Tina's World

A positive story to end the year on

2010-12-17T07:51:00.000Z

Research published this week by the World Federation of Advertisers (WFA) has found that experienced marketing buyers concentrate on building third-party relationships and educating the buying team about the category. The study found that it is contrary to advertising agencies’ criticism that procurement teams are solely focusing on lower fees and reduced media costs.

Here is a bit more detail on it from the SM website - supply management.

A good and spot on bit of research to end the year on as this is exactly what the more experienced procurement marketing professionals have been practicing for many years.

Have a good Christmas to those of you that read this and here's to a positive and productive 2011 in this wonderful world of marketing procurement that we work in.

Christmas Tree Purchasing

2010-12-10T13:22:00.000Z

Years ago when I worked for SmithKline Beecham at SB House on the Bath Road in Brentford, I was always asked that as I worked in Purchasing, did I buy the fantastic display of trees that adorned the building every year (now a block of apartments I believe). And no for the record I didn't.

But this story on the Supply Management blog today made me laugh. It is about the purchase of the Treasury's Christmas tree and £875 vs £40 discussion. Had many of those discussions lately re buying or comparing like for like ?! - here is the link to the article - treasury-christmas-tree

A talk and a new initiative

2010-12-01T10:03:00.000Z

I attended the Kingston Smith W1 seminar last night where I was presenting my view on 'Is the price right?'. The other presenters were Esther and Mandy from Kingston Smith W1 - superb as ever, plus Mark Lund with his perspective of the COI and Payment by Results, and Paul Graham from Anomaly on the way that they work with clients in terms of their fees. Despite feeling under the weather, I really enjoyed the event and found the other presentations really interesting. Worth attending next year if you are interested in the financial study that Kingston Smith W1 produce every year.

Just seen this about the new initiative that the IPA ans ISBA are working on - in looking at the process of ‘reforming’ pitching to save time and money. It is good to see them working together but wonder if they will make contact with CIPS (the Purchasing body) to see if they want a procurement perspective. Click here for more details on the IPA website - The-need-for-a-new-pitch-process

The future of public sector

2010-11-29T12:16:00.000Z

I thought that it was interesting last week that John Collington has unveiled a plan that will see a quarter cut from £13 billion-a-year spending in nine areas. John is the head of procurement for the Cabinet Office’s Efficiency and Reform Group (ERG), and at a conference he revealed nine spend categories that will be transformed over nine months.

The one that is of interest to us is advertising and media which will be tackled by next September 2011. But as it is not clear the future of the COI, I wonder how they are thinking that they are going to tackle it. Will they look at bringing in consultants that know this area as to date I have seen little procurement experience in public sector organisations of knowledge of the marketing category. Be interesting to watch this space on this one.

There is no such thing as a free lunch

2010-11-28T09:40:00.000Z

I have read this week about the Bribery Act that comes into force next year and the impact that it could have on the media industry in particular. The Act is there to stop corruption and market distortion, and if you are found to be breaching it, there are unlimited fines for the companies found guilty, as well as a possible ten years for individuals who are found to be offering inducements.

The article in Campaign feels that there is a lot of corporate hospitality and entertaining that goes on the media world, and that is an essential part of the job as it enables the media buyer or advertiser to understand the different commercial mediums that are in place.

Ummm not so sure of that. Obviously as Procurement we are always aware of these types of situations, and in my view everything should be reciprocal so I make sure that I pay my fair share (not that I have that many lunches I have to say). But I don't really agree that you need to experience corporate hospitality and entertaining to understand what you are buying. We Buyers have to understand the market that we are operating in and there are many valuable sources of information and I agree that you cannot beat a face to face, but this can be at the agencies or clients office or over a coffee.

It must be that time of the year again

2010-11-20T14:49:00.000Z

Is it me or does it seem that once a year the old debate of Payment by results come out ? It has been around as a form of incentivised payment for many years. The reason that it is in the news this time is that the COI is looking at it. Short answer....about time too.

I like PBR and agree with the comment from David Wethey, that a few clients agree a PBR and then don't have the money to pay it. A PBR should reward against the pre set agree targets and should be paid in full.

To be the question is not PBR good or bad but rather should and could PBR be applied to other sectors more than just advertising ? I have recently tried to look at it for a DM and a Digital contract and neither agencies could get their head round it. So let's see if the value of a good PBR can extend to other disciplines.

Kingston Smith Annual Survey

2010-11-15T21:58:00.002Z

This is always a good read as it reports back on the top agencies by sector in terms of their financial performance. This year they are celebrating their 20 years and have a great panel of speakers - Mark Lund, Paul Graham from Anomaly, Esther Carder from Kingston Smith and.....me.

If you are interested in buying the survey (and you get 2 free tickets for the presentation), further details can be find via the following link- kingstonsmith survey_2010.

I may see you there (and no heckling from the front row please!).

ANA Conference next year

2010-11-12T08:20:00.000Z

I blogged a few months ago about a conference that the ANA held in Florida earlier this year on Financial Management. They have sent me a form if you want to register for the 2011 event. Have a look at the details on their website - ANA Conference. The agenda looked really good this year so I am sure that 2011 will be just as good, and it is in Arizona this time - beats a London hotel to me any day!.

Send me an email if you want the form to register.

Some great ideas from across the pond

2010-11-06T08:24:00.000Z

Mentoring - Education and Branding and PR of Marketing Procurement - great food for thought in this Ad Age article - adage.com

A great new ad

2010-11-06T07:34:00.000Z

I know that this is a procurement blog but occasionally we like a bit of creative. Here is a outstanding ad that Darren Keff at JWT has done for the Special Olympics - well worth a look (and yes I am biased as he is my cousin - sorry about the plug!) - Special Olympics - Encourage Omar - http://www.encourageomar.co.uk/.

Some great blogs

2010-10-29T16:31:00.000+01:00

....for a reminder of the great creative industry that we work in, here are two blogs that are worth reading -

http://www.ben-kay.com/

http://notvoodoo.blogspot.com/

OFT Outdoor advertising market study

2010-10-25T21:57:00.000+01:00

The OFT has launched a study into the UK outdoor advertising market. The scope of the study will include an assessment of whether the payment structure and competition at the various levels of the supply chain is ensuring that advertisers get value for money from outdoor advertising. Further information about the market study can be found at: http://www.oft.gov.uk/OFTwork/markets-work/current/outdoor-advertising/.

They are looking to speak to advertisers that either have deals direct with poster contractors or buy through their media agency. If anyone would like to contribute to the study, just drop me a line and I can forward you the contact details and the questions that they are looking to ask advertisers.

It's interesting and it is free

2010-10-22T11:39:00.000+01:00

For those of you that are interested in all things digital - here is a debate that Haymarket are running that may be of interest (and it is free - always a bonus) - The Big Digital Debate.

The How-do & Creativebrief seminar on Wednesday in Manchester went really well (hello Iain - glad you enjoy reading this). The subject was 'Getting value from your Marketing Budget'. The three of us that spoke all gave really interesting perspectives (Marketing @ Umbro, Measurement of the spend from Robert Shaw and then me on getting Procurement involved) and I hope that the people that came along enjoyed and learnt from it as well. Perhaps they could host another one in London.

Just say no!

2010-10-17T13:46:00.000+01:00

I have been working in Korea (hence the radio silence). A very interesting culture and work environment with some interesting impending cultural and commercial impacts about to happen to the client that I worked out with . I hope that we have given them enough confidence to face the challenge.

A good Ed's Perspective in this weeks' Campaign about Agencies learning to say no. It seems (and really not surprising) that agency chiefs are getting frustrated with clients that keep asking for more and for less money, and they are starting to fight back.

I think it is fair if the agency feels that they have been treated unjustly. Be good to see if there are any high profile and reported cases in the next few months of this happening. Watch this space!

I missed out on the reporting of the Sir Philip Green report on cost savings to be made. Apparently the report was only 32 pages long - well that was a saving in itself !!

The world's favourite fan of Procurement

2010-10-03T10:44:00.000+01:00

(even though he has his own Procurement team!).

Sir Martin Sorrell, chief executive of WPP, believes that boardrooms are beginning to wake up to the value of marketing despite the pressure of procurement.

He says: “I do worry about the role and value of marketing inside companies and inside the board room but I really think that the balance of power is shifting.”

Sir Martin made reference to the Deutsche Bank study of the value of advertising and promotion by 30 companies that demonstrated, over a 15 year period, those who had invested in brands saw an average rise in sales of 30% and in unleveraged profits of 50%.

He said that advertisers wanted three things: efficiency, effectiveness and liquidity (I agree) and added “Ever since Lehman’s collapse clients and ourselves have been worried about liquidity…my view is that this is too short term.”

