Marketing Procurement

Opinion: Quote Unquote – How agencies get creative with choosing suppliers

‘Incentives’

…just how certain can you be that no inventive incentives are involved, in the form of ‘loyalty’ rewards, under-the-radar rebates and mutual scratch-my-backs?

Read my lips: ‘I will always obtain multiple quotations for any production or post-production work done on behalf of your brand.’ Easy to say, of course, but does your agency apply this rule rigorously? Here we look at some of the pitfalls and prudent practices associated with the supplier selection process used by your creative agencies.

The marketing procurement rulebook is unequivocal: whenever significant sums of a brand’s budget are being spent, get multiple quotes in. Even — or especially — if the money is being disbursed one step removed, through your suppliers. Best practice dictates that you’re closely involved in the selection process and have a formal approval mechanism for supplier selection.

But hello, this is real life! It’s a crowded place: time is short, action lists are long, deadlines are tight — and anyway, surely I can trust my creative agencies to do the right thing by their clients?

Erm… that’s your call. If you’ve been lucky or shrewd enough to inherit or choose creative agencies who will consistently put their clients’ interests above their own, even in the thick of marketing’s notorious ‘fog of war’ — briefings, campaigns, presentations, deliverables, deadlines — then… well, even here, our mantra is ‘trust, but verify.’ Shouldn’t take long to inspect a tightly-run ship, should it?

A game of musical office-chairs

If you don’t quite have that comfortable sense that your creative agencies have your back covered — after all, they do face their own internal issues and challenges — then it pays to be aware of the kind of thing marketing compliance auditors like ourselves routinely encounter when we do get sent in, perhaps as a result of an exit audit.

Also by Erika Blomerus: Taming alligators: Creative Agency Exit Audits

The creative industry in most marketing territories tends to be highly concentrated, a tight-knit coterie of creative and production services personnel who flip their employment between agencies and production houses quite frequently. It’s a high-staff-turnover industry: a couple of years on the agency side of the desk, a couple of years on the supplier side, is a commonplace theme.

This game of musical office-chairs naturally gives rise to close friendships, collaborations and fortuitous role-swaps, enough to make it tricky to ensure proper arms-length dealings when it comes to sourcing and placing creative, production and post-production work.

Without a well-drafted contract and faithfully observed quoting processes, it becomes difficult to determine whether the suppliers working on your account have been chosen for their connections with agency personnel, or whether they’re indeed the right people offering the best value for your particular project. ‘Look after your buddies, not the accounts fuddy-duddies’…  just how certain can you be that no inventive incentives are involved, in the form of ‘loyalty’ rewards, under-the-radar rebates and mutual scratch-my-backs?

And before you kick back at the mere suggestion that such ways of doing business might still even exist, we can assure you that we’ve personally uncovered blunt-instrument arrangements like these as well as more subtle tactics, such as favoured suppliers picking up agency costs for things like awards entry fees. Hey, we all have expenses!

Take care of the process, and the pounds will take care of themselves

Not that we see our role as nit-picking or making an auditing mountain out of an agency molehill to justify our fee. Indeed, quite the opposite: we know that client-agency relationships are hugely special, valuable and influential. A big part of our skillset is earning the trust and the respect of your agencies and identifying ways of improving levels of confidence between the brand and the brand-builders.

Well-run creative agencies, of course, are too busy excelling at what they do to mess about with risky ruses and silly shenanigans. When we go in to agencies like these then, it often comes as a surprise to everybody when we identify a weak link in an otherwise robust supplier management system — and often, we’re able to demonstrate that you, the client, has inadvertently contributed to the problem. For example, when you ask an agency to do something impossibly quickly, getting three quotes in on every big spend simply goes out the window. And where an inch is given, as we all know, a yard will soon be taken.

Unfortunately, as we all ruefully acknowledge, ‘do-it-yesterday’ seems to be a standard timescale in the world of marketing. One way of addressing that reality and protecting both agency and client is to initiate a formal tendering process to select preferred suppliers (particularly for post-production); this can eliminate the need to RFQ every job. By doing your due diligence up front, you end up with a roster of known quantities, which helps grease the skids without breaking due process.

Another way of achieving that improvement in responsiveness is to enshrine a process where, under specified conditions, your agencies are formally authorised to engage suppliers without first obtaining multiple quotes. Yes, that opens up the risk that you might not get the best value for money in those instances — but it does mean that these are exceptions rather than the rule.

Of course, there are other approaches and rule-sets that might better fit your particular brand and creative agency relationships.

About the author

Erika Blomerus is Global Audit Manager at Financial Progression