05 October 2005
Procurement needs to change its cost-cutting mindset in order to face the challenges of modern business, M&C Saatchi UK group chairman Moray MacLennan has warned the profession.
Speaking at the CIPS marketing and purchasing conference in London, he told delegates: "I realise there are pressures to pursue cost-cutting. But I think it will result in the communications, advertising industry and marketing becoming a numbers game. Creativity squeezed out, talent dried-up and inventiveness gone."
He urged purchasers to look at the bigger picture, where creativity was needed more than ever to differentiate companies in an increasingly competitive market.
However, in another presentation, Alison Littley, global marketing procurement director at drinks firm Diageo, told delegates: "I genuinely believe price is the easiest thing to adjust."
She said purchasers should judge agency value on what their creative output does to improve a brand, image and the business as a whole. She added that creativity is the agencies' area of expertise, and it was not cost-effective to use them for writing presentations and translating advertising.
MacLennan's call comes as British Airways - M&C Saatchi's client of 21 years - is in the midst of assessing bids for its £60-million-a-year advertising contract. BA put the contract out to tender as part three-year plan to cut £300 million from its £4-billion-a-year procurement budget.
MacLennan said he believed purchasing helped agencies be more efficient and transparent but added that "the bulk of the job has been done" adding that purchasing can "get in the way".
"They say that great artists know when to stop painting. I am not saying stop altogether, just that there is another agenda that requires your attention," he said.
However, in some companies procurement is yet to influence marketing spend. But where it does get involved, some agencies can see the benefits.
Nicolas Mamier, managing director of advertising agency Scholz & Friends London, told SM: "We believe what lies behind performance is value and procurement helps to define that value and measure it.
"For agencies to survive in this competitive environment we need to measure that value for a client whether it's tangible or not."