A talk in Manchester on Value

2010-09-28T18:49:00.000+01:00

I am talking at a really interesting event in Manchester that is being run by How-do and creativebrief. The snappy title is 'The Value Imperative - Getting the most from your Marketing Budget'. The other speakers are Robert Shaw who is Professor of Marketing Metrics at Cass Business School and has spoken before at a number of the previous CIPS Marketing Procurement Conferences (wish they would bring them back) and Stephen Corlett who is Head of Brand Communications at Umbro.

Further details can be found via this link -how-do talk

Procurement can cross the line

2010-09-26T11:34:00.000+01:00

In this week's Marketing there is an interview with Andy Wood, who is the Chief Executive of the brewers Adnams, and guess what....when he worked at Norwich Union (1990-94) he rose to the heady heights of purchasing manager. Yipee - is this a first ? A senior person responsible for marketing is trained in procurement. I would love to know what he is like to negotiate with!.

Training

2010-09-26T11:30:00.000+01:00

I have just received The Chartered Institute of Marketing's Learning and Development brochure for 2010-11. There is hardly any training around for Marketing Procurement folk (except the very good ISBA courses that is taught by real practitioners). So this brochure was quite interesting as it covers topics such as Digital Marketing, Metrics, Insights and Innovation. Sadly there is no training on procurement (for the marketeers of course). But it is worth a look if you are looking for any category specific training for your procurement teams.

Couple of useful links

2010-09-22T13:44:00.000+01:00

Earlier this year I posted a blog about a really interesting looking conference that the ANA were hosting in Miami on Advertising Financial Management. They have just posted up the details of the 2011 conference (Arizona this time) and you can register (well you can if you are based in the USA!). I think it is really worth looking at once the agenda is published. Here is the link - ANA Conference. Let me know if you manage to register.

The other website that I came across is this 'Procurement Tolbox' that the OECD have got. This Toolbox supports governments to implement the OECD Principles for Enhancing Integrity in Public Procurement. As it says these Principles apply to the entire procurement cycle: from needs assessment, to contract award and final payment. They emphasise transparency, good management, prevention of misconduct and accountability. A bit dry in places but interesting for those that work in public sector and some interesting things to read about - here is the link - OECD Toolkit.

"Invitation to special event for procurement professionals involved in advertising/marketing"

2010-09-12T19:11:00.000+01:00

I have received this invite for a talk at an agency re the way that they work with their supplier on Production. Details below. If you are interested in attending - contact the agency direct.

"Theme: Why re-coupling is the new de-coupling

Date: 16th September 2010

Time: 4.30pm – 5.30pm, followed by informal drinks

Location: 206-212 St John St. London EC1V 4JY

Speakers: Michael Moszynski, CEO LONDON Advertising and Graham Hinton, Chairman Splash

Advertising agencies have traditionally treated production costs as a way to bolster their bottom-line, leading to opaque pricing structures and a different price list for each client.

This led to ‘de-coupling’ as independent production companies offered significant savings to clients compared to what they were being charged by their agencies.

As Procurement professionals know, price is nothing without quality, and the disadvantage of this approach is the divorcing of quality control from the oversight of the creative agency.
Additionally, for clients seeking to create campaigns across markets and communication tools, there is a further challenge on how to ensure consistency and quality of how the Brand is portrayed.

In November 2008 two former Founding Partners of M&C Saatchi set up LONDON Advertising to offer a new alternative to the traditional agency model by setting up in the offices of Splash and offering its clients ‘decoupled’ prices (in fact they are the first creative agency to publish its production price list on its website www.LONDONadvertising.com) with ‘recoupled’ creative quality control.

We welcome the opportunity to share with you the how the joint Splash/ LONDON model has delivered transparent pricing, a sophisticated online campaign management system to enhance brand consistency globally and facilitated creative oversight on the final delivery.

This would be followed by a chance to have a drink and canapés so you can also meet your peers as well as our team."

IPA Paper - Future of Work study

2010-09-12T16:09:00.000+01:00

I was asked to contribute to the above paper that was released at the start of this week. It was about the IPA looking at the way that agencies engage with Generation Y and what the future ways of working could be about. The main headings of it (as summarised by Campaign) are:

The Client is King
A Faulty Business Model
Senior Suits getting back involved in client-agency relationships
The rise of opportunity networks
Redesign needed of the client/agency contract

It is a really interesting paper to read as it really does give you food for thought as to the future business models that agencies may be looking at (and very interested in this new breakaway from Fallon agency who are promising a 'new commercial model'. Should be interesting when they launch later this year).

The headline says it all !

2010-09-05T07:25:00.000+01:00

Article from Supply Management is very interesting, but not sure about the last fact about Women - I think that there are more us !

The rising profile of procurement has seen the number of UK purchasing managers more than double in a decade.  

According to the Office of National Statistics’ (ONS) Labour Force Survey  the number of people identified as “purchasing managers” has increased every year, from 24,000 in 2001 to 53,000 this year, an increase of 121 per cent.

In 2008, 39,000 purchasing managers were recorded. This figure increased by just 2,000 in 2009. This year, however, the number jumped by a further 12,000.

Between 2001 and 2003, the number of female purchasing managers in the UK was too small to record. Current figures show that 19,000 of the 53,000 purchasing managers are women.

I know how he is going to do it

2010-08-24T10:57:00.000+01:00

I just had a meeting with someone who used to work at Arcadia. The way it works there re managing the cost base is that the MD - Ian Green, signs off every order that is placed over £5000 (excluding Goods For Resale). That has created a culture where they just don't spend money.

Before the announcement of Sir Philip Green helping the Government, apparently the Head of Purchasing from Arcadia got sent to a meeting with the Chancellor - I would have loved to have been a fly on the wall for that meeting.

So the answer is that perhaps the PM will be signing off all requests for expenditure now ? - that should be interesting.

What are you doing next week?

2010-08-20T17:57:00.000+01:00

There was a piece in yesterday's Indy about the inaugural Edinburgh International Marketing Festival (EIMF) that is on next week. I am up there on Tuesday and really looking forward to hearing the different speakers.

One of my procurement friends wanted to attend but was told that it wasn't relevant and their manager would prefer them to focus on a clearer marketing procurement mix"....!?! - exactly the attitude that needs to be changed.

Here is a link to the article if you are interested in attending - independent article.

The Elephant in the room

2010-08-16T21:33:00.000+01:00

A great title and actually quite a good article about where does the person responsible for bringing procurement and marketing together now sit in the balance of cost and value. They are referring to the CFO, the Finance Department and I think it is a good (and short) article to read, just to make you think about making sure that you have a positive engagement with the respective Finance teams at the client side. Click here for the article - Elephant-in-the-room

This made me chuckle

2010-08-13T14:20:00.000+01:00

Sir Philip Green, the head of clothing retailer Arcadia Group, has been asked by prime minister David Cameron to lead an external efficiency review into government spending. He will scrutinise government spending over the past three years to identify inefficiencies and potential savings.

I would not have put the two parties together. Whilst Sir Philip is very well known for knowing every detail of his cost base, he does lead a very lavish lifestyle as the reward for doing this. So on reflection I think it is an inspired choice and I would love to know who negotiated the contract with him and what his fee is (if there are both of course!).

A classic !

2010-08-05T09:36:00.000+01:00

Leaving a client's last night, I decide to get a black cab to the train station. In getting in the cab, the MD of the agency of the client that I had just left rang me (we are about to start negotiations with them). After exchanging hellos, he mentioned that they were a Oyster card travelling agency. Well done I said - good to see an agency managing it's overheads (I still shudder about the £2k we were going to spend on flowers for a client pitch at Lowe's). Then he mentioned that he had seen me getting in a cab - oops !. Live and die by our procurement standards ?? (in my defence I was paying for it myself !).

Just made me really laugh.

Bookings now open

2010-08-04T06:36:00.000+01:00

I am running a 2nd training session for The IPM (was The ISP) on Perfect Procurement. I run it alongside Lizzie Palmer from Second Circle - who was my client when she was in charge of Global Marketing when we were at Orange, so we have a good mix of procurement and marketing insight into how to put a really productive relationship in place between agencies and clients.

We got really good feedback from the last one - so here are the details if you are interested - perfect procurement

Purchasing's eqivalent of The Apprentice

2010-08-03T15:59:00.000+01:00

Here it is - a very very detailed run through of the Battle of the Buyers task that we undertook on the hottest day of the year (well so it seemed). You can also bid for the items that we 'negotiated' for the task. Hope you enjoy it and congratulations again to the winning team. Here is the link to the article - Battle of the Buyer.

