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.
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
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.
Completely agree. Well said. It’s up to the agency to sell our brand just as much as a solution.
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.
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.