A positive story to end the year on

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

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

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

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

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

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

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

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

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

A great new ad

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

....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

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

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!

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

(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

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

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

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

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"

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."