Does Marketing Procurement Deserve a Bloody Break? Our Q&A with Tina Fegent

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In our series Ask Spend Matters, we recently answered this question:

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

We had the chance to chat with our question asker, Tina Fegent, who lives near Oxford, England, via Skype as we kicked off our reporting process. Here are select excerpts from that initial conversation. (Read the full piece to see where it all went.)

So we wanted to learn more about you and what’s behind this question. What is your background exactly?

I was one of the first to do marketing procurement globally 26 years ago; it’s amazing to think I’ve been around that long! But I was a procurement person buying services, and I thought, what’s this funny area of marketing that no one’s really looking at? Then I started to get involved in it. I’ve worked for three different clients: Celnet, now owned by [the Spanish telecom giant] Telefonica, GSK and another U.K. phone company, Orange.

Then I worked on the supply side, for two advertising agencies as a commercial director. Eleven years ago I set-up my own consulting firm to try and help agencies understand marketing procurement. But that didn’t pay my mortgage, so now I work on behalf of practitioner clients, the equivalent of the Targets of the U.K. I also head up the marketing procurement group at CIPS, and do the speaker circuit, as well.

What prompted you to ask your question?

There’s been lot of bad press in the U.S. the last 18 months, on the agency/supplier front. Two big things: the Association of National Advertisers found out that these media agencies, owned by holding companies such as WPP and Omnicom, are basically getting backhanders at the group level (so, getting volume rebates), and not telling clients they’re getting the rebates. It’s based on the clients’ money, and it could be affecting their strategy. So if they’ve done deal with ABC Network to commit to spend $10 billion, and they get 10% of that back in cash or added value, that often isn’t working its way down to a client like Target.

And the second thing, before Christmas the U.S. Department of Justice launched an investigation because ad agencies don’t tell clients [that they’re directing production to their in-house teams]. So you think, well there may be nothing wrong about it, but it’s all about being transparent.

Yet time and time again, the trade press slags off procurement. Two weeks ago there was a cartoon about procurement buying soybeans, and it’s like, what?! Then in an article in a trade press outlet in the U.K., More About Advertising, about the U.S. army account, the comment was, “We know procurement aren’t the sharpest knives in the box.” You don’t see marketing procurement going around saying, ‘Oh here’s a cartoon about agencies being fraudulent,’ because we’re more respectful, and we don’t do that...we don’t go around gloating that agencies are under investigation by the U.S. DOJ, but all we get back is negativity. It annoys me, and my [sub-]question is really, “If i was buying glass, or cars, would the trade bodies for glass suppliers or car manufacturers write in their trade press almost on a monthly basis how [terrible] procurement is?”

Just give us a bloody break! We all know that procurement is not perfect, and sometimes we don’t help ourselves by not having the knowledge we should have, and saying [for example], “let’s use our IT RFP for buying digital services.” It’s like, really? I’m the first to put my hand up and say that’s a fair callout. But there’s a lot of good procurement people out there as well. Go talk to people at Coca-Cola, Wal-Mart or Disney who are trying to push the boundaries, push innovation, etc. This all just just tipped me over the edge.

Why do you want to know the answer to this?

Is the flak and negativity we get in line with the rest of the marketplace? What is different about marketing? is it because there are more pressures, and it’s more [customer/client]-service-oriented? Is it just us? That’s what I’m trying to get out of it. I don’t think we deserve it. It would be interesting to hear whether in other sectors, it’s more harmonious because of the buyer-seller relationship.

What do you think the answer is? What’s your hunch?

Agencies are ill-prepared to deal with procurement, because it’s an oversupplied market, to be fair to them. In the U.K., for example, there’s 12,500 agencies. You’re not buying cardboard, where if you want corrugated of a certain thickness, perhaps there are only five suppliers. There are so many different models within the sector, so you can have big global companies all the way down to a freelancer. There are different sourcing options, in-house, onsite, etc. All of that overlaid with the fact that it’s a service industry, so they want to say “yes” to clients, but they don’t invest the time and money to work properly and proactively [with procurement]. It’s a very navel-gazing industry.

If you look at the amount of awards for example, it’s ridiculous — just a license to print money for these award companies. If you look at the advertising industry going to Cannes, the yachts are $165,000 a week to hire. Publicis has said they’re pulling out of Cannes next year because it costs them $20 million! Ed Sheeran sang and made half a million pounds for five songs. You wouldn’t be doing that in the sugar or the cardboard or glass industry. So it is tough for them, and I do think some procurement teams take advantage of it, but if they spend less time patting themselves on the back, move forward and be positive about procurement, I’m sure that would help?

Why do you think the answer to this question matters?

The only reason you’d care is if you’re working in the sector, and actually you’re just getting demotivated by the constant sniping. But marketing procurement is a brilliant area, it’s so exciting, it changes everyday because of things like digital. I love watching the TV ads, or the press ads, and for me, it’s probably one of the most innovative and ever-changing areas, along with IT. And making sure for the kids coming into procurement to know that marketing is a great area they can work in. For me, it’s for the good of the industry.

How would knowing the answer change anything for you specifically?

It would give me more power. When I’m confronted with these people that slag us off all the time, I can say “it’s not just us” if that’s the case; or if it is, “look, you need to sort this out, with your trade body or whatever,” because it’s the only sector that’s got issues with how the supply market accepts our role.

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