ANA Study and strong words in Campaign

2010-08-01T10:05:00.000+01:00

The ANA in the USA has just published a report which says that the majority of clients are still using the fee based remuneration system, with only a small minority (1% - very small then) looking at value based output. I would have thought the latter would be higher with the likes of P&G and Coca Cola now looking to operate in this week. Be interesting to see which clients over here start to look at value based pricing in a big way. Here is the link to the article - ANA report.

The letters page in this week's Campaign page 22 has 2 letters of interest. One from David Wethey @ Agency Assessments which leads on from the above mention of value based pricing. David feels that clients and especially procurement people have become use to paying agencies as some form of salary and that we should look at how architects and design shops are charging. True re design agencies - they tend to charge per staged delivery.

The next letter is from someone called Marcus Cauchi (if you look him up he seems to work in sales). His views on the Thomas Cook media pitch are shall we say very strong. His website seems to be written with the same strong view on life. He does make some decent points, and I understand why Campaign has published it as it is a very entertaining ! read, but I do object to the phrase 'guttersnipe procurement monkeys' when he is talking about the recent Belgian pitch where the agencies went on strike. Does he know all the facts and like the Thomas Cook pitch, it is always better to know all sides of the story before making such sweeping comments. But worth a read if you have a copy of Campaign.

Very proud

2010-07-23T18:12:00.000+01:00

A bit of family pride here. My cousin (Darren Keff) and his partner (tip top creatives at JWT in London) have won a Gold at Cannes for this superb bit of ambient creative for Polo (Mint not Car). Click here to see it - Polo Snow Stamp. And no procurement involvement from me at all (had to put that in there somewhere to make it a tiny bit relevant to this blog!) ! Have a good weekend.

IPA Report

2010-07-22T10:09:00.000+01:00

The IPA have published a report that says that ads that win awards are 11 times more effective. The report examined 213 case studies of advertising over the last eight years, including campaigns by marketers such as Cadbury, Volkswagen, Budweiser, Honda, Audi and Orange. They claim that there is a direct link between creativity and effectiveness and that this is a good argument for quality over cost. So far so good.

But in the next breath, guess what, Hamish Pringle the DG of the IPA says that by putting all the emphasis on cost and procurement, are marketers reducing their chances of creating campaigns that really work and will drive business growth in the long term?. Yes we have last week's example of the Thomas Cook signing on fee (still no proof on that by the way), but hey don't wave a broad brush at everyone else in the industry.

Apparently procurement people are paid a significant bonus linked for reducing costs. Where is the evidence of this ? Sure there may be a bonus in play for the individual or department, but targeted savings may be one of say four measures that the bonus could get paid out on (if at all).

I am disappointed by this as I don't really see any evidence of 'tough' procurement driving out cost at the expense of quality. It is our job to get and know the balance to get the best result for marketing whilst making sure that a fair commercial proposition in place. Perhaps the IPA could redo the study and see how many of their successful case studies had procurement people in. I know one of the answers as I worked at Orange when we won the IPA awards !.

The aftermath of the TC affair

2010-07-16T18:53:00.000+01:00

This week's Campaign has a number of different articles in response to the 'news' that Thomas Cook was 'asking' its pitching media agencies to pay £1m up front. I have not seen an official response from TC Procurement or Marketing but I did speak to someone who is aware of the process, and their only comment was that TC treat their agencies as suppliers - read into that what you want.

So for a guided tour on the articles:

Page 2 - Claire Beale leads with the headline 'Why it's time to say no to damaging fee term's'. This is about the fact that agencies often don't help themselves and likewise there are some clients that will take advantage of this. I agree with this totally and for once procurement isn't blamed !

Page 12 - Tim Williams of Ignition Consulting calls for a better way of charging that isn't link to hours, quoting examples of Coca-Cola (well documented in this blog). I am a great fan of the concept or licence fee - the client pays an one off lump sum for the agreed level of output with agreed parameters e.g. .usage for one year in the UK on TV. Kerry Glazer @ AAR said this week that they are seeing a few more examples of this happening.

Page 18 - Ian Darby has a good view then the TC pitch is running the danger of supporting a "murky and opaque world where agencies collect their wedge in the form of undeclared kick-backs from media owners". I wonder where TC stand with their incumbent agency on unbilled and AVB's ?

then finally on Page 22 - James Kydd ex Virgin Media says that he is sympathetic to TC's demands and that media agencies haven't help themselves so don't deserve much sympathy.

So a jam packed issue on this very thorny topic. I would really love to know the truth on this pitch. Let's see how it pans out.

Edinburgh International Marketing Festival

2010-07-13T20:53:00.000+01:00

The guys at creativebrief are launching with The Marketing Society and The Assembly the inaugural Edinburgh International Marketing Festival.

Apparently they have developed a unique series of events to demonstrate how marketing permeates and fashions a lot of what we do in our society and how this influence to and from society is ever more prescient as technology, attitude and behaviours change and advance.

This event is a Festival of Marketing , not an industry conference, and as such is appealing to marketers of course, but also to government, educators and students, the media industry and the general public. The other partners include IPA and DMA.

They have kindly offer readers of this blog a discount. There are around 100 paid seats available. More details can be found on www.eimfest.com.

If anyone is interested, just drop me line and I can forward on to make sure you get the discount.

Buzzing news today

2010-07-08T09:29:00.000+01:00

Have a look at a story on today's Brand Republic site. Apparently Thomas Cook Procurement are asking for a £1m signing on fee for their £30m media contract that is up for grabs across 4 agencies. They are asking for a significant reduction in agencies fees and at least a 10% reduction in media costs. The IPA are saying that this is very unprofessional procurement and that the agencies should pull together.

First is it true ? (MH @ TC if you read this - would you like to set the record straight?). Secondly would any other category of spend discuss with suppliers a signing on bonus ? I am sure I have heard about it before, not in marketing but in another category. Thirdly I do agree with the IPA (if this is true) that the agencies should say no if they are fundamentally disagree with the requirements of the pitch.

Any comments on this?

PR Procurement Conference

2010-07-06T20:56:00.000+01:00

The CIPR are organising a half day conference on Procurement in September. It costs £250 if you are a CIPS member or £300 if you are not. They have a mix of agencies, COI and procurement people speaking. Looks fairly interesting but I would question the price of it for a half day session in these times where money for training etc is a bit tight. But here is a link to it - CIPR Conference

Here to stay

2010-07-04T12:31:00.000+01:00

Here is an article that appeared on the Procurement Leaders website last week. The central theme of it being that Marketing Procurement is here to stay. Not a surprise for the many of us that have worked in this area for ages. The one interesting bit is that a web-spend analysis company says that with good visibility, savings of 20 to 25% can be found with Procurement's help. Here is the article - Procurement Leaders

Procurement does Cannes

2010-07-01T06:55:00.000+01:00

There was a discussion at one point with Sir Martin of WPP and Keith Weed of Unilever (Chief Marketing and Communications Officer). Below is an extract from it - I have highlighted the two sections where they mention Procurement.

"Continuing on the effects of the slowdown, Sorrell said that there’s a sense of procurement and finance function becoming more powerful than the marketing function and that’s led to decline of marketing as an entity. From a consumer goods point of view, Weed replied, there’s been no erosion in the importance of marketing as a function. “Our growth is driven by consumer demand and marketing is the key to fuel the demand.” Weed accepted that the buying side of marketing, that’s procurement, can become more professional. “But this improvement should deliver creativity and effectiveness,” he stated."

I agree with Keith Weed about marketing being central to meeting what the customer requirements are but not convinced about totally about the need to develop the professionalism of procurement. I wonder what Unilever Marketing Procurement team have to say about that ?

The B of the B's

2010-06-26T16:23:00.000+01:00

Had great fun yesterday, even though I was a tad nervous at the beginning. I had 'volunteered' to be involved in 'The Battle of the Buyers' an event that our trade magazine - Supply Management was running. Yes you guessed it - it was the Buying exercise that you see on The Apprentice with Sir Alan (superbly replicated by Dr Dick Russill yesterday).

We were split into 2 team, given £150 and had a list of items to get to pull together for a Hamper to be launched for Charity. Some of the items were a VHS video of a Tom Cruise video (we were on the phone at one point to the kind old ladies of Age Concern whilst they routed through their VHS collection); 2kg of Saffron (a well known Supermarket may still have 10 bags for us on hold) and a Kazoo (yes what is it).

But it was a great exercise in teamwork (there were 6 on each team - 2 teams); planning (the key to many a good negotiation); research; sourcing and negotiation (seeing if we can get the items for free or at a discount). Both teams had very different approaches - as the Judges said one was a Hare and the other a Tortoise.

Read the 5th August edition of Supply Management to see who won, and thank you to my contacts and friends that helped.

ANA survey

2010-06-22T20:51:00.000+01:00

Ad Age have published an article this week about a study that the ANA has conducted in the US re agencies view of Procurement. The headline being that unfortunately agencies are still sceptical about the role and the value that Procurement can play in their relationship with their client organisations. Here is a link to the article - Ad Age Survey.

