Procurement Is The Rodney Dangerfield Of Marketing

There are various opinions of Procurement, which started emerging as a strategic marketing tool 7 or 8 years ago. Agencies blame all of their ills on Procurement, whether fair or not. Even their counterparts in the client's marketing department don't hold Procurement in high regard. Procurement, to quote Rodney Dangerfield, "Gets no respect".

At the root of the problem are dollar and cents. During the two years of the recent recession, Ad Age found that the 100 Leading Advertisers maintained their margins. Agencies, on the other hame, lost almost 2 margin points, from 12.6% to 10.7%. Much of it was a result of clients renegotiating compensation. Yet, focusing solely on fee renegotiation is a mistake. Agency fee is only a small portion of working and non-working budgets -- media, production, and research.

Further, improving the brief process, reducing duplication, and ensuring the senior management, from both sides, gets involved in creative development, can help save 20-25%.

The bottom line is this: despite the wishes of agencies, Procurement is not going away. We might as well make sure that it adds value, not just cut fees. 

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