Further to previous posts here on the topic of procurement here and here, which highlghted problems with focusing on cutting costs in relation to marketing services, rather than increasing the value of the services provided, I was interested to read the Procurecon Benchmarking survey. This survey was conducted among 2,000 procurement professionals across Europe by the team behind the Procurecon conference, as blogged about here.
The results are pretty clear. "'Total cost savings' came out top as the most popular metric for measuring the value of procurement (85%)… The second most popular answer was 'cost avoidance', with 77% of respondents using this metric."
(The respondents to this survey may not have been limited to marketing procurement specialists, which might skew the results. But even at the Marketing Procurecon, a show of hands poll indicated an overwhelming focus on cost-cutting as the key measure of procurement effectiveness.)
The report's final conclusion: "Savings continue to be the default way of measuring how well procurement is doing its job."
So that's unequivocal: the job of Procurement is to buy the same, or more for less. Success is measured by reducing agency fees and associated costs.
But, as previously noted on this site, Marketing is an investment not a cost. (Nothing is easier than cutting marketing costs – if you don't believe it’s adding value, just stop spending.) Nobody makes an investment decision based solely on price. (Who buys a share in Microsoft because it’s cheaper than a share in Coca-Cola?) Marketing Procurement should not be about minimising costs, it should be about maximising the value of the investment. As someone once said – nothing is more expensive than cheap legal advice. The same goes for marketing services.
This report makes grim reading for agencies and reminds us that we need more than ever to be focused on accountability for what we do, so that we can prove the value we are providing. We must do this in close partnership with client marketers, who share our interest in accountability. Without this, the debate will only ever be about cost.
