusting our outlook accordingly.
Are ad agency brands worth it?
We are very good as an industry beating our chests about how brands need to stop their cyclical discounting race to the bottom. And yet we’ve let our own brands be diminished to the point of agencies being so interchangeable, it’s little wonder the average client is happy to farm out to the cheapest alternative.
It’s always been about relationships, however relationships now more than ever rely on a marketing director and a senior ad guy (or gal) following each other wherever they jump. Ad agency brands are just something to chuck on the resume.
Where did it all go so wrong?
Our approach to every campaign or execution we run is a simple question – if we take our client’s brand off this and put it’s major competitor’s, does it still work. If the answer is yes, then the idea isn’t strong enough.
Think of the latest pitch you saw or were involved in. Was there actually something compelling and distinctive about the agency? Did they demonstrate how working with that brand would be different? Or was it a lot of “strategic processes” and “people first” messaging?
So how do we fix it?
Well, that’s the $64,000 question. We may well find that the horse has bolted and we are now in our own rat race fighting over the next million dollar brief at ‘the client our studio designer went to school with’s, cousin’s, friend.’ Or maybe we can do what we tell our clients to do.
Our friends in procurement have actually given us the answer!
Invest in your brand!
Stand for something unique and defend your position. Build your brand and build your relationships. Demonstrate the difference your agency brings to the table. And be prepared to justify why your way of working is more aligned with the way your client wants to work.
Agency/client relationships do go deeper than a rate card…but only if you’re bringing more to it.
- Will Feutrill is Head of Melbourne at 31ST:SECOND
Completely agree with this, but being from the agency side I can tell you i deal with many procurement people who are not about finding or assessing value. Ifall we had to do was to prove our value or show a point of difference, the view of the procurment process woudl not be so sullen.
Instead, we are faced with regular exercises looking to “extract greater value” which is code for fee cut. In many cases they are not even pretending with fancy words anymore – they just say “we need a fee cut of x or we will drop you from the roster”.
There need to be more procurement agencies who assess true value, not just run a tender process to collate data on a spreadsheet to compare costs
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Procurement have had a powerful seat at this table for the past 15 years, probably for much longer, so their role in the mix isn’t new and neither are their expectations. I’d suggest that the single biggest challenge here for any agency is being able to identify, measure and articulate that “our involvement has grown your business by xx%”. Like it or not, if we can’t do that, then we’re excess baggage anyway. And when we can then whilst procurement will rightly have a seat at the table but any dissent on their part in the boardroom will be barely audible. At the heart of all this is though is, what is our role? That varies from client to client but ultimately it has to be to help them grow their business and if not then we shouldn’t be there in the first place.
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Completely agree. Well said. It’s up to the agency to sell our brand just as much as a solution.
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I agree with JB, procurement undermines any ‘value’ in the client/agency relationship by reducing it to a numbers conversation. Very few procurement people understand the goals of the marketing and brand teams. Add to that onerous payment terms and you have agencies underwriting marketing services for some very large organisations that show no loyalty to their agencies. I don’t see there is any value in the agency’s brand as procurement can’t put a number on it.
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The concept of agency brand is laughable.
A brand needs consistency.
Yet we change and swap key players in the management team as frequently as Playboy changes Playmates.
Procurement is an easy blame.
As communication experts, we have failed to clearly explain our value in a language procurement requires.
Instead we create a culture of self congratulations over irrelevant awards which fall over the deaf ears of procurement.
And the boo-boo violins of self pity when asked to justify our contribution.
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