CANNES — In tough times when belts are being tightened, how can marketing agencies fight for corporate dollars to spend?
In this fireside chat at Cannes Lions, two industry group leaders debated how internal structures shape marketing procurement:
- Marla Kaplowitz, President & CEO, 4A’s
- Bill Duggan, Group EVP, ANA
Look beyond cost
“The questions are not productive if it’s focusing on just cost,” Kaplowitz says. “The biggest challenge is when there is always a look-back and a comparison, the work changes year to year, it is not helpful to constantly be looking at FTE or cost-plus.
“That’s a fairly outdated model, in my view. I think the creative agencies are moving off that, the media agencies are still very much there, some still even charge commission for various media types.
“The opportunity is to move beyond that and to start looking forward.”
A sour relationship
What could marketing procurement do to improve its relationship with marketing and/or agencies? Read the full "Procurement 2022: The Good, the Bad, and the Ugly" here: https://t.co/CmxP6fIcFX pic.twitter.com/MjlFqAPS5h
— The ANA (@ANAmarketers) July 28, 2022
Duggan’s ANA just released a report, Procurement 2022: The Good, the Bad, and the Ugly, revealing that the relationship between marketing procurement and agencies continues to be fraught with difficulties:
- There is a wide divergence in how healthy the procurement and the agency side rate their relationship.
- Procurement people want to optimize their cost, but agencies believe procurement wants to minimize it.
- In both groups, almost everyone said the other side was not at all knowledgeable about the value of its work.
That is a picture of mistrust.
The ANA has produced 10 recommendations to improve the relationship.
Assuming each agency racked up a cost-to-pitch of, say, £5k–£10k. Dead easily done.
By calling a 16-way pitch, client’s sapped £80k–£160k of time/ideas/value out of the creative sector. Scandalous.
Worse still, 16 agencies let ‘em.https://t.co/HEgHEDRGu6
— Adrian Bentley (@AdrianBentley) May 25, 2019
Kaplowitz and Duggan say agencies’ costs involved in pitching are excessive and should be reduced.
Despite the effort and expense, many agencies get “ghosted” by prospects.
Duggan says he knows a solution.
“The road to a better relationship between procurement and agencies goes through marketing (departments),” he says. “The goals of procurement and marketing need to be aligned.”
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