What do you think ? Have perhaps the relationship in the UK market got better ? Do more than 14% of us know the marketing category ? All comments welcome.

Positive PR

2010-06-19T20:12:00.000+01:00

There is a good article published this month in the US issue of PR Week. It says that PR companies must accept the role of procurement and learn to work with them. One fantastic quote is "Perhaps procurement's growing involvement in PR is the impetus the industry needs to up its game in this area". Excellent - hope to see more of this articles this year. Here is the link to it - thanks US PR Week - US PR Week article

Top tips and another Conference..

2010-06-18T11:49:00.000+01:00

I mentioned in a recent posting a seminar that I gave for Upfront Business Development. They asked me to build on the Top Tips section that I presented. They have put it up on their website so of you want to see my view on the top tips on dealing with procurement; how to respond to a tender and how to negotiate - just click here - Upfront Seminar.

The IPA have their annual Finance Conference on the 8th July. I used to go when I was agency side and it is always really interesting and good to catch up with mainly agency folks. You can go if you are an IPA member or a guest of an IPA member. Here is the link to it - IPA Finance Conference 2010

Today's updates

2010-06-09T19:17:00.000+01:00

Iris have had to move their procurement breakfast from Thursday 17th June to Thursday 22nd July. Contact details if you are interested as per my blog entry of last week.

I think my presentation to agencies this afternoon went well. It was about how to understand procurement and how to work more effectively from both sides to order to achieve what we all want from it - great results at a fair commercial arrangement. I like presenting to agencies as a few of them tend to have had (in their view) a negative experience of dealing with procurement and by the end of the talk, hopefully I have given them some insight that can help them build up the relationship with procurement in the future.

But sorry Procurement readers it is my fault if you get cheaper biscuits from your agencies now, I have said we look at things like that !!

Media Auditing guide

2010-06-04T19:47:00.000+01:00

Bit of a blogtastic week I have had - hope that you have found all or at least some of the postings of interest.

The WFA have just published a really good guide that helps you when looking at selecting a media auditing company. I think that they are essential in any media pitch and also vital in helping the ongoing relationship of the client and the media agency. They have to be careful of the line that they tread. I have seen recently a relationship that appears too cosy with the agency and that rings alarm bells for me. But if they are well managed and have clear objectives and a reporting structure, they more than earn their fee.

You can access the document via the WFA website - click here - Media Audit paper

A talk

2010-06-03T21:42:00.000+01:00

I am running an early evening seminar next week for Upfront Business Development. It is aimed at agencies and is called ‘How to make your agency more attractive to Procurement’ (and no it won't just be a slide with a picture of money on !! that is at least on slide 15!).

Here is a link to it - Upfront Seminar. I think that numbers are getting a bit tight now but there is a waiting list if any agency folk would like to attend.

When is a bribe not a bribe?

2010-06-02T21:33:00.000+01:00

Pretty sure that the headline caught your attention !.

There is an article in this months 'The Marketer' entitled 'Marketing or bribery'.

This autumn, there is potentially a new Bribery Act expected to come into force, replacing existing bribery legislation. As the article says "what constitutes “bribery”, and how could this new legislation affect marketers and advertisers?"

It says that potentially three areas need to aware of this - Corporate Hospitality; B2B Incentives and Rebates and Volume discounts. The latter being especially applicable to media agencies. We all know what a soft market it was last year with TV deflation at around 20% in the UK, and agencies are saying that many agencies have over promised and will under deliver on the savings promised to clients. So the article says that we as clients could start to add “good faith” and “impartiality” language into contracts and agencies may want to review their current supplier commercial arrangements.
Could be interesting to watch if the Act gets passed.

Another event....

2010-06-01T08:35:00.000+01:00

This time it is a CIPS Branch event for the Thames Valley area (go on - they are worth a try). Sarah from Tickling the Trout is going to be covering the relationship triangle between marketing, procurement and agencies. I may be assisting her in a panel discussion. Here is a link to it - it is on the 17th June - CIPS Branch event

Iris Procurement Breakfast

2010-06-01T06:45:00.000+01:00

Iris are holding their 4th (free to attend) procurement breakfast on Thursday 17th June at 8.30am. The topic this time is Sustainable/Green procurement with the main speaker being Simon Brown who worked with M&S to develop their Plan A programme. It is always a really good debate and with a good turnout of procurement folk and other interested suppliers.

Contact Nicola Osmond at Iris (Relationship Marketing Manager) if you would like to attend - phone number is +44 (0) 20 7654 7343.

Are agency proft margins too high?

2010-05-30T15:41:00.000+01:00

is the headline on an article on page 19 of this week's Campaign.

It is about the ISBA Paying for Advertising report which came out this week and is always worth a read (along with the Kingston Smith report that I mentioned a few blog postings back). As the article says "The good news is that agency profit margins remain "remarkable resilient". The bad news being that advertisers seem to resent the fact".

It is a hard one to comment on as we all want to make sure that the agency is making a decent profit, on the right things and is treating the agency in an open, honest and transparent way. Still to this day there are agencies making revenue on areas such as production costs and annual insurance premiums. This often support the fact that the scope of work has increased, the resource on the account has increased but yet there has not been an conversation with the client (marketing and procurement) on making sure that the fees match the work and that everyone is happy with all the ancillary costs.

It is up to all of us to make sure that those regular conversations happen, and we aim to work in a partnership way of working.

I am working with a great client at the moment who really wants to make sure that they are getting a 'good deal' by looking at the way that they work with their main agencies first. By then looking at the marketing and admin processes, we can then look at the commercial construct of the relationship.

Agency House of the Future

2010-05-13T22:23:00.000+01:00

What a great phrase - Agency House of the Future (just needs Michael J Fox in the lead role !).

I read it in a report by Forrester Research today entitled 'The Future of Agency Relationships' . The report is about how the marketing community needs to lead its agencies to change in this ever increasing marketplace and adaptive marketing era.

The summary says the marketers should assess their agencies using 3 I's (not eyes!) - ideas; interaction and intelligence.

I think that this paper is really good and makes you think about the future. I used some of its findings today with a client and they really thought that it made them think about their model and structure of their main agencies going forward.

And on page 11 it says (in bold) - "create a productive relationship with procurement". I like this report.

A wolf in sheep's clothing

2010-05-07T16:38:00.000+01:00

There is an article headlined in this week's Marketing magazine entitled 'Procurement vs creativity. The oft-derided department can help motivate agencies'. Now you must be thinking why I have chosen the title for this blog, as I have said before about the lack of positive press about procurement and this seems to be at last a breakthrough.

The article (I have a PDF of it if you would like it) starts off well saying that procurement can help in the creative process by putting a Performance Related Fee (or bonus) in place. Sure but this is old news. I put one in place in 2001 - I have even found the original article about it - here it is !.Orange Lowe PRF. The rest of the article then really goes on about different remuneration models like the Anomaly model of sharing in intellectual property rights. There is no real other mention of procurement and some of the great added value areas that they can work with both the client and the agency on e.g. process improvements, measurement and investment in technology to drive efficiencies.

I really think it is time to move away from PRF and I totally agree with Debbie M's view in the article that a lot of people talk about exciting new fee structures but the majority of clients (not agencies) are reluctant to do it.

So , let's be creative and take some risks - happy to help and give my view if any clients or agencies are brave enough.

PR article - The buying game

2010-05-02T16:11:00.000+01:00

There is an article in this week's PR Week on Procurement and has quotes from PR agencies, Clients and Procurement. Worth a read - some interesting views in it - with learning's for all in it. Click on the link to read - PR Week article

WPP and Ad Age again

2010-04-26T19:18:00.000+01:00

There is a story on today's Brand Republic re WPP targeting clients technology budgets - intriguing. Is this on repro, asset management, work flow?. Be good to understand more about the offering and also the rationale behind it which is linked to a client's increasing digital requirements. Click here to see the article - WPP technology.

There is an article in today's Ad Age entitled ' Procurement - We're about Value, Not Price'. They have interviews with the Purchasing people at Pfizer and Intel. It seems to cover the same ground that the numerous other articles have covered - the role of procurement, are they trained, should they make decisions on agencies etc. Whilst it is good that they are getting that view, it does not seem to move the relationships and this category on. I do have the article if any one is interested in reading it.

I am more interested to see the output of the ANA Conference as it is covering some really good topic areas and is about looking to the future. The future is bright as my old company used to say.

An interesting Conference (in Florida!)

2010-04-26T07:35:00.003+01:00

For once I have just seen a really interesting conference that the ANA in the US are organising this week, so too late to go. It is their Advertising Financial Management Conference and it covers areas such as production, brand valuation, social media and the best title - 'Procurement: The Good, The Bad and the Ugly'. Here is a link to it - ANA Conference.

