ProcureCon Marketing Day 2 — Agency-Side on Improving Procurement Relationships

We are back with coverage of last week's ProcureCon Marketing day 2 – it’s a full house again, and interested to hear such a large proportion of delegates from the continent – Swiss, French, Dutch, German – clearly this event is very popular across Europe (and beyond – a few American voices here too).

A couple of sessions this morning are worth reporting on, but first a quick nod to a) the caterers, lovely fresh and appetising food, and really good smoothies – everyone was saying so, and b) the organisers, who were constantly on the go, making sure you knew where to go, etc. So, just to say, it’s a very well organised event if you have never been – and the views from the hotel are pretty good too (see picture).

First off we had the Agency Panel Session which took the form of preset questions and questions from the floor -- the event, it is worth noting, had a high standard of speakers and panelists and the standard was consistent throughout the day. This session looked at how agencies are structuring their business to respond to client needs in an increasingly complex marketplace.

The members of the panel were:

Mark Howley, CEO, Zenith Optimedia, Neil Christie, MD, Wieden & Kennedy, Tom Lewis, Finance Director, IPA, Anthony Groves, Global Commercial Director, Dentsu Aegis and moderated by
Nick Manning
, Chief Strategy Officer, ebiquity.

The main theme of the discussion was how agencies are evolving and whether the change needed is a significant one. One panelist acknowledged that it is in fact the workload that is driving change, since that is what is growing, and professional buyers have to guarantee a continuous flow of supply. That could be true of any industry, we suppose.

Marketing’s job, it was said, is to create value, deliver it and capture it, it is not a cost-controlling centre. Marketing and procurement have a common interest, they both have to show back-end results, and that they can guarantee outcomes and deliver on them, but that doesn’t mean marketing should be creating for creativity sake. It’s important that agencies help clients to identify the right data – to make it useful, and to act on it. Marketing has a lot to prove, it’s not seen as a vital cost by the Board, if the marketing director is given £x million to spend, what return does the CEO see? It’s not like manufacturing, there’s no direct line of sight, the agency has to be able to help marketing show that this is more of an investment, not a tangible ROI.

There was a lot of talk about the usual considerations for agencies, like putting the client at the heart of everything, the Uberisation example came up again – but more interesting was the following question from the chair to the panelists:

“Tina Fegent said earlier that relationships between marketing and agencies is a delicate one – if you could ask procurement people to do one thing what would it be?”

The first answer was a bit controversial and was greeted with “ooohs” from the audience. Mark said he would ask them to help change marketing! Help us get rid of duplication and inefficiencies. It’s hard to do that from the outside (he has a point). Marketing need to be asking themselves where they are wasting agency time, you need someone in the agency working with you on your side, the problem is that too much is left on our side of the table. Procurement needs to be our quarterback in the organisation, looking at all processes and reassessing them.

Neil said he was pleasantly surprised to see so few people agree with the statement yesterday that cost cutting is the number-one KPI that procurement is measured on (and cost avoidance is number two!). Last year the same question yielded more ‘yeses.’ Stop making your KPIs about cost savings – he said.

Tom (note -- IPA is now a chartered body) said he would like to see improvement in how we talk to each other, to achieve better business results with evidence-based effectiveness.

And Anthony said – just keep coming to this event! (that would please the organisers). We are operating in a fast-moving and changing environment, keep ahead and learn new techniques. There are huge resources out there to help with pitches for example, there’s a good way and a bad way, be clearer on what you want to achieve right from the start – that will save a lot of time in the long run – it comes down to Clarity. (Editor's note -- and of course, read Spend Matters.)

There was an interesting point made along the way about ‘juniorisation.’ When you have budget constraints, agencies tend to put more junior people on the business – but if that happens across the industry, you don’t get the necessary calibre of people. There’s a much broader choice of roles agency-side nowadays, especially for talent coming in from the digital sector, but in a traditionally low-paid industry, we have to remunerate them better. Everyone wants good people working on their business.

And a final point was made about good old transparency and trust. The former is widely bandied about, but you have to decide what it means for you. Trust between agencies, marketing, procurement, is essential, but it has to be built – and you can build it through transparency. So if you don’t trust your agency – find another one.

Tomorrow we’ll talk about the second panel session.

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