Big players must act responsibly, and find new ways of working, say ProcureCon speakers.
Payment models and the part played by online giants such as Facebook and Google dominated the discussion at ProcureCon Marketing in London in June.
Simon Tilden, global category director advertising at Diageo, said a big challenge facing marketing procurement is the remuneration framework.
The common model, where agencies are paid for time spent on an account, encourages them to put more people on projects and spend more time on them, he said.
He called for an industry group to be formed to come up with an algorithm for a “results-oriented remuneration policy”.
Delegates were told that a World Federation of Advertisers (WFA) survey showed 55% of clients felt the agency model was not working; three out of four were reviewing their structure and a similar proportion (74%) wanted agencies to be “true business partners”.
Tilden said: “When you have an agency that’s really embedded, they can get under the skin of where the brand needs to be.”
The issue of trust and transparency was also raised by speakers, especially when it comes to digital channels. David Wheldon, president of the WFA and chief marketing officer at RBS, accused Facebook and Google of “not using their power responsibly” and said advertisers needed to “stop falling in love with the shiny and new”.
Anthony Groves, group commercial director, global clients, at Dentsu Aegis Network, agreed trust was an issue and said traditional retailers were “under assault” from the online behemoths. He cited figures that Amazon had 44% of the e-commerce market in the US and accounted for 24% of retail growth.
Sky group marketing and digital procurement director Jane Dormer called on procurement professionals to help build trust and relationships between agencies and stakeholders. “Our marketing agencies need to be in front of senior people in the organisation and procurement’s role is to help them get there,” she said.
Wheldon also urged buyers to “think hard about what are the metrics: are they reliable, are they fair, is our brand safe? You need to ask [online platforms] some tougher questions.” When it comes to marketing data and metrics of success, Jo Smallbone, head of marketing procurement at Vodafone, said data should stay in-house to allow procurement to measure ROI.
Elsewhere at the conference, Richard Lloyd, head of identity at BT, said music branding was “one of the last frontiers in marketing”. Previously there was no consistent music in BT’s marketing. To fix this, the telecoms giant has opted for a single sourcing strategy, working with branding agency Cord to produce 54 audio tracks, based on the same musical theme, with more than 200 separate uses.
A key focus for BT’s marketing procurement team is tackling its tail spend, Paula O’Reilly, head of marketing procurement, told the conference. She said that while 80% of spend went to a core of 15 “strategic agencies” there were “hundreds” in the tail and tackling them was her priority.