It's here to stay!

In a recent article titled How to make friends and influence marketers, Procurement Leaders articulated as clearly as I have ever seen the fact that Marketing Procurement, as a discipline within the sourcing area is here to stay, and in fact likely to grow in importance.

A key fact is that marketing procurement has the goal of ensuring that every advertising dollar spent, is used in the most optimal way possible.

So targeting business efficiencies, which can be in the interests of both clients and agencies, is key to the task and surely this is where Procurement can deliver real value to the marketing environment.

The end game is not to reduce overall expenditure but to buy and receive the maximum service possible, at the best price possible.

It is interesting to see the other side of the argument in an article in Adage from the individual agency perspective, where driving down rates is seen as a destructive end in itself. I fully agree that once costs drop too low that the talent issue comes into play.

BUT...the question is who is responsible for setting the correct price? The buyer or the seller? The agency perspective seems always to be that it is the seller (client & procurement) who is at fault.

As we all know the "market" needs both parties to agree, so if the price asked for is too low then the seller has the right to go elsewhere. I suspect that till this happens the natural forces of competion will continue to exact their toll on agency margins.

Author: Richard Benyon (Decideware)