A Procurement View of Agencies and the Buy/Sell Dynamics of Marketing Services

Hot TopicWe’ve featured various articles with a procurement slant over the years from The Drum website, aimed at the marketing community. It’s a really good website, with the occasional article about the intersection of procurement and marketing, but certainly should be on the regular reading list for anyone involved in that spend category. Indeed, it has some material that is just generally interesting – I enjoyed (and was educated by) this article on recent tech announcements, for instance.

But back to procurement – their latest coverage last month was an edited version (available here)  of an illuminating speech given at the RAR Awards by Andrew Lowdon, global procurement lead for Associated British Foods. Lowdon talks a lot of sense as he tries to explain to an audience on the agency side how procurement works and how procurement executives see them as suppliers.

My single objective is to work with my colleagues in marketing to ensure the right agency is appointed. So let me try and debunk a few myths about procurement and share a few thoughts on what controls an agency can bring to the party.

Procurement’s role, put simply, is to buy products and services in the most efficient and effective way for our organisation, to achieve the best ROI. It should also be about project management, challenging the status quo, bringing commercial insight and delivering the right agencies to the pitch. I’ve been doing this for 15 years and still don’t think it’s easy, or that I know it all yet.

He suggests that agencies should understand the level of experience and competence of the procurement people they are dealing with. Good advice, but I guess the problem comes if the answer is “they know nothing.” What does the poor supplier do then? Lowdon doesn’t really answer that, but then I’m not sure I know the answer either!

He is very good however when it comes to explaining the balance between cost and other factors, and impressing on the audience the need for clarity and openness on costs. He has some horror stories too about the procurement process to show that this is not always the easiest supply base to deal with! Not just the example of a firm supplying a pdf of an Excel spreadsheet rather than the spreadsheet he had asked for, but also this:

Business Requirements frame the entire procurement process and usually lead into an RFI. Though I know RFIs can be painful to complete, they can also help you decide if you want to participate and get you onto the shortlist. I’ve read too many agency responses to RFIs saying: “We do not provide this information”. This leaves a question mark and can reduce your chances.

Not just “reduce you chances” I would have thought - you’d be out of the running if I was the CPO. Anyway, it is all very sensible advice both for the agency side, and indeed for buyers looking at the way they engage with agencies and other marketing services providers. Well done to Lowdon and also compliments for going into the lions’s den to give his speech - a roomful of suppliers for whom procurement is often seen as the enemy. Here is how he finishes.

Procurement isn’t all bad and they often will listen and enter into sensible dialogue with an agency, assuming the agency wishes to enter into a sensible conversation with them. Strange what happens when two parties treat each other with mutual respect and trust. Listen carefully to what procurement request. Don’t give your value away, and value what you do.

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