Commentary
Beware The Bottom-Feeders: When Procurement Turns Thinkers Into Executors
- by January 8, 2010
What's astounding about the rise of procurement in marketing services is the degree to which they place so little value on the power and cultural currency of Big Ideas. Witness 2009. Having already rolled over the media services operations and account service functions being provided by their agency partners -- asking for everything from money back to blended hourly rates that can barely afford a 50K FTE -- the question is, do they really think they've won? What did they win? Another half of an FTE? Or a mid-level media supervisor holding down the responsibilities of an account director? It makes this creative wonder if they know the difference between our thinkers and our executors.
But if it's executors they want, it's executors they shall have. Until they realize, as few smart CMOs have, that the strategic thinking and creative business is no place for Six Sigma. It's where ideas are born, nurtured, shepherded and communicated until the customer starts talking -- and buying.
As an industry, who among us will be brave enough to stand up and clarify that we are ultimately in the IDEA business - not just the billings tonnage and stock price business? In this climate of procurement driviving poetry in motion, it looks bleak for ultimate value of ideas.
As long as topline revenue growth drives holding company stock prices up, public agencies will be forced to negotiate the value of their people and their ideas down to ensure the tonnage of dollars continues to flow.
Perhaps we put ourselves here. As buy/sell technology platforms have crossed the chasm from Silicon Valley, purportedly making media planning and buying more efficient, agencies and digital media networks have become seduced by scale rather than by skill. The embracing of these platforms of scale under the guise of efficiency ultimately leads to only one place -- the commoditization of media inventory on the sell side, and, with procurement officers running wild through the halls of our biggest spenders -- the devaluation of strategic thinking and ideas on the buy-side.
Happy 2010. The year we make Contract?
You tell em Alan! What passes for a creative idea these days is an agency going crazy and rfp'ing the top 15 sites in a comscore category rather than just the top 10. Let's hope we can move the ball forward some this year.
Alan - What a great post. I tell my sales staff to ask a few key questions and look for a few key responses. If the responses are in the 'I don't get it' category then we move on within minutes. If the response is in the 'WOW, this is huge' category, then we give those folks tremendous time and tremendous value. Always drive to discussion to value. If I do not create value for you then I shouldn't get the assignment. If you end up talking only about dollars, then you're dead.
It is a little like the guy who puts their video on YouTube and wants to know why it didn't go viral. Don't think viral, think value add and engagement.
Alan, I get the frustration. You don't want creativity crushed in favor of the lowest CPM. But while Ad agencies are in the "idea" business. The purpose of those ideas is to *sell something* It's not for the sake of art.
With pressure to prove the value of investment, I'd urge you to be vigilant in identifying measurement tools proving that the big idea gives a brand a better ROI than the cheapo buy. (And ROI doesn't necessarily mean more sales, it could be higher awareness, recall or intent to buy, etc.). This way, you can demonstrate *why* the big idea is truly a better choice and you won't be so frustrated.
I know it's not easy but hopefully it's food for thought.
Like I tell my kids when they don't respond when I call them - "it doesn't matter what you say, it matters what I hear".
Agencies are calling out that they are important, their ideas are valuable, they are worth big bucks. But this increasingly does not matter, that agency message is NOT being heard by the client community.
Why? I think many agencies, many of the ideas, and much of whole creative ecosystem is aging. As ANYTHING ages, it tends more towards commoditized behavior. A big part of commodity behavior is more of an emphasis on the object in question being a "need" and less emphasis on the object being a "want".
When a buyer's mindset changes from "wanting" something to "needing" something, the seller better pay attention, because this is a huge crossroads. It is the inflection point between a unique exotic specialty from Crutchfield's and the dreaded standard expected commodity from Walmart.
The clients are getting used to the schtick that agencies are offering up. Nothing is new, unique, or original any more. As the lustre wears off of the agency product, the client's reception of that product changes and pretty soon, Harold from accounting gets to choose the new AOR because the marketing staff has lost interest.
This is where innovation, invention, R&D, and evolution become critical. Something new has to come along to recapture the interest of the client and reset the commodity back to a specialty.
mobile?, augmented reality? events? something old is new again?
JB
Thanks for sharing with us some of your worst fears about the ascension of procurement in marketing services at the cost of Big Ideas, but let's not shoot the Silicon Valley for bringing us more of the dancing picks and shovels. Yes, most of us hate being dominated, bound, and gagged by that business model, but that's the only type of innovation that has drawn execution play dollars from venture capital for several years running, and to make matters a little more grim, everyone agrees that the "smart" money will continue to chase the dancing picks and shovels.
Our only immunity from commoditization of media inventory on the sell side is to be more clever in how we create Big Ideas and Awesome Strategies on the buy side. To stand out by the strength of our thinking, even if we have to pull it together on a shoestring for now.
But thanks again for pointing out what hideous straits we've washed ashore on... as if it wasn't already abundantly excruciating. ... and BTW, what does any of this have to with the MediaPost VideoInsider?
kind regards,
Rich
Alan, thanks for the great article. I have been in the media buying/sales business in NYC for 20+ years. Ideas were always the key to large brand success both on TV and the Web. Developing Big Ideas around a marketing plan was the process by which a TV-Web sales team/media buying agency broke through the Clutter.
I sat down with a very well known digital client during the holidays and discussed procurement and the media sales/buying process. He has 20 years of client side media experience and cannot believe the changes that are taking place at his Major WW Brand. Digital Media has become a commodity which will most likely never change.
Data, Metrics & ROI have put a choke hold on Ideas & Creativity. CrossMedia TV-Web-Mobile media sponsorships are becoming a dinosaur. Marketers need to wake up and understand that Consumers are continually being bombarded with CLUTTER in all forms of digital media.
Ideas & Creativity will break through the CLUTTER!!!
Search is Search Branding is Branding
Best, JB
jburnette@optonline.net
Alan –
Thank you for taking a swipe at this one and for kicking off an interesting thread.
Adopting performance-based compensation models is one way to reverse the downward trend. For more on this see:
http://pm2pm.blogspot.com/2009/01/advertising-agency-compensation.html
The damaging, cost-focused approach to improving ROI for clients has been taking its toll over the years. Like the obsession with lower CPM as a means of measuring success, this mindset is making true marketing success harder and harder to achieve. On the creative side, the rise in outsourcing which often (not always) diminishes quality, is another symptom of this problem.
Clearly the preferable way to generate positive ROI is found in programs that (over)perform against agreed upon measures of success rather than those that just fit into a diminishing budget.
While adopting performance-based compensation is one way to align agencies and clients to find win/win situations. There is a level of collaboration, competence and transparency required that is itself hard to achieve.