marketing procurement

marketing procurement

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In my marketing career, I’ve worked on both sides of the client-agency relationship. I’ve experienced genuine strategic partnerships where the resulting work was greater than the sum of its parts and I’ve experienced dysfunctional alliances that were transactional and even combative.

One of the biggest changes to the client-agency relationship in the last 15 years is the increasing role of marketing procurement. To keep marketing fees in check, brands started putting procurement departments in charge of the relationship. Many consumer packaged goods companies are entering a new cost-cutting wave — most famously with the “zero-based budgeting” trend driven by 3G Capital when it merged Kraft Foods and Heinz in 2015.

Marketing procurement as a discipline is still finding its footing. In an ANA survey, only 47% of clients and only 10% of agencies said that procurement added value to client-agency relationship. In late 2015, PepsiCo scrapped its marketing procurement department altogether, shifting the function back to brand teams.

But, two-thirds of ANA members said that marketing procurement was here to stay.

At its best, marketing procurement brings specialized experience to create strategic value beyond price. At its worst, marketing procurement is a wedge that can treat strategic partnerships like commodities. There can be a focus on the lowest price above all else, a lack of understanding of marketing, and quality too often takes a back seat. Agencies respond by over-promising and understaffing, assigning B-teams and C-teams to projects.

In the long run, treating creative services like a commodity will only lead to commodity work.

Here are a few related cartoons I’ve drawn over the years:

“The Agency Bid” May 2009

“Agency Pitch” July 2012

“Client-Agency Relationships” April 2015

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