Is public sector procurement killing marketing services agencies?
Questions about the public sector procurement strategy adopted across the UK to involve both the UK and the Scottish Government, a partner of the Scottish Minister’s Marketing Services Framework, are once again being asked after several agencies appealed the final decisions, citing their focus on price as a major issue harming providers.
The UK Government announced on the 22 March its final ‘streamlined’ creative solutions framework, claiming that it would save around £3 million a year across PR communications, direct and digital marketing services.
While it could be argued that in these times of austerity, it’s quite right that the public sector be paying more attention to what it spends when it comes to issuing public messages, however the marketing services community itself has said that it is being harmed by the introduction of procurement into the appointment process in recent years.
The IPA has been highlighting the issues of its members, and while it admits that not all of its member agencies were unhappy with the final outcome of the UK framework process, the process itself had concerned all involved, the organisation told The Drum, describing it as ‘unnecessarily complex and time consuming’.
“By excluding vital elements like effectiveness and past success has led, we believe, to an over-emphasis on price,” explained Geoffrey Russell, company secretary and director for Media Affairs for the IPA.
Agencies with a great deal of respect from their peers such as Karmarama, Dare, Mother London, The Leith Agency and Newhaven have each lodged appeals against their omissions across differing frameworks - with many surprised not to see such experienced names left off the final lists. The reason for this, it has been claimed by many involved, was largely down to their pricing and the focus placed on cost against quality.
“Choosing agencies to develop effective communication campaigns is not like buying aircraft carriers or paperclips – and to adopt the same approach is unhelpful to everyone,” continued Russell.
“No agency, whether it has been successful or not, would want to be appointed because it was the cheapest – our members are concerned with delivering value, but divorcing decisions from experience and past work, inevitably means that price becomes a key differentiator - whatever Government officials might say.”
Several agencies involved in the tendering processes have complained to The Drum about the weighting of the process, and indeed, the Scottish Minister’s Marketing Services Framework is also having questions asked of the figures involved, with sources stating that the figures have been reassessed since the appeals were made, due to ‘anomalies’ being found. However, further ‘anomalies’ have also been discovered within the reassessed figures also, it has been claimed, opening up The Scottish Government’s procurement department to claims of being ‘sloppy’ and not ‘transparent’ - ironically the reason why procurement was introduced through EU legislation in the first place.
Another criticism of the procedure that has been pointed out on several occasions since the introduction of procurement into the framework appointment process, is the lack of consistency once agencies are named on the framework, with mini-tenders including creative pitching then leading to campaign and account appointments.
Said one industry insider involved in the Scottish tender process: “It’s obvious looking at the figures that a number of agencies have dropped their trousers to get on the roster by dropping their prices to a rate that they can’t service. If price is so important then all appointments should be made by the procurement department.”
The Scottish Government’s procurement team was approached for a response to such claims, but only offered the following response: "The tender exercise for the Marketing Services Framework Agreements have not yet been concluded.”
The challenges against each framework seem to have made little difference to the final outcome - although The Scottish framework could yet have a few more twists and turns should rumours of legal action holding up the final framework emerge to be correct. This could see the whole process delayed, meaning that the previous framework would likely be extended once again in order to cover, or, at worst, see the new framework thrown out entirely should it be found to be flawed.
How important the public sector is to the creative industry varies depending on location, but temperatures are high across the board with the amount of work put into the procurement process, and the lack of clarity that seems to come back following their conclusions.
The IPA found that applications to the UK framework took each agency an average of 167 hours each in order to complete the paperwork, which at an average £300 per hour fee saw agencies spend over £50,000 just to get involved. A total of 231 agencies put in bids for the Government Procurement Services roster, the Cabinet Office has admitted to the IPA, meaning that over £11.5 million in total was spent in hours by the industry in order to apply for the initial tender.
Asked whether the IPA believed there had to be change within the process, Russell confirmed this. “There must be a better way of running the selection process for advertising – and we would hope to find a constructive way of working with the various Government authorities to this end.”
The Scottish Marketing Services Framework is expected, following a delay of over two weeks from its initial announcement date, to be revealed on Wednesday (should no further delays be necessary).