Trust still lacking between procurement and agencies

A lack of trust between procurement and marketing agencies is part of the fallout from a damning report that accused agencies of ripping off clients.

The report from the Association of National Advertisers (ANA), a US organisation representing agency clients, alleged last year there was widespread use of non-transparent practices by agencies in the US market.

These included the use of rebates deals between agencies and media companies that would allow the agencies to profit without passing any savings back to their client. The ANA said there was evidence of agencies directing clients to certain media outlets regardless of whether this was in the client’s interest.

The report did not name names and was criticised at the time by the American Association of Advertising Agencies.

Speaking at the Procurecon Marketing conference on Tuesday, Nick Baughan, CEO of agency Maxus UK, said at the time the report did not come as a surprise. Since then, he said, agencies and their clients have started to work to close the gap. “I think as a category we’ve been reasonably vocal at explaining how we [create value] and some of the methodology and some of the complexity in the conversations alongside our advertising teams,” he said.

But while there has been some upskilling of procurement professionals with dedicated media training, there was still a lack of investment, “and that has resulted in a real imbalance in the level of conversation,” said Baughan.

Céline Biette-Danielli, principal category manager for marketing agencies at Vodaphone, echoed Baughan’s call for upskilling procurement teams. “Really upskill the procurement people, to really understand the value of that and where we want to get to. If it’s just cost, and that’s creating all this mess, what’s the point?” she said.

During a discussion of trust between procurement and agencies, Biette-Danielli said trust between advertiser [client] and agency stemmed from two areas, the transactional and the chemistry of the relationship. Procurement needed the transparency and ability to deep dive into its partnerships, she said, but also some way to measure trust and other aspects of the relationship. 

When relationships do break down, Biette-Danielli said communication is key to understanding why. “Are we pushing too hard? You know we’re [procurement] really cost focused, should we focus more on values? Are the networks of agencies asking for too much… and then what about the way of working and how we could optimise that together to get better transparency?”

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