The Drum Network commercial group: The promise of procurement
The reality of the procurement process in 2020 is that, too often, agencies and procurement teams are working with incomplete information. From the procurement teams’ point of view the agency landscape is changing so rapidly that it’s practically impossible to keep up to speed with agency capabilities and focuses.
Meanwhile, agencies are struggling to understand the needs of a procurement team, whether that’s because of a tenuous at best communication chain, or because they’re not privy to the true measures of success the procurement team is looking out for.
At the first Commercial Group UK meeting of the year, a select group of Drum Network members discussed the realities of managing the relationship with procurement teams in 2020, as well as addressing the industry-wide changes required to improve the environment as a whole.
Based on a session at last year’s Pitch Perfect event, in which procurement experts shared their own experience, the Network members were keen to note that the onus of ensuring a good relationship doesn’t rest solely with procurement.
Paul Vallois, managing director at Nimbletank, said: “I think it needs to be a professional relationship. You don't spend as much time with procurement people as with clients so invariably you develop a stronger working relationship with the end client.” He notes that, as with every aspect of agency life, there are good and bad players. He specifically cited a few teams who have pushed back against the client and brand teams if they felt the process was unfair to the agency.
Meanwhile, TVC group managing director Becky McKinlay believes the responsibility is firmly with agencies, given the respective expertise of either side: “I think that quite often procurement are putting a roster together, and there's no guarantee of getting work off that roster quite often.
“I can understand [why procurement people might be defensive] in a room full of agency people who've been fairly hostile towards them over the years. Lots of agencies - and I'd include mine in this - aren't very good at dealing with procurement. They are professional buyers, and we're not professional sellers. We think we are but we're absolutely not.”
Educating the market
Holly Yates, head of partnerships at Cubo Group, suggests that there is an education aspect to the process that should be more widely acknowledged: “It depends on how big the business is. You might not be dealing with someone who's specialised in buying marketing services exclusively. They might have to go across every category. In this scenario, ISBA have done a really good job... they do monthly procurement education session. It's like lunch and learning - they bring in a different person each time.”
The group also noted that, just as there are teams who will go above and beyond on behalf of agencies, there are those that will take the time to really educate themselves on the breadth and depth of expertise offered by those organisations.
Hannah Kimuyu, director of paid media at Greenlight Digital, believes that sourcing agents are often the best at that: “Obviously they are not internal procurement, they are businesses that are set-up specifically to work with agencies and clients themselves, to make those introductions. One of the things we've found is that they do go that step further with educating themselves.”
She also notes that they are typically much better about sharing the commercial framework, and taking the time pressure off the process.
Chunking and challenges
However, the group also noted that marketing managers are trying to find ways of avoiding procurement. Procurement for certain businesses don't get involved unless there's a budget threshold, effectively, and the practice appears to be on the rise.
Too often, the perception is that the procurement process is mandatory, even when the client has a preconceived notion of its preferred partner. Consequently, agencies’ input can be wasted. Emma Hunt, commercial operations manager at Croud: “The procurement process was just something that had to happen, and then a couple of months after it's all done and dusted you find out... it was all a massive waste of time.”
As a result, the group believes that the opacity of procurement presents problems – both in terms of relationships with clients and investment in pitches. Will Hawkins, managing director of Start Design, said: “I think we need to call it out - to say to people ‘we all know who the serial offenders are’. The trouble is there's no incentive not to do it. Agencies are reluctant to call it out because they think it'll damage their standing within the industry, but why should it?”
Vallois believes that periodically the industry attempts to get to grips with the issue, but that efforts inevitably peter out. He said: “It’s cyclical. One thing we tried to do was standardise the RFI process, so as an agency you could just dust it off, change a bunch of numbers and that was it. There was a conversation about pay pitches. Nothing ever really changed. Nothing ever really took hold.”
There is, then, a disincentive for individual agencies to attempt to create any change around the often-opaque procurement practice. It will take the industry banding together and working in concert with procurement teams in order to ensure the relationship between both sides is equitable and amicable.