This post is by David Angell, TrinityP3 General Manager and Head of Media. David has extensive commercial and media experience gained through a fifteen year career in media agencies, which he uses to help drive optimal results for TrinityP3 clients.
The procurement creep
Why marketers and procurement experts should embrace more often – and why their agencies should encourage them to.
When I think of the term ‘procurement creep’ in marketing, this is what comes to mind.
In agency-land, I hated procurement teams, as did many of my colleagues. There, I’ve said it. We would lose business that a marketer wanted us to have, because procurement would get involved late in the piece and run a dagger-shaped calculator through the agreement, signing instead to the cheap alternative.
It’s nothing personal…
We didn’t hate the individuals personally, you understand. And mostly, they probably felt the same. We just hated the general, penny squeezing, soul-sapping, process-led procurement-ness of procurement and everything it stood for, in relation to agency contracts.
We hated them because they didn’t understand marketing, yet presumed to dictate contractual terms.
The past (hopefully) is dying
Ah, the past. There was one experience I had, many years ago, where, having been grilled for an hour by a procurement lead about our contract and why we couldn’t operate on 1% commission. As I got up to leave, I was asked the question, ‘so what is it exactly that a media agency does?’
True story. And yet we didn’t address the root cause of the problem. It’s not that procurement people wilfully misunderstand (well, not always). It is the too-common occurrence of marketing and procurement, for whatever reason, refusing to talk to each other properly.
Marketing people used to moan to me about their own procurement teams all the time. As an agency person, I never recommended that a marketing person bury the hatchet with their procurement team. I was too busy being ‘on the side of the client’.
Are things really improving?
Let’s leave the high-handed rhetoric for a second and consider the reality. More recently, things seem to be changing, albeit slowly. I’m meeting more procurement people who are more willing to learn about the intricacies of marketing supplier contracts.
I’m seeing more procurement people with marketing specialism or experience being brought in to deal specifically with the marketing function.
But the cliché of the procurement person as ‘widget buyer’ still exists. Lots of agency folk and marketers still complain about ‘procurement creep’ and the fickle nature of procurement people.
My boss recently wrote an article about a real life, recent encounter with one such individual.
So here we go. I think, I really think, that procurement should be more involved in marketing, not less.
Embrace the steamroller? Surely not?
Not quite embrace the steamroller, no. More like – get rid of the bloody steamroller and work differently.
Consider the following. Many agency contracts are atrocious. Don’t get me wrong, there are also lots of good ones. But many of them are hopelessly outdated, in the wrong format, at odds with various corporate governance rules that would make them consistent with contracts in other parts of the organisation.
Many fail to properly protect either the agency or the marketer. Some contracts are even lost – literally disappeared, at the bottom of a filing cabinet, never to be found again, leaving the agency and marketer completely exposed, legally speaking, to any issue.
Contracts are sometimes signed by different parts of a marketing team on a project by project basis, leading to duplication of agency services and unwieldy rosters.
We’re serious – aren’t we?
As an industry, there’s a lot of general bitching about marketing’s place in an organisation, for marketing to be taken more seriously as a central component of an organisation’s outlook and strategy, as a growth contributor rather than a cost-centre, as more than just the colouring-in department.
But how can marketing (or, for that matter, the agencies they work with) expect to be taken seriously when, in areas like this, they refuse to play by the rules adhered to in the rest of their own business?
So yes, marketers, you need to properly engage with your procurement teams before the steamroller of procurement creep hits you.
Agencies, you need to encourage collaboration – get on the front foot in renewing a contract and ensure that it is compliant with the organisation, not just the marketing team.
Otherwise, the steamroller will hit and it will be too late to properly address things.
But, of course, it’s a two way street. Please, procurement folk, get involved at the start, not the end.
Accept the fact that the value equation between agency and marketer can be complex
That ROI can be delivered in many forms.
That the marketing landscape is changing beyond recognition and that an agency contract, like any other, should deliver mutually beneficial terms.
That pitching for an agency is not the same as securing an order of factory machinery.
And listen to the marketers (and sometimes, dare I say it, the agency folk and the consultants) who know about these things.
Procurement, stop the steamroller. Marketers, stop shouting ‘No’. Agencies, embrace the need for greater contractual governance from your clients. Sit down and work together, rather than being forced to. It will make for better agency relationships, better decisions, better integration of marketing into the organisation, and better protection should things go wrong.
To find our how TrinityP3 Marketing Management Consultants can help you further with this, click here.