Procurement: Necessary But Not Necessarily Evil

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There is one advertising industry term that sends a shiver down the collective spines of agency new business and pitch teams alike: procurement.

Many of us have witnessed the typical procurement horror stories firsthand. We’ve nervously entered a pitch room only to be deflated by the sight of the previous agency’s presentation printed out on the table, or had to haggle on unrealistic payment terms that don’t seem to grasp the financial realities of a client services business.

Procurement may be necessary – but it doesn’t have to be evil.  In fact, procurement can actually be a good thing for agencies—when done right. Right now the industry is in the midst of a massive improvement in the procurement process, thanks to forward-thinking brands that are increasingly hiring for a new role: directors of agency relationships.

This new director of agency relationships role helps marketing find and maintain healthy agency relationships. Half -focused on getting great agencies on the roster and half-focused on being a client that great agencies want to work with, these professionals are there to counsel, not constrain. And while investing resource in this role is a big investment for brands, there is no doubt it pays off many-fold in helping them identify the agency most capable of moving their business forward.

Having participated in pitches led by a director of agency relationships, I can attest to the fact that the process under their watch is more transparent, informed, and ultimately fruitful in terms of the long-term health in the client/agency relationship.

The first major improvement: most directors of agency relationships have worked in agencies themselves. This means the person overseeing the pitch process has an innately better understanding of how agencies work  — they know that hiring an agency is a lot different than, say, sourcing a new point-of-sale system.

Pitches led by a director of agency relationships also create much better RFPs. The RFPs produced by traditional procurement are frequently difficult for agencies in three ways. First, they lack education about marketing and therefore create confusion and the need for many rounds of follow-up questions. Second, the information shared about the brand is often too shallow for agencies to produce a truly thoughtful and strategic response. Last, the turnaround timeline is too short when stacked against the hectic schedule of the average adverting agency. By contrast, when agencies are given thorough, informed RFPs with a reasonable timeline– the kind created by someone who’s been in our seats – agencies comes up with better ideas that can be actionable and impactful on day one of the relationship.

Here’s an example of how efficient and effective a procurement process led by a head of agency relationships pro can be. My team and I recently participated in such a pitch in the hospitality category. The pitch was closed and included three agencies in Atlanta. To kick off, the brand team presented the brief, live and in-depth, with all three competing agencies in the same room. The benefit of this was that the agencies in the room were able to get information as if we were participating in an actual client briefing.  We were able to ask smart follow-ups that demonstrated our thinking. A six-week media and creative sprint followed, and each agency was allowed one round of follow-up questions. These six weeks allowed us to really dig in and allocate the proper time for strategizing. After six weeks, all three agencies presented their proposal on the same day, in the same room, and with the same format. As an agency, we felt confident in our understanding of the unique challenges facing this brand and that the ideas we came up with were solid. The client told us they got higher quality responses across the board and felt more confident that the winning agency would be able to drive business results.

As modern marketing organizations embrace agency partnership professionals, they are paving a better way for agencies to pitch new business and making procurement horror stories a relic of the past. Even better, they are creating longer, more productive client and agency relationships– and that’s a win-win for all.

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