Marketing Communications Procurement
May 1, 2005
Best practices in marketing communications procurement have definite parallels with best practices in what has been referred to as "General Procurement." The standards that cut across all areas revolve around early involvement, use of minimum sources, teamwork, continuous improvement and lowest total cost of ownership.
The best practices in "Value for Dollar Procurement" include the following:
- Be an objective voice of reason to ensure fairness, assess chemistry, and act as authorizing body.
- Analyze reasonableness of agency cost components. Ensure that total compensation is within client budget.
- Assist in demonstrating the value-add to management.
- Engage in stewardship: monitor the relationship, proactively manage changes, and review competitive accounts.
- Promote ongoing dialogue, ranging from disciplined scope of work, to defined deliverables, to prompt notification of changes, and performance evaluation feedback.
- Process Owners should ensure good inputs, enable smooth approvals, and expect great work. They need to guarantee that buy-in from stakeholders is communicated to agencies.
- Be Ambassadors of ethical behavior and builders of trust. Limit full disclosure of information and keep open the opportunity for verification or independent audit.
- Integrators should communicate how client financials and processes impact the relationship between procurement and marketers and understand how agency financials and processes affect delivery.
- Partake in positive and constructive management and treatment of all parties.
Demand fairness and equity - "QUID PRO QUO."
On the other hand, some practices that are commonly used in "General Procurement" become worst practices in "Value for Dollar Procurement." When the value of creativity, the intellectual property, the overall relationship, and the talent brought to bear by marketing communications supplier-partners are not truly considered, the end result can become some of the worst practices listed below:
- Cost is the only or main driver
- Being uneducated in particular services' spend category
- Inconsistency with or failure to be linked to internal customer budgets, expectations and strategic objectives
- Biased and unfair sourcing and selection process. Incomplete or inadequate RFI / RFP / RFQs
- One-way contractual terms (i.e. indemnifications, non-disclosure, termination, etc.)
- Unwillingness to sign multi-year or "evergreen" service purchase agreements
- Applying direct material procurement processes to marketing communications service agencies. Commoditizing subjective spend categories with inappropriate processes such as reverse auctions.
- Requesting unnecessary information or demanding total financial transparency (individual salary data)
- Expecting agencies to provide "something for nothing" or operate without a profit
- Trying to tell an agency how to run its business
- Treating valued supplier-partners like vendors
- Unethical and unprofessional behavior
Myth vs. Reality
An ANA member has provided the following six examples of procurement Myths vs. Reality as a way to obtain acceptance from key internal marketing communications stakeholders:
Myth #1 - Procurement can't help me; I'm the expert.
Reality - You're the marketing expert, but we can still help.
Myth #2 - Procurement will make me use an agency I don't want.
Reality - This will not happen if your desired agency provides the best value
Myth #3 - My agencies don't want to deal with Procurement.
Reality - Agencies prefer to work with fair and objective people.
Myth #4 - Procurement will slow the process down.
Reality - In the long run, you'll save time and money.
Myth #5 - Procurement will cut my budget.
Reality - We won't, but finance might.
Myth #6 - Procurement can't judge the creative.
Reality - OK, this one might be true, but we can help 'value' it.
This last myth warrants some additional clarification. Although it truly is NOT procurement or strategic sourcing's job to evaluate the creative, they can certainly streamline the overall creative process for better value of their stakeholders' marketing communications investment. A classic example is the print production process. Designing "Cadillac" collateral when a client's budget is much more limited is a flagrant display of inefficiency.
"Marketing Communications Procurement." J. Francisco Escobar. New York: ANA 2005.