Don’t Dread Procurement in 2010
The following post is in response to the AdAge article titled, “Planning Your Next Move in Ad Land: The Challenges and Pitfalls Ahead for the Industry 2010.”
The most successful agencies in the next decade will not be averse to procurement executives. They will neither think “dreaded procurement,” nor dread the questions posed by procurement. They are, at their essence, questions about value and differentiation. Is the agency service valuable? Is it different from the shop next door? If the answers are yes, there is little to dread. If no, then they have only themselves to blame.
Procurement is getting smarter the more they get involved. At the moment, many of their executives don’t understand our industry. That is changing rapidly. Even if they dial down the pressure (which is not likely) the rules governing agency revenues and profits will never change.
Create business value, in a way that is different from your competition. If you do, the field is yours . . .
http://www.jonesandbonevac.com/media.php
As a former Procurement exec and now consultant, I agree with you. Certainly, Procurement has much to learn about the creative fields (and, I’m sorry to say, business in general in some cases); it is only fairly recently at many companies that Procurement has become involved in the sourcing of marketing spend. That said, good Procurement departments run an ethical process that involves Marketing. Indeed, Marketing,not Procurement, should be making the decisions on agency selection. The same is true for HR spend or IT spend or logistics spend; the decision-maker should be the functional area that owns the budget.
Procurement, in my opinion, is there to make sure the process is fair for all participants, to help Marketing reach a selection decision based on robust criteria, ensure that the contract protects their employer, and ensure that both sides live up to their obligations. Over time, Procurement can also help alleviate strains in the relationship and help improve agency profitability.
In short, a good Procurement group can be beneficial for the agency as well as for the client.