Buying Marketing Services – Gerry Preece is outstanding at ProcureCon

One of the stand-out sessions at the recent ProcureCon Marketing London conference came from Gerry Preece, an ex Proctor & Gamble marketing procurement leader, who is now a consultant and author of "Buying Less for Less" , a short book about buying marketing services (which I have just ordered).

The beauty of his presentation was in the clarity of the message, coming from someone who worked for what was  perhaps the greatest marketing firm in the world over the last 50 years. There was little of the "on the one hand.. but on the other" approach that we often hear and see in presentations. Whilst not coming across as arrogant in the slightest, Preece just emanated a sense of someone who thoroughly understands his topic, has thought deeply about it, and has a very clear view of what works and what doesn't.

He started by saying that the only target for procurement in this sector is to help increase and drive marketing ROI (return on investment) . It is nothing to do with cost savings.

He then went on to explain why marketing is different from a procurement perspective. (I did challenge him in the Q&A that certain other high value service categories share a lot of these characteristics, and he did agree). But here - in summary form - are his ten reasons why marketing procurement is different.

• Expense versus investment. You don't have to buy marketing (unlike directs) - we do it to drive return.

• Specifications and quality – in many spend areas, something either meets spec or it doesn't. Marketing isn't like that.

• Impact of buyer decisions – usually, the worst I can do in direct spend areas is waste the money I've spent. In Marketing, the wrong decisions can cost a fortune.

• Supplier differentiation is less clear in term of marketing services providers than most spend categories.

• Lack of any ‘supplier qualifications’ – there is no standard testing or certification of suppliers.

• Linked to that, there are few barriers to entry - anyone can set up instantly as an "agency"!

• Budgetary managements – for direct items, budgets are set, contracts can be agreed with some certainty. Marketing budgets can be cut or increased during the year and frequently are.

• Marketplace economics are complex – supply and demand factors are not always clear.

• Independence versus interdependence. Different elements of direct spend are rarely interrelated - the tyre buyer in Auto does not have to understand what the steel buyer is up to. But in marketing, buying creative affects digital, that affects PR ... everything is connected.

• It isn’t easy to measure results – e.g. tracking savings in marketing drives wrong behaviour.

Another fascinating section of his session covered what is required of good marketing procurement people. To succeed, people need to be “fluid, dynamic and capable of handling ambiguity”. He laid out four implications in terms of the people angle.

1. We must have people who have the right mindset - who think about maximising investment, not minimising expense. Too often people's behaviours don't live up to those words.

2. We must have the right metrics in place, if we get the right people but measure them on cost savings it won't work. Although it is hard to get the right metrics, we have to try and measure marketing ROI and incremental profit / value.

3. People need the right skills. Good sourcing skills are a good start but not enough. We need people who are natural collaborators, with low egos and good communication skills, who can connect, and build relationships.

4. We need the right assignments. This is not an area to parachute people in for three weeks. Several years are needed to build trust, and consistency. There is a significant knowledge base to be developed that goes beyond the narrow procurement area.

There was more from this excellent presentation, but I suggest you order his book. His final point was a good one too - he doesn't like the term "marketing procurement". He much prefers "marketing investment management" - and we agree.

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