It has been many years since CIPS organised the annual Marketing Purchasing conference - perhaps it is time to resurrect it? We are certainly slowing down the learning and education of marketing procurement in the UK. There are no training courses as far as I am aware that exist at the moment. We were leading the way in Marketing Procurement but I fear we are losing that mantle.

There is also a blog entry on the ANA site about the conference as well - ANA Blog.

Wish I had booked to go (oh and the location sounds ok as well !).

The Post Digital World talk

2010-04-23T14:28:00.006+01:00

I was on the panel last week for Results International. It was called 'The Post Digital World: Tomorrow's ROI Models'.

Now you, like me, must be wondering where does a procurement person fit into that title (not literally of course). I listened very attentively to the three really good speakers before me talking about the holy trinity of DM, data and digital and then Social media:driving ROI and then Procurement!. Andy Collins from Results then did an up date on valuing your business and current market trends.

There were (luckily) a number of themes that I could pick up on and then talk about.

The first one was about a site called Net Haggler, where you could go on and suggest a price that you would like to pay for the item. I suggested to the audience (mainly agencies) that perhaps we could look at building one of these sites to buy agency services !. Sounds an interesting concept perhaps for low value tactical purchases.

Another point that one of the speaker mentioned was that he had never been asked to speak on ROI in the last 2 years. I was really surprised at that as for me this is one of the key areas that I think Client Procurement can lead on. Too often agencies complain that they see Procurement at the pitch and negotiation stage, and then they disappear after that. Diageo do Supplier Relationship Management really well and I saw in Supply Management that my old company, Orange, are rolling out a SRM program. Make ROI part of that program.

Andy spoke about how an agency can maximise its value if they want to sell. Areas such as being a specialist and not a generalist, developing and having key people that engage with clients and manage costs. All areas that we look at in agency selection. As client procurement we can help agencies be better focused on costs and put the processes and disciplines in place to support their growth plans.

So hopefully I held my own - the scores on the door have not been sent through yet.

I have also written an article for Results quarterly bulletin. It is called 'Why a Commercial Threesome can work'. I cover off some of the trends that we need to look at for 2010. If anyone would like a copy of the article then please do let me know.

Drinkers unite

2010-04-11T15:51:00.004+01:00

There is a good article in the current issue of AdAge about a a landmark deal that mega-marketers PepsiCo and Anheuser-Busch InBev have done. Together they spent more than $1.15 billion on U.S. measured media last year and are now pooling their scale to get savings out of media companies.

The arrangement is an evolution of a "joint-purchasing agreement" the two marketers signed in October. That pact was originally supposed to save the partners money on items such as travel, computers and office supplies. In fact, a PepsiCo spokeswoman at the time said that "the consortium is not related to media costs or marketing."

But less than three months later, A-B and PepsiCo have moved beyond scoring cheaper paperclips and onto network, cable, print and outdoor media buys. A-B and PepsiCo are believed to have already made joint approaches to media concerns such as NBC Universal, Turner and Condé Nast.

As the article then goes into say who will be next to decide to launch their own consolidated buying agreements in an effort to get more costs out of ad time. Then who could be next in line for this "joint-purchasing agreement": agencies ?

What about in the UK ? Could we see Morrisons and the COI team up perhaps ? Interesting area to debate through and let's see what happens in the US and if it spreads ?

A really nice feelgood video

2010-03-30T07:59:00.003+01:00

If you go to the APA site - http://www.a-p-a.net/, and scroll down the Home page until you reach 'Celebrating Adland'. Have a look at the video - it is really really good. It covers many of the old and new characters that we see in this wonderful world of advertising that we live and work in.

A nice thing to watch to remind ourselves of what great creative work looks like. Hope you enjoy it.

If you have some money...

2010-03-29T16:13:00.002+01:00

Just seen that the CIPS 2010 Conference is now open for bookings, with an early bird special price of £200.

With me bemoaning about the behaviour at that local event I went to, the Annual Conference is usually very good with an interesting mix of both public and private people attending. John Timpson (key and shoe repair man) and Michael Portillo (MP - not sure where he was on the old expenses scandal front).

Here is the URL for it - if you would like to attend - http://www.cipsannualconference.com/

This last 2 weeks I have mainly been....

2010-03-19T10:28:00.004Z

attending a breakfast, conference, a local women's forum and 1 CIPS Branch meeting (more of that later!). Bit of a long post here so bear with me.

I attended the Iris Procurement breakfast the week before last. There was a really good turnout and the topic was Payment By Results, with the panelists being from my old company - Orange and ISBA. The debate was lively with some good points being raised but I suggested that perhaps PBR is a bit dated. It has been around for many years and ISBA are about to publish their 4th study I think of their most recent study on PBR at clients. Don't get me wrong, I think it works well where there is a direct measure of the results of the work in place e.g. media savings, increase in sales, a well managed and objective client satisfaction survey. But I quite like some of these new fee models that newer agencies are talking about - areas like revenue share, getting paid xx pence for every new call to the new directory enquiries company. That is both investing in the marketing activity and if it works both the client and the agency get rewarded. I am aware of one agency that didn't charge a new client any fees but took a xx pence model and got a cheque for £1m. That is some incentive as long as the client pays up for course. Let's all try and be a bit braver on both sides and try and find a few areas where we can try a new model and see what the results are.

The ISBA Conference was interesting. There weren't that many purchasing folk there which I was surprised about. Conferences like this really help you understand the categories that we all work in and help you perhaps challenge and provoke debate with existing and may be new agencies on different ways of working to achieve efficiencies etc. Worth attending next year if the training budgets get reinstated. One comment to end on was the lack of women speakers - there was one. Come on Women in Marketing - let's see more of us next year (for once there was a queue at the men's loo not the ladies!)

Following on from the above theme - I am a cynic of all 'wimmin' things but attended a local 'Wimmins' Forum this week. It helped it was at a local chocolate making shop / school. All networking over a chocolate bon bon must be good. As most of my work comes from clients in London I rarely find this of interest but this one was really good. A very relaxed format, encouragement to speak to everyone there, no pressure to stand up and try and explain what you do (my Mother still thinks I buy pencils for a living !) and a genuine interest in what you do. I suggested a few high profile women speakers that live locally to them and hope to attend the next one which is entitled 'The Trials and Tribulations of a Women Entrepreneur' by HSBC - not sure of the HSBC connection.

And now onto my last event the local CIPS (Purchasing body) Branch event. Again I have only been to one before and that was fairly bad. Both in terms of content, attendees and lack of energy in the room. But as I chair the CIPS group on Marketing thought I would give it a good. The topic was of interest and a good speaker. Other attendees were mainly public sector and gave me a bit of up and down look as I was in 'casual advertising dress' e.g. jeans, shirt and my converses !. Everyone was polite but not that open to chatting to everyone, people kept themselves to themselves. But the main issue for me was afterwards with the speaker. Fair enough he had a product to sell - his training. But he then rang me up afterwards as I am sure that he contacted everyone and really kept going on about coming into see me and my company. I am sure that my two cats (Boston and Madsie) would be delighted to serve him tea and cakes if I am out at a client meeting. Mate - it is just me, and no I am not interested in training, no I am not interested in a meeting and no, no, no to everything else. It was a really hard sell and where in the small print did it say that he could contact me ? I have made my feelings known when they asked for feedback this week. So perhaps I won't get another invite but I just felt that the after sales activity as it were, was badly managed. That is my rant over with.

As usual, all comments welcome (and no blatant advertising as the comment was on my last blog post !).

Dentist negotiation

2010-03-09T08:11:00.002Z

Thanks to Craig for sending this to me. This is about negotiating with your dentist in a businesslike way and discussing the prices and the services that could possibly be cut out to reduce the prices. Makes my eyes water just thinking about no pain relief !

http://www.youtube.com/watch?v=fB9c2ocJOx4

But interesting good for thought as for me it is about agreeing the Scope of Work upfront first (one of my missions for 2010) and then discussing the resource needed to supply against that, and then the costs. It is not just all about looking at reducing a rate card.

Enjoy the video

Classic quote of the week

2010-03-04T20:27:00.002Z

Ten minutes into a negotiation with an agency this week, the Marketing person said "Oh yes and at client name (obviously removed to protect the innocent!) we have loads of money floating around". That is quite a hard comment to then start discussing production and fee costs with an agency that is under pressure to deliver creative work as soon as possible.

You have to laugh and it is part of what makes working in Marketing Procurement so much fun.

But the morale of the story is preparation and planning. Knowing what you want to get out of the meeting and agreeing roles and responsibilities (I did try to do that - honest!)

