02 October 2003
Purchasers need to overcome the distrust of their colleagues to influence spending on creative services. David Arminas assesses the way forward
Purchasers will struggle for acceptance with their own company's marketing department and the agencies they use. That's the key finding of a recent CIPS survey on trends in the purchasing of marketing services.
Mistrust by both sides hinders co-operation and, by definition, holds companies back from achieving their goals.
The survey, unveiled at this year's CIPS marketing and purchasing conference in London last month, showed purchasers are eager to get more involved. But they appear to be rebuffed by marketers, of whom less than a quarter of purchasers said had invited them into the buying process.
The crux of the problem lies in the belief by both sides that buying marketing services (the so-called creative services such as television and radio commercials), as well as public relations and the contracting of advertising campaigns, is different from buying widgets.
Marketers believe purchasers know all about the price of widgets, but see them simply as cost-cutters and not value-adders. A failure of many purchasers is that they, too, believe this. That is why marketers are suspicious when approached by purchasers, according to Paul Keirnan, associate director of Edelman, an international public relations firm that carried out the survey.
"If the purchaser comes to work with me, I want to know what is in it for me to co-operate," he says. "I don't want to risk losing an already good relationship with my agency. If I risk having my marketing budget reduced, what is in it for me?
"What needs to be done between the triumvirate - purchasing, marketing and agencies - is to find common goals," he says.
The question for purchasers is whether they can grasp the real value of these creative services to their company and work with marketers and agencies to reach these common goals.
There is evidence that purchasers have the expertise required to fully appreciate the concept of an intangible output. For example, public-sector purchasers working on controversial private finance initiative (PFI) involving construction projects don't actually buy a building. This was the case with the Ministry of Defence's command and staff training college at Shrivenham, which was praised as good value for money by the National Audit Office in February last year.
PFI negotiators focused on output: around 2,000 personnel who were to be trained each year in surroundings and standards that were compatible with getting best out of the MoD's people. The building was a secondary consideration to this.
The real issue, as Graham Hinton, director of advertising agency Seven Worldwide told SM, is that all sides - purchasers, marketing and agencies - don't fully understand how to measure their success accurately.
A recent television ad campaign for Skoda cars increased brand awareness among the public. At the same time, Skoda car sales increased dramatically. The question remains as to what extent the campaign increased sales.
Without this accurate measurement, it is difficult to put a true value, other than the simple cost of production, on the TV ads or ad campaigns. Purchasers will have to fight this urge, argues Hinton.
Colin Murray, senior buyer of marketing services at Britvic, is typical of purchasers who have taken on this challenge. He was a buyer of packaging materials until last month.
"It's a pretty daunting task because it is not as straightforward as buying widgets," he says. "The process is a lot less structured and not as measurable. The key thing for me is being able to build trust in the relationship within marketing departments."
It is into this arena that purchasers must step. In this new world of purchaser-marketer-agency, there must be a relationship that will allow all three to solve the connection between money paid and a measurable output gained.
The issues will not be black and white for purchasers as they seek to work with their colleagues in the marketing department. A one-size-fits-all approach will certainly not work for every company.
Some purchasers will be told by their board of directors to simply go in and cut marketing budgets. Others will be told to improve efficiency. In both cases, purchasers will need to understand what marketers want to achieve and help them to get there.
Purchasers could ultimately be the marketing department's best friends - if they can show marketers how to spend money more wisely, get more bang for their buck, and receive accolades from the boardroom.