What Advertising Gets Wrong About Procurement
Here is our love letter to procurement. Well, actually it's an article, but have a read and you'll get the drift. Some in the agency world need to reset the conversation and give them a big old hug.
(4-minute read with a mug of builders and a digestive)
The profession likes to cast procurement as something of a bogeyman, but another way is possible, argues The Liberty Guild’s Jon Williams.
I spent 20 years running creative departments, watching the slow inexorable rise of procurement (this is not a bad thing by the way). At that point, stereotypically, I was kept at arm’s length, and at a distance they were always cast as some sort of Mephistophelean figure with whom you had to cut a deal for your soul.
They were the ones who, shrouded in anonymity, sucked the joy out of the creative process for a few dollars less. Every ‘no’ that an idea encountered in its journey from a marker pad to reality could be traced back to them. And every pitch that was won creatively then saw the commercial teams retire to some airless backroom and thrash out the real deal and break the winning ideas on a wheel of hourly rates, retainers and discounts.
But here’s the thing. When I started The Liberty Guild, as part of the development of the MVP we did a lot of research. A hell of a lot. We interviewed Creative, Strategy, Marketing, Production … and Procurement folks to find out what they really wanted from a new model ad agency. What they weren’t getting from their current partners. And the procurement crew, far from having us cut some Faustian pact, were charming, engaging, business savvy, and not looking to slash budget. They are just looking for value. And that’s very different.
They know that great creativity drives great revenue. By and large, they’re trying to modernise the system. They’re the ones trying to move everything forward. In fact, it’s the agency systems that pine for the good old days. I guess this is where the Mephistophelean rep comes from.
By and large we’ve found the procurement community to be massively collaborative and forward-thinking. With a purview wider than just marketing, they are champions of disruptive change. They understand that we are in a time of flux, systemic change to supplier relationships, business models, distribution, go-to-market strategy, media landscape, supply chain & logistics, and ultimately the consumer’s behaviour and mindset, without whose patronage we would all be out of a job.
And yet. The agency model is still the same as it ever was, and it doesn’t drive value. Instead, it’s long and labour intensive and there are many, many people layered onto any given man-hour. It’s actually better for revenue and margin for more people to take longer to do the work. In fact this means it ends up being the diametric opposite of ‘value’. And obviously, most agency people won’t or can’t rebuild the bus in the fast lane so they just scapegoat procurement and move on.
I was recently at ProcureCon and the generalised opinion could be summed up as: ‘Yes, maybe every year we ask for more for less, but that is because our businesses are under massive pressure and the world is changing. It’s disappointing that agencies have not evolved their model to reflect this as we know all too well how much marketing is a crucial investment in the success of a brand.’
And because, in essence, everyone on both sides wholeheartedly believes that this investment in creativity is crucial, this isn’t a burned bridge. There are ways it can be rebuilt.
On both sides there needs to be a move towards greater trust and a push towards treating each other as equals. But before trust has to come transparency. This can be done in a number of ways.
Accelerate the move away from transactional KPIs and create joint ownership. Funny how being jointly incentivised on something brings people together. Funny how a shared agenda stops nasty surprises.
Build a joint culture or team spirit around the brand. If possible, work in the same office and meet IRL. If not, you’ve got a whole array of digital communications tools to use now.
Bring everyone into the creative process. Think about a creative council including procurement, marketers and partner agencies. We spend a long time getting to know procurement as the MSA [Marketing Services Agreement] is designed, it always seems odd to me that they disappear once you start the work. Surely it makes more sense to keep it tight.
Procurement can also look at how to be better for their agency. When in crisis mode, be open and transparent in the decision-making process, it’s no revelation that this builds trust. Transparency of budget is a double-edged sword, sharing it is so incredibly important, but agencies have to stop seeing it as a target. We gave £50k back to one client last month. We didn’t need it. Knowing that will happen is when things get much more transparent.
This is a people business. It’s all about relationships. Bayer has a wonderful way of working where a specific person is there purely to build and drive relationships between the brand and the agencies it partners. This enhances those relationships and becomes proactive, not reactive. I wish it was more common.
At The Liberty Guild we live this every day. We have great relationships with procurement. Yes, we don’t use the traditional agency model, we charge for ideas, not hours. We have a streamlined delivery system that is based in technology with research at the heart of it, which helps. But in general, our focus, quality and effectiveness means we share a more progressive way of thinking. And do you know what? We haven’t had to sell our soul, just our services … and that’s where the value lies.
Photo by Ashkan Forouzani on Unsplash