Has anyone got any howlers (from any side of the fence) that they want to share?

Don't you just love a great headline

2010-02-27T07:16:00.003Z

Something like when The Sun printed the classic 'Freddie Star ate my hamster', I am referring to the headline in this week's Campaign. 'Adland hit as billings collapse'. The Nielsen Company data for 2009 has been published and shows that there were rare examples of billings growth for agencies.

Obviously the driving factor of this is the reduction in client income (obvious statement of the week there sorry about that) but we are (and hopefully) starting to come out of a recession, and it is unsurprising that clients have had to reign expenditure in, but it will bounce back. I think the thing that got me about this article was that it was all quite dramatic and only really refers to the fact that things have been tough for clients and agencies in Claire Beale's Perspective column.

Good clients (Procurement and Marketing) will have been open and honest (as many of my clients have been) with their partner agencies to say this is where we are, let's ride this out together and come out the other side all the better for it. I still see bad examples of commercial ways of working from both sides. The Scope of Work is the starting point of all discussions - but whose responsibility is this ? I would think it is the clients but I see agencies completing on behalf of their clients - any views on this (go on - let me know that I have at least one reader for this blog!)

Iris are running their 3rd in their series of Procurement Breakfasts on the subject of Payment by Results. It is on Thursday 11th March, and if you are interested in going, please contact Nicola Osmond on 020 7654 7343, email: nicola.osmond@iris-worldwide.com.

Coke and KFC together

2010-02-19T13:49:00.004Z

No, not my lunch today !- they are both in this week's Campaign magazine.

Claire Beale has written her perspective on the new remuneration model that Coke are rolling out, as briefly mentioned in a blog posting last year. She feels that it is a real gauntlet for traditional agencies and other advertisers, as it is about rewarding on performance and not on time sheet info (which having had to do one myself we all know is not 100% accurate). Claire feels that it is good to have both the risk and reward element in (good old PBR schemes etc) but feels that there are many wrinkles to sort out first.

Page 17 then has a whole page devoted to it with a number of quotes from 'insiders' - which makes me laugh. At least Coke are getting a lot of press out of this. I do like the different approach and I do encourage agencies that I work with to be creative. Put a safe fee structure on the table but give me something that rewards exceptional performance as well. The main sticking point to the latter is having a brave marketing person to speculate with their marketing budget.

Then on page 19 there is an interview with the KFC Marketing Chief. She says that she keeps procurement at arm's length. She is happy that they negotiate with suppliers such as Pepsi but not her agencies. Every one is different and entitled to their view of course. But saying 'marketing services is my territory' I feel is a bit short sighted as I am sure that her procurement team could really help her in all manner of areas - maybe I should contact them !!

Also there is an interview in Media Week from October 2008 where she was asked "What role does procurement play?". The answer was "In the current economic climate, it plays an increasingly important role in the selection of agencies.".

What changed in a year ?

The video to go with the article

2010-02-17T21:31:00.002Z

I have just come across this video of the Ad Age view on Procurement that was all in the press last November. It is only 3 minutes long and it is interesting to hear their view of the procurement with no real suggestion on how to develop and improve the relationships that they feel are damaging to the ad industry. Click here to see the video.

Dealing with Procurement is chic!

2010-02-09T21:46:00.003Z

As one of my clients said to me when I sent him the headline 'Procurement Pain: TBWA Anoints a Chief Compensation Officer '.

As Ad Age reported :

Rising tensions between agencies and marketing procurement have birthed a new role in the agency C-suite: the chief compensation officer.

Omnicom Group's TBWA/Chiat/Day has appointed Neal Grossman, as its first global chief compensation officer.

The role -- which is distinct from TBWA's chief financial officer -- means Mr. Grossman will be the one leading contract renegotiations with clients and procurement officers, and overseeing fee discussions during new-business pitches. He'll also be tasked with developing value-based compensation models that are mutually beneficial to the agency and its clients.

But as my client said when he was appointed 5.5 years ago there was not this type of headline, but these days is it trendy ? or is it a necessity ? Certainly in the UK market, since I worked at Grey and Lowe, and Emma Nussey at AMV, there has been no significant agency appointments to be that focal point in dealing with procurement.

So I think it is a good sign, as long as they understand both sides and are collaborative in their approach. A defensive stance will not help the commercial relationship to work.

Another cartoon for you

2010-02-08T17:57:00.004Z

Thanks Paul for sending me this from Win without Pitching. I think I have mentioned this company before. They do a lot of work with the DBA over here and strongly advocate against the need for agencies to pitch for work.

I am not sure if he likes procurement, judging by this cartoon. Click here to see it.

Missive being sent

2010-02-08T17:30:00.009Z

I love that word - missive, used in a friendly procurement sort of way. The 4A's in the USA have sent out a letter (aka a missive) last week to 30 major industry consultants (like the AAR, Haystack). The letter asks them to adopt contract language that reflects advertising agencies' right to retain creative ideas presented during new-business pitches.

The 4A's letter was endorsed by around 50 Madison Avenue agencies, such as JWT, Anomaly and R/GA.

Apparently there has been an increase recently in agencies complaining about clients' desire to own ideas and work shown during the new-business process. They cynically say that it is usually hidden as a clause at the very back of a 14 page NDA (that is a very long NDA).

I have heard of this happening once in a big pitch for a retailer, where the procurement folks asked if they paid a nominal pitch fee of £5k to all the losing agencies, could they have the right to own the creative work developed for the pitch !. I thought that this was not in the spirit of things (I would have offered half that - joke). Also what would the winning agency think ? We like your idea but here is one that we prepared earlier?

I have an agency at the moment asking for a similar type clause to be added into their contract (they have been appointed by the client). But they want it quite clear that for any development work taken in any potential pitch process they want to own it. I have never seen this before and it seems reasonable to me.

Do you think that this is the year of agencies being stronger about owning their IPR?

Following on from the cartoon

2010-02-01T18:09:00.002Z

Someone (thanks to Nick W) kindly pointed out this video link that was on one of the comments underneath the cartoon. It is called The Vendor Client Relationship - in real world situations. It is very good and sums up some form of negotiations that could happen in a restaurant, a record store and a hairdresser. Watch it and tell me that you don't think "oh sugar" at some of the things that they say.

Click HERE for the link to it and let me know if you think you recognise any behaviour in it !.

The best cartoon you will see this year

2010-01-27T21:04:00.000Z

http://www.tomfishburne.com/.m/tomfishburne/2009/05/the-agency-bid.html

Relationships and Music money

2010-01-26T21:16:00.004Z

There is a good article on the Procurement Leaders website blog about the importance of experience, knowledge and relationship building in the marketing procurement arena.

I do think we need to look at the training that exists out there as mentioned in an earlier blog. We have seen companies such as Diageo train up marketers to be purchasing to fill the skill gap. But as one of my contacts said to me yesterday the training that has existed is very 'numpty and ABC..'. What exists for the more experienced buyer ? What in house training programs are in place to build up strong marketing procurement teams that can take over the world (sorry getting carried away there!). May be we should make 2010 the year of working together to get some really good solid training programs together - all thoughts and comments welcome.

Also just seen this on the BBC website re artists selling their songs to ad agencies, linking back to my posting on decoupling of TV production. Apparently US hip-hop star Pharrell Williams has advised new acts to approach ad agencies, ahead of record labels, to help launch their careers.

But Blur's Manager said that whilst Blur themselves have allowed their tracks to be used in commercials, he felt that artists should think very, very careful about how they associate with brands," There was a "great danger of music being 'corporatised'", he warned.

Blur's 1997 hit Song 2 has made the band 20 times as much money through use in ads, TV shows and film soundtracks than record sales, Mr Morrison revealed. Not bad eh ? 20 times more than record sales. I thought that was an amazing sum of money.

It is worth talking to any TV Production Consultants that you may use or someone like Leap Music to see what your options on when buying any time of 'well known / popular' music track.

Tomorrow's World

2010-01-22T09:49:00.004Z

Last night I attended the presentation of the annual financial survey by Kingston Smith W1. The report is called 'Financial Performance of marketing services companies'. This is for figures published for 2008 and from what they are predicting, the 2009 report (published this time next year) will make very different reading.

The whole report is 161 pages in total. They survey the top 50 independent UK marketing groups and also UK Quoted Groups and then analysis their financial standing by discipline (Digital, Advertising, Media Buying etc).

It is really interesting reading (it is too heavy to carry and read on the train !) and covers areas such as turnover, employment costs, operating profit, the key ratios that we like to look at such as employment costs: gross income, and the favourite bit - the Director's salaries (the highest one being paid £1.5m).

The sector by sector review is also really interesting. Media Buying and PR come out as doing well (in terms of profit margins) with direct marketing and digitial (surprisingly) have low returns of their margins.

