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Procurement:
The good, the bad and the ugly
I
always thought procurement
was a term that got tossed
around in large supply chain
management systems. And as far as I
knew, it meant sourcing the best possible
price on commodities.
If you used that word, you were talking
about negotiating the lowest price per
unit on stuff like lumber, grain, nails or –
if you’re the army – bullets.
But what role does procurement
play in the world of marketing and
advertising? A better question to ask is,
what role should it play?
Naturally, I can see it having a place
in the area of media buying. But in the
domain of planning or media strategy, it
has absolutely no place at all. In the same
way that solid creative development is
considered an art, planning and strategy
are art forms too. These invaluable
services should never be commoditized.
What price can you put on a great idea
or a great strategy? They don’t come in
packages of a dozen.
Unlike manufacturers who produce
goods for retailers, the agency business
doesn’t keep piles of inventory on
shelves. Nor would the client want it to.
Sure the better agencies have deeper
piles of talent waiting to be challenged.
But unlike a warehouse illed with
identical widgets waiting to be sold for
the lowest price, everything an agency’s
strategists and creative teams produce
is customized
for each client
after receiving a
thorough brief.
I can fully
understand and
respect the need
for procurement
in certain cases,
like government
FRANK PALMER
is chairman and CEO of
DDB Canada.
RFPs. And I realize
that’s a reality
that’s here to
stay. But like the title of the famous Clint
Eastwood movie, The Good, the Bad and
the Ugly, procurement needs to know its
place. Otherwise, instead of being good,
things can get very bad.
When is procurement a good thing?
When it is carried out with a complete
understanding of the roles that need
to be played and the rules that need
to be followed, and when proper steps
are taken to ensure success at every
checkpoint from beginning to end.
Often this doesn’t happen.
I WOULD LIKE TO THINK
THAT WHEN THE DECISION
IS MADE TO HIRE AN
AGENCY, IT’S BECAUSE
IT HAS THE BEST TALENT,
STRATEGY, SYSTEMS AND
UNDERSTANDING OF THE
CHALLENGE, AND NOT
BECAUSE THEY WERE
$10 PER HOUR LESS (OR
MORE) EXPENSIVE
And when procurement doesn’t
follow the rules, that’s when things tend
to turn ugly.
Good procurement management
fully understands the criteria for a
successful evaluation process. And those
involved also respect that it’s of the
utmost importance to maintain a good
relationship between client and agency
as things proceed. Participants can (and
possibly should) play “good cop/bad cop,”
but it’s never okay to be the ugly one.
Right now procurement in the ad
industry is getting a bad rap. The word
on the street is it’s getting ugly because
often the players have no regard for the
rules of the game, and little respect for
the other team.
When procurement is directed at nails,
BY FRANK PALMER
ammunition or soap, I can understand the
drive to get the best price. In fact, in some
cases, I think people should get a bonus for
their effort. But when it comes to hiring an
ad agency, is pushing for the best price a
bargain? Or is it really a handicap?
I would like to think that when the
decision is made to hire an agency, it’s
because it’s the right it. It’s chosen
because it has the best talent, strategy,
systems and understanding of the
challenge, and not because they were $10
per hour less (or more) expensive.
Why?
Because great client/agency chemistry,
trust and overall relationship is priceless.
When agencies work cheap, clients
get what they pay for. But when the
relationship is formed on the right
foundation, a client will be richly
rewarded, project after project, in
incredibly valuable ways that can’t be
measured like boxes of soap or shipments
of lumber.
If it has a place in this business at all,
the advertising industry and the people it
serves should demand that procurement
be carried out exclusively by experts
and team members who understand and
specialize in client/agency relationships.
Otherwise, let’s just use a few of those
cheaply-procured bullets and shoot
ourselves, because buying machinery
doesn’t require the same skill-set as
buying creative talent.
And if you treat them both as one and
the same, it’s not just the agencies that
will lose out. The situation ain’t pretty for
the clients, either.
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