You Can't Avoid Procurement, but You Can Learn How to Sell Them

Few words strike more fear and loathing in the hearts of agency management than “procurement.” This P-word gets its rap from being viewed as an impediment to an advertising agency’s ability to sell its strategic and brand-building creative expertise. Instead, agencies have to sell on price.

However, the role of procurement isn’t that simple.

It has its own ying and yang.

It's a ying because agencies often view procurement as the bad guy. Procurement executives are perceived as the group at the client that initiates reviews based on a timetable that disregards current agency success (take that incumbents), has no clue about the wonderful world of marketing magic that advertising agencies deliver, views agencies as being interchangeable, and worse, that it’s all just a numbers game. What agency would ever want to negotiate with procurement? The low bid wins the account. It’s all about price over art. It kills the soul.

I think that this is a bad rap. Maybe.

I say maybe because I think that we can divide procurement executives into two groups. The first, my yang, work at larger clients and have a few years experience working with marketing services agencies. This experienced procurement executive understands the complexities of the client agency relationship and marketing itself. In many cases, they have been schooled by organizations like the Association of National Advertisers to better understand how marketing works, its bottom-line value, and how agency relationships are born and managed for success. These relationships span the strategic and creative deliverable, usually the prevue of CMOs, to financials, operations, compensation, and contracts which are the expertise of procurement.

The good news is that procurement executives, contrary to the popular belief held by creative directors, actually have a left and right side of the brain. Here is a revealing quote from Craig Brown when he was Intel’s VP of materials procurement and supply chain.

You want to get the A-team on your account because the creativity often comes from that 5% to 10% of the agency's population that has the whizzy brain idea. So you want to be careful you're not just paying for warm bodies, that you actually have an alignment of the quality and creativity. That was a wake-up call to me. I didn't see it as extensive with some of our other contracts as I did in the agency world.

I believe that it is important to note that according to Brown, procurement executives were well aware of the relationship of big ideas to sales way back in 2010.

My yang.

The second group of procurement decision makers are, in fact, clueless when it comes to judging agencies. They are corporate purchase decision-makers that have been put into the agency selection process without much, if any, idea of how marketing works. They are inexperienced in working with agencies and in understanding the complexities of marketing. They live up to our greatest fear that the procurement department is going to apply the same performance metrics to the art of a service like advertising that they apply to buying office supplies. While this might be an overstatement, in many cases it is unfortunately very close to the truth. We see it in poorly crafted RFPs that sound like the ones used to buy coal.

Yes, I am agreeing with some agency executives that procurement can occasionally be the boogeyman.

Get over it. Procurement now plays a role in most high budget advertising agency searches according to Russel Wohlwerth of the agency search consultancy External View Consulting Group. “For us, about 75% of searches involve procurement," said Wohlwerth. "In some cases, we are hired directly by procurement. In other cases, they are an observer until we get into the RFP stage.”

The way to get over it is to be proactive. Spend some agency time getting to understand the role that procurement plays in agency selection, and be well schooled on procurement’s motivations and interests.

Here is an idea: If procurement is going to be in your meetings, then plan your key points the same way you plan your discussions with marketing directors. Think through the procurement executive’s role and mindset, and make sure that your compensation discussions recognize procurement’s needs and hot buttons.

Why not have an agency white paper on your attention to financial management?

If you really want to impress by talking the procurement walk, then have a POV on how your agency uses ISO 9000 quality management systems. Is this a bit esoteric? Maybe. But, you also use esoteric terms like programmatic buying, CRM, behavioral targeting, and video completes when talking with the marketing department.

If procurement is going to have to be sold on your agency – then sell them.