Well worth the investment and a good source of data in terms of finanical status of some key agencies. I am not sure if you can buy it directly now, but here is a link to it on the KS website. Click here.

P.S. Just seen that Campaign have a four page spread on the report (page 24 - 22 January issue)

Recouple, Decouple - new word needed

2010-01-19T21:10:00.001Z

I had an interesting day today with all my meetings relating to third party production suppliers increasingly talking direct to clients. Something that we all know has been on the agenda for a few years, certainly in the press market. But the likes of Unilever, Boots and most recently Reckitt Benckiser have gone out into the market place for TV post production suppliers.

It is funny as in an area such as print, we have for many years, used print buying companies to buy print for us or gone direct to the paper mill if we are sourcing large volumes of paper. On press / artwork production, I think that around 70% of the top 100 advertisers have now deals direct with the suppliers. But Procurement getting involved in TV has been at a slower level. I don't want to open the old decoupling debate that was around a few years ago, but wonder why it is at a slower pace. All comments welcome of course.

I am also just finishing off some work for a client about press production, and what the view in the market place is on it. If anyone has 5 minutes, I would appreciate your views on this quick survey - http://www.surveymonkey.com/s/N298LKP

Back to Skool

2010-01-13T18:37:00.004Z

I have been sent an email by the Chartered Institute of Marketing - the subject heading was 'Marketing and Sales Standards'. Interesting I thought and I read on. Their vision is for a comprehensive and robust qualification structure for the marketing profession (like our CIPS?).

One of their 5 reasons for looking at this is address any skills gaps and this includes commercial/business awareness (good point as I think it is an area that Marketing could develop as long as it doesn't do procurement out of a job !).

But my thoughts were that I hear more and more agencies asking the procurement person if they are CIPS qualified and indeeed I think quite a few agencies have become associate members of CIPS to get the 'inside track' on us. I only know of one agency that has a procurement person and he is going through his CIPS qualification.

My point being that procurement are asked and perhaps judged on the industry qualification, what about Marketing ? Is CIM a current must for marketing people ? I know many excellent Marketing people and I bet that they are not CIM qualified. Are CIM trying to drive the qualification structure for the good of the marketing industry or for CIM ? All comments welcome and I have the link to the survey, if anyone would like it.

Interesting stats in the mailer

The marketing profession, which includes marketing communications, is a significant professional group within the UK economy across all four nations

It employs approximately 592,000 people, which represents around 1.9% of the UK’s workforce

It is estimated that approximately 90% of the marketing workforce is employed in England, 6% in Scotland, 3% in Wales and 1% in Northern Ireland

A bit about technology

2010-01-06T11:36:00.002Z

Hope those of you that are snow bound like me are making the most of catching up on any backlog from the festive break.

One of the things that I was really surprised about when I became a 'poacher' or was it a 'gamekeeper' when I moved agency side, was the lack of technological systems and processes that an agency had in place, both for its own internal use and for the interaction with clients. I think it is improving a bit but it seems to be more lead from the client.

Systems such as Digital Asset Management systems are being used more and more in the back of the decoupling of press production activity from mainstream agencies. But what about process management ? Are there systems in place that can improve the efficiencies and therefore the costs long term of the briefing to the final approval stage? Are clients looking at companies such as BEAM, Adstream and Adgistics to improve their supply to the market. Be good to get any one's thoughts on this topic. I know that some of it does come down to budget and where does the cost sit - it is a Purchasing initiative but requires investment from Marketing.

What prompted me was that I have just come across this Event in February and have booked to attend - Technology for Advertising and Marketing. Be good to see what is out there for both clients and agencies to consider. Click here for the link to the event.

2010 - the future is measurable

2010-01-04T19:29:00.006Z

I have been thinking about the key areas that the industry needs to focus on this year. One of the recurring themes is ROI / measurement and relationship management.

I am working on a potential project that is focused on the Press Cuttings part of the PR category. For me it is that the stakeholders should not be relying on this service as the key measure of the sole indicator of the success or otherwise of their investment in PR. It is essential that measurable public relations objectives are set. This will tell them where they are starting from and where the PR programme is heading.

At a basic level they need to look at six steps to set up these objectives up:
o Define the objectives
o Determine the criteria
o Select a benchmark (what does success look like ? to the stakeholders and procurement)
o Select a measurement tool
o Compare results with objectives
o Modify campaign

The other part of measurement is the 'it is good to talk'. It is important that all key supplier relationships are audited. At one of my companies, we invested in a third party relationship audit company to provide a 360 degree audit of us (you can also do it yourself as well) and then our three top agencies - Media, Advertising and Brand. The cost was then split 4 ways as it was important that everyone had an equal say in the process. The feedback and the agreed action planning worked really well. The 2 suppliers I would recommend in this area are Aprais and Relationship Audits and Management.

A lot of the time the results of the audit can then feed into a Bonus or Payment By Results structure. I know that some companies in the Telco and FMCG sectors are rolling these programs out globally to all their key agency relationships. Be interesting to see the data in a few years time of 'investment in the process' versus ' benefits gained in the long term'.

Another article about Procurement

2009-12-22T10:49:00.006Z

Last week's issue of Marketing Week (17 December 2009) has a fairly lengthy report on Procurement, entitled 'Keep your eyes on the price'.

It starts off with how Marketing often see Procurement as the enemy. But there is a balanced view from the people that were interviewed including Julie Constable who does some work with the MCCA, and I worked with at AAR a few years ago.

If anyone wants any more detail on the article, just drop me an email. I hesitate to waste my time typing up more press about us but maybe one day, there will be less articles on our role and more centred and written from the general acceptance of our role.

New Year's resolution perhaps - that we all aim to get the positive PR machine rolling in 2010 !

Stars and Stripes

2009-12-17T11:10:00.004Z

Back from my trip to New York New York!. I had a meeting with a global network agency to kick off a clients' 2010 fee negotiations and also met up with a TV Post Production company.

The scale of the clients spend in the US is absolutely massive - you are talking total COI spend multiplied a few times. I also get the impression (and forgive me if I am wrong) that as a market they are less developed in the way that they deal with procurement. The chaps at the TV Post Production company said that as the scale is so huge the agency heads are calling the shots, and in one agency that could be the Head of Account Management, Head of Creative and Head of TV - three Heads for one account. What chance do Procurement have?

But of course, there is the view of the agency - earlier this month, Ogilvy’s Head of Northern America, John Seifirt, in a memo to staff a nnouncing 90 redundancies blamed client cost-cutting and the role of procurement departments for the structural changes being forced on agencies, including his own. No responsibility back on the agency then to cut their cloth in terms of economic hardship then!

Let’s Play Ball!

2009-12-09T14:48:00.003Z

I am just about to fly over the water and came across this blog by an agency in the US. They are called Mad 4 Marketing - what a great name. They have posted a blog following the infamous Ad Age article and the summary of it is "Let’s Play Ball!”. They agree with some comments that people have raised in this blog - "it’s an educational process. Business development people should be including procurement leaders in their outreach. As previously mentioned, 90% do not have marketing backgrounds and would benefit from being part of ongoing dialogue".

Click here for the whole blog. It is nice to see a positive and proactive view of the way forward.

P.S. not sure about the 90% stat!

Is there a theme emerging ?

2009-12-07T22:09:00.004Z

I did a talk tonight to the Pimento agencies. They are a network of individual and specialised agencies who run separately and also together under the Pimento umbrella - expertly managed by Stephen Knight and Isabelle Beauquin.

They were really interested in hearing about the role of client procurement and I got onto my favourite soapbox of the month, please support / accept and work with client procurement.

The main two issues that they raised (and I think that they have a point) is:

All too often in tender processes, procurement are faceless and you cannot interact with them (this was brought up at the Iris procurement breakfast as well)
Does an e auction work for marketing services ? (I like e-tendering as it reduces the amount of paper used in a RFP process but think it is very hard to use e -auctions for services - goods with a fixed specification - yes)

I know it is hard to talk to suppliers during any procurement process but in an area such as the one that we work in (marketing), as Bob Hoskins used to say in the old BT adverts "it is good to talk". Positive client - agency - procurement dialogue is productive when it works well.

Is that a glimmer of hope I see?

2009-12-04T08:37:00.003Z

In this week's issue of Supply Management (page 8), there may be some light at the end of the tunnel.

Ray Jones, who is head of communications at the Chartered Institute of Marketing said and I quote "the onus is on marketers to appreciate the value buyers can add to their projects. It is up to us to keep up to date with business and to be numerate enough to work closely with procurement to prove there is a good return on investment".

Sounds great. Now they just need to communicate that to their membership and all the marketeers in the UK maybe the world that have a block about engaging with their procurement teams. Here's hoping.

