By: Chad Carlson
Senior Director, Global Advertising & Agency Management
Oracle, Corporation
October 26, 2009
The fact of the matter is procurement isn't going away - nor should it. What we need to do as marketers (both clients and agencies) is to ensure that a base level of education goes into the process on all fronts so expectations and level-setting happens at the beginning of the project.
Having led two significant reviews in the past several years - both of which initiated due to procurement policy - I also see a major issue in that our procurement teams are often 1) far too focused on the bottom line, and 2) many have zero experience and/or understanding of our industry. Treating an agency review the same way as a commodity such as reams of paper, is not going to improve the situation or the outcome.
This spring I was "forced" to put my agency into a review purely because it was policy to do so - nothing to do with performace, or our happiness with the relationship. After much back and forth, I was able to convince the internal procurement teams that a global agency-of-record review not only detrimental to our relationship (sends a bad message to the marketplace that there are issues, and it rocks the morale of the agency) it takes massive resources internally - particularly if a change in agency was the result - and would have literally taken us out of market for months.
In the end we were able to convince our internal procurement team to allow a "Benchmark Review" to measure our current agency against other comparable agency structures in the market - without going into a full global review.
Along with the guidance of Catherine Bension at Select Resources International, I also set up an all-day procurement training seminar so they got an "advertising industry 101" so they got at least a basic bootcamp understanding of compensation models, industry standards around structure and how to look at output of work vs. outlay of spend.
At the end of our review this spring, I genuinely believe that all parties were happy with the final result, including our agency Starcom (who remains our global agency-of-record) and our internal procurement team, who feel they had not only a stake in the review, but also helped drive what the end result would be (and they had the education in place to go back to their management and say definitively that the relationship is strong and the company is getting the best value for our needs.
Clearly, based on the volume and passion of the posts on this article, this is a major issue withing our industry - one I've personally felt and had to manage through. While not the silver bullet by any means, the successes I've seen all started up front with education and a clear understanding from all parties involved up front of what each of the many stakeholders wanted to get out of the process at the end.
Chad Carlson
Senior Director, Global Advertising & Agency Management
Oracle, Corporation
Senior Director, Global Advertising & Agency Management
Oracle, Corporation
Having led two significant reviews in the past several years - both of which initiated due to procurement policy - I also see a major issue in that our procurement teams are often 1) far too focused on the bottom line, and 2) many have zero experience and/or understanding of our industry. Treating an agency review the same way as a commodity such as reams of paper, is not going to improve the situation or the outcome.
This spring I was "forced" to put my agency into a review purely because it was policy to do so - nothing to do with performace, or our happiness with the relationship. After much back and forth, I was able to convince the internal procurement teams that a global agency-of-record review not only detrimental to our relationship (sends a bad message to the marketplace that there are issues, and it rocks the morale of the agency) it takes massive resources internally - particularly if a change in agency was the result - and would have literally taken us out of market for months.
In the end we were able to convince our internal procurement team to allow a "Benchmark Review" to measure our current agency against other comparable agency structures in the market - without going into a full global review.
Along with the guidance of Catherine Bension at Select Resources International, I also set up an all-day procurement training seminar so they got an "advertising industry 101" so they got at least a basic bootcamp understanding of compensation models, industry standards around structure and how to look at output of work vs. outlay of spend.
At the end of our review this spring, I genuinely believe that all parties were happy with the final result, including our agency Starcom (who remains our global agency-of-record) and our internal procurement team, who feel they had not only a stake in the review, but also helped drive what the end result would be (and they had the education in place to go back to their management and say definitively that the relationship is strong and the company is getting the best value for our needs.
Clearly, based on the volume and passion of the posts on this article, this is a major issue withing our industry - one I've personally felt and had to manage through. While not the silver bullet by any means, the successes I've seen all started up front with education and a clear understanding from all parties involved up front of what each of the many stakeholders wanted to get out of the process at the end.
Chad Carlson
Senior Director, Global Advertising & Agency Management
Oracle, Corporation