Does Marketing Services Procurement Get A Particularly Bad Press?

Our colleagues at Spend Matters US are running their “Ask Spend Matters” feature, answering questions from readers. The latest came from our friend Tina Fegent, marketing services procurement guru, who asked:

Do other areas of procurement get as much negative press from suppliers as marketing procurement do?”

Great question, as the marketing press do seem to love their articles about procurement “getting in the way of creativity” and "reducing everything to a cost argument".  So Taras Berezowsky from Spend Matters US has put together a very good answer, drawing on conversations with Tina herself, several other experts  - and me.

My view is that this is a spend category where value is everything and “cost reduction” is virtually irrelevant – or should  be – for most of the major marketing sub-categories. So when procurement people come at it from a basic cost reduction standpoint, they are bound to run into trouble. As Taras reported:

Marketing is an extreme example of a category where cost reduction is a ‘stupid goal,’ so budget holders have resisted particularly strongly when procurement people with these types of goals get involved,” said Peter Smith, managing director of Spend Matters UK/Europe.

One other colleague at SM US was also asked for his views. As the article reports:

Frequently, procurement is entering the picture and trying to play a greater role, so naturally there’s resistance,” said Andrew Karpie, research director of services and labor procurement for Spend Matters. “If you compare that to the contingent workforce space, for example, procurement has been involved in temp labor [for a while]. Maybe not a few decades ago — but it is already institutionalized.”

But there is also just a bit of journalistic licence maybe here. Back to the SM US article:

“Well, it’s more fun to read something that says ‘Procurement Sucks!’ versus a procurement success story,” said Bill Duggan, group EVP at the Association of National Advertisers (ANA), and former VP at Grey Advertising. “So the headline grabbers are [always going to be] the war stories on procurement,” he added, noting that while AdAge seemingly ran that type of story every other month, in his view it’s “not like it used to be” these days.

There is also some good insight from Lee Garbowitz, managing director of Procurement Managed Solutions for HBR Consulting. He was Cadbury’s CPO in North American, and he talks about some of his experience there in terms of developing a more strategic partnering approach with certain key suppliers.

The discussion gets into some other categories too; I said for instance that procurement aren’t exactly the most popular people with the legal services profession either. As the article says, I did a workshop for 30 CFOs from big London law firms a few years back, and was lucky to escape with my life! E-auctions were their particular hate.

Anyway, do take a look at the US article here; it’s well worth a read, and thanks to Tina and indeed the other contributors. (And the comments below the article are pretty interesting too!)

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