Is this answer to the ' can we measure ROI' question?

2009-12-02T21:44:00.002Z

Mike from CIPS has forwarded me this press release from the COI on how they are looking to put a common approach in place to calculate the financial effectiveness and efficiency of public sector marketing.

The paper shows that the 1998-2005 Teacher Recruitment campaign not only paid for itself; but should provide returns of another £85 for every £1 spent. While the Tobacco Control campaign, is estimated to have saved the economy £7.1bn; against an advertising spend of £49.3m between 1999-2004.

The paper proposes a series of universal definitions to ensure practitioners adopt the same terminology and outlines a 10-step process to help government communicators determine sensible and robust estimates of Payback - the absolute financial benefit delivered by marketing - and Return on Marketing Investment (ROMI) - the number of pounds of Payback delivered, less the cost of the marketing - for every pound spent. It also provides six key principles that should underpin this.

Here is a link to the PDF on the COI website - click here.

First blog article revisited

2009-12-02T21:33:00.003Z

There is an article on the Procurement Leaders website blog about that Ad Age article that I mentioned in my first blog and the influence of procurement, States side. Click here for the article.

What is interesting is that Jonah Bloom, the Editor of Advertising Age hits back and explains the rationale behind his view on the impact of procurement on agencies revenue.

The best quote in the article is 'The squeeze in fees that the advertising industry is experiencing is as a result of better communication between marketing and procurement, not worse'. I think that this is true as the relationship between marketing and procurement is constantly improving.

The sector that I see that 'gets' procurement is Media. I am often asked to do training for the media agencies and support on key tenders. As buyers themselves, I think that they get it and understand and appreciate their role in a tender/pitch situation. The sector that really doesn't get procurement is Design. They really struggle to see how Procurement can put a value on creativity. My advice to any design agency that approaches me - is to help then, help educate the value of your output and work with procurement to get a solution in place that all three parties (including the Brand / Design person) are happy with.

Is it time to review how agencies are paid?

2009-11-30T13:44:00.003Z

I have just read on Brand Republic that the UK Gym chain LA Fitness have signed a four-year profit-sharing deal with the celebrity Alesha Dixon. Her fee will be based on the success of LA Fitness over the four year contract period. It is rumoured that the highest amount (rumoured to be £3m) she could earn is three times bigger than the lowest fee (assume that this is a £1m).

I really like this reward and risk payment and I suppose in one way, that is why the old commission system work. If a piece of advertising works, then it runs and runs, and all the agencies involved in creating that advertising, benefit in the long term.

The key phrase there being long term. Perhaps it is a good time to start thinking about the current commercial models that are in place and see if there are ones that can financially reward all parties involved. What do you think?

Thursday part 2

2009-11-29T09:16:00.004Z

I presented at the MandM Briefing on Thursday afternoon on Advertising strategies for the upturn. My fellow presenters were Guy Abrahams from ZenithOptimedia, Peter Walshe from Millward Brown and Nick Manning from Ebiquity. It was very well attended and we had a very panel discussion on topics such as measuring ROI, whose role is it to put measurement in place and the role of new technology in the media mix.

My bit was on the trends in the media world from a procurement / client viewpoint. I said that it was mainly focused on 2 key trends: Procurement is here to stay and (more) focus on Openability (not sure that is a real word!) and Accountability.

I thought that the whole briefing and panel discussion were good as procurement were seen as equals in the discussion topics and really able to contribute to the what is the future of advertising and advertsing budgets, and what we can do to help.

Copies of the presentations can be seen on http://mandmglobal.com/content/SocialNet/adknowledge/147896541236987453/198605334

Danish Pastries and Bacon Baps

2009-11-27T07:19:00.005Z

Good turnout at the Iris Procurement Breakfast with very generous breakast choices ( I just had the fruit!).

Jane Dormer (Head of GB Procurement at Coca Cola) said that agencies should always look to invite their procurement clients into the agencies as soon as they are aware of the procurement person so they can understand the agency and what they are doing for the client. Totally agree. It happens as soon as a new Marketing person is appointed but not when Procurement are appointed (and we won't just look at the chocolate biscuits!).

She also touched on the new value compensation model that Coke have been rolling out globally and have just started to discuss with their UK agencies. It is about paying agencies on output / on their deliverables with zero profit. There is then a performance payment based on agreed measurement. This can be up to 30% of the agreed output level, and there are upper and lower limits on the output. I quite like the concept of paying by output and have worked with a few agencies that have used this model. My only observation is that it is the client 'dictating' the value of the output when all agencies work differently and is this bringing a degree of uniformity and standardisation into the commercial model ? Good food for thought though.

Tony Spong (Head of DM, SP & Integration (I think that is his title sorry Tony if it is not) from AAR) discussed the fact that a pitch is always a good time for the client to have a 'clear out from their garage' and use the pitch process and time to review how they work as a client. I really liked this idea as procurement can really help to evaulate ways of working and processes to make them more effectively and utlimately more efficient for all parties.

At Orange I worked with our contract publishing company - John Brown, to look at one page of amends and the costs that we had incurred. I then sent this information around to the marketing team for them to see. They could see that just by changing one word - what the impact on the timescales and the cost of doing that was. Quite powerful information.

The replacement to Kelly's Directory

2009-11-25T08:02:00.004Z

Went to the AAR End of Year Drinks party last night. It was great to see Kerry and Paul and lots of agency folk there.

Companies such as AAR (The Haystack Group and Creative Brief being the other two ones that I would also recommend) play an invaluable role in helping procurement and marketing know and keep up to date with the very complex and every changing agency market. Years ago (before the good old internet) I had to rely on Kelly's Directory (hands up who remembers that?). As Procurement we work alongside the process that they bring in managing all the commercial and contract elements of a pitch.

Malaysia - our fame is spreading

2009-11-23T21:27:00.005Z

Just seen an article from the Malaysia press (http://biz.thestar.com.my/news/story.asp?file=/2009/11/21/business/5138912&sec=business)

Quite an interesting viewpoint from the author - Paul Loosley, with 2 paragraphs that stood out for me - shown below. Interesting re his view of the ad agencies and one I have to say that I do agree with. But re the 2nd extract I don't want this blog to become a listing of all the negative press that marketing procurement get but it is funny that it seems the world over, the view is similar. Let's spread the positive word - we can help and we can make a difference (sermon over with !)

"Due to market forces, the alignment of planets or perhaps a prediction from the Mayan calendar, the ad world seems to be suffering from an amazing amount of seismic shifting.

...nature is super heating the traditional core of advertising; the ad agencies. They are being hit by a veritable tsunami of change; the heavy hand of procurement, the removal of the media function, marketing input taken up by consultants, the digital revolution and so on; so much so, agencies are now calling themselves “creative” agencies to try to stop the end of days

Goings on this week

2009-11-22T10:30:00.003Z

Two events that may be of interest this week

iris are hosting a Procurement Breakfast at their offices on Thursday at 8.30am. Guest speakers are Jane Dormer of Coke and Tony Squires of 4C. Contact Nicola Osmond (nicola.osmond@iris-worldwide.com ).

There is a M&M Briefing event also on Thursday looking at “When Should You Spend? Advertising Strategies in Recession and Recovery”. The event is sponsored by the FT and should have around 100 agency and marketer delegates attending. Contact emily@csquared.cc

Hot off the press

2009-11-21T07:59:00.002Z

Just seen this blog posting from Blair Enns whose business is about how to win without pitching. He works closely with the DBA in the UK. Very strong views on procurement and how the venture into marketing procurement is not working. Worth a read.

http://www.winwithoutpitching.com/the-rise-and-fall-of-procurement

Here we go - first ever blog!

2009-11-21T06:44:00.001Z

"As I hurtled through space, one thought kept crossing my mind: Every part of this capsule was supplied by the lowest bidder." John Glenn, Astronaut

“The question remains whether the procurement process can successfully purchase creative services in the way door handles or raw materials are bought. The emphasis on procurement seemed to have started in the pharmaceutical industry and then moved elsewhere.” Martin Sorrell – CEO WPP

I thought it was appropriate to start off my first blog with a few quotes about procurement - the latter from Sir Martin on the wonderful world of marketing procurement that I work in.

The question that has been bugging me this week is why is there so much negative press about marketing procurement. There has been the recent article in Ad Age bemoaning the experience or the perceived lack of marketing experience of procurement folk. Do other industries and their trade mags see the involvement of procurement be it in the buying of travel or raw materials as negative ?

As with every role there are good people and there are some that perhaps may need some further training (happy to help of course!)- but it would be good to stop the negative comments and get the role and value that marketing procurement bring to agency relationships as positive and as natural in the marketing procurement sphere as the search and selection and media auditing companies. All suggestions welcome!.