Public Procurement of Marketing

Hot Topic

We are delighted to feature this post submitted by one of our regular readers who works in the public sector, on our hot topic for this month: Buying Marketing Services.

I recently moved categories in the public sector, and was given the marketing category (among others). I was excited by this challenge, and before starting I threw myself into my research – there is a smorgasbord of white papers, articles and research to be found on the internet detailing the challenges and best practices of marketing procurement (“doomed, doomed,” I hear you cry).

However, as I started to throw myself into my new category and tried to apply what I had learned, I came a cropper. Private sector best practice in this field is very difficult to apply to the public sector.

The first problem is the prevalence of tendering, where a potential supplier responds to an advert with a written tender, usually via an online eTender platform. Quite different from the marketing industry with its importance placed on pitching and personal relationships. (I have memories of one internal stakeholder who rather amazingly said he would prefer not to work with any marketing agency that responded to an invitation to tender simply on the basis that they should be above doing that!)

This in itself is not an insurmountable problem, especially if the marketing campaign is valued below the OJEU threshold. Problems can arise where some risk-averse lawyer advises that marketing spend should be aggregated through a single OJEU framework though!

The second problem is much more fundamental. The simple fact is that marketing as we understand the word does not actually exist in the public sector, despite the presence of marketing people.

These organisations do not depend on revenues from sales activity. They have a set budget – usually paid for by taxpayers, and no amount of marketing activity is going to change this (the obvious exception these days being universities). The prevailing best practice states that you obtain value for money by spending on marketing where this has the biggest return on your investment, which is indicated by increased sales and therefore revenue. If you have no sales revenue, then how do you measure value for money?

The main function of these ‘marketing’ teams is communication with their customers, to simply tell people what’s going on. I’m sure you’ve all received a magazine from you’re local council through your letter box at some point. Is it really that important? Does a local council really have to spend thousands of pounds on brand management? A point that seems lost on many public marketing bods, seemingly intent on emulating their private sector counterparts by producing many weird and wonderful communication pieces that will usually cause a procurement headache. Value for money is a distant consideration, it seems. If there is a budget, then it will be spent, with little success in monitoring its impact.

Spend on marketing may not be as high as in the private sector, but it can be substantial enough to require procurement involvement. So where does this leave us? Do we try and support the marketing teams with their strategy, despite the fact that there is little or no benefit for the procurement team? Or do we regress to the bad old days and aggregate the spend through as few agencies as possible to get a reduction in their day rates?

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