30 November 2005 | Rebecca Ellinor
Abbey's procurement department has caused controversy by using an e-auction for a £22 million advertising deal for 2006.
The bank believes it is the first time an electronic bidding process has been used in this way.
"Lots of agency bids are done that way, but not media," said Keith Raeburn, marketing category buyer for Abbey.
The work includes off-line media planning and buying services for Abbey and Cahoot. It includes buying time and space for TV, radio, press, cinema advertising and more. From next January successful bidder Carat will take up the helm from incumbent supplier MindShare, which has held the contract since November 2003.
Coverage in the marketing press suggested media firms were unhappy about going through a reverse auction. Eight suppliers were in the long list, but three withdrew and one was left out following a review.
Martyn Rees is managing partner at MindShare, which went through all stages of the bid. He told SM
: "This whole process makes a commodity out of the service that agencies supply. That's clearly a very dangerous thing because it under values what they individually deliver in terms of systems, people and planning."
However, Abbey said the auction was the final stage of a seven-step process involving a team from purchasing and marketing.
In response to comments in the marketing press that web pitches are bad for business, Andrew Sayers, procurement manager, said: "From the perspective of Abbey procurement they are making a positive contribution to our bottom line and will continue to be used when appropriate. In terms of marketing services procurement we will continue to push the boundaries."
Abbey staff involved in the deal have been asked to present to the Incorporated Society of British Advertisers.