Is procurement damaging the creative?

Kevin Law-Smith
Global account director, Fonterra: 

The aim of procurement is to optimise different relationships across clients’ business and get the best value for money. It is not only the agency but also client marketers who must engage procurement in the process to ensure this happens. 

That said, the rules should be such that the client is empowered to make creative decisions within previously agreed financial boundaries and procurement is used for their capabilities in valuation, negotiation and supplier relationships, and not in creativity or commercialisation. Procurement can add to the creative process by getting suppliers to offer up alternative solutions. For example, Absolut Vodka has been a master at harnessing the balance between creativity and good value-adding procurement which increases speed to market and utilises core competencies.

Nurhayati Abdullah
Vice-president, sales and marketing, DHL: 

I believe everything can be measured, including creative work. For example, clients can choose to remunerate on retainer-fee, combined with a clearly aligned job scope. During this process, procurement can definitely value-add to the overall negotiation process which certainly will benefit the client/company.

This will help to balance the creative strength of marketing with the negotiating strength of procurement to effectively deliver to the client. 

Once all parties involved are aligned, it’s very doable and would drive healthy competition amongst creative agencies to deliver their best work at the best cost.

Francesco Lagutaine
Chief marketing officer, Citibank: 

I ask, ‘If we don’t put a figure on creative, how would agencies like to be be paid?’

If the procurement role is played right, it can allow clients and creatives to get on with the business of making great ads.

I believe costs and budget negotiation should be the realm of the CFO and the procurement department. They are specialists and it keeps financial negotiations independent from the day-to-day client/agency relationship. It helps to ensure the last few meetings and discussions do not overly influence a fair remuneration. It allows teams that develop the work, to be solely focused on the work. 

We want our agency partners to make money. We want the compensation to be transparent. We need to know what we are paying for. 

Nothing should damage the creative process.

Dolly Chin
Director of marketing Asia-Pacific, Dell: 

Depends on how the entire process is managed. On the client side, the marketer needs to ensure procurement understands their needs and scope-of-work. Both sides should agree how agencies will be considered - based on qualitative and quantitative indicators - to strike a balance between creativity and value. 

It is hard to measure creativity as there is rarely an apple-to-apple comparison since each agency will have strengths and weaknesses. 

As a marketer, I prefer a one-stop shop, but that is next to impossible as no single agency can truly be such a thing.

Agencies should partner with others outside of their network to ensure they stay competitive. Procurement must be flexible towards allowing marketers to get the best - and this is rarely just in dollars and cents.

This article was first published in the December issue of Campaign Asia-Pacific.