Why Purchasing Stalks Marketing for Agency Control
Flash Report – July 23, 2003
This BUSINESS DEVELOPMENT information is for agencyfinder.com Certified Agencies, Agency New Business Executives and agency subscribers. We communicate with registered member-agencies using e-mail.
CONTENTS:
1. Why Purchasing Stalks Marketing for Agency Control
2. Better Us Than You – An Author’s Tale
3. An Agency Secret Weapon – Read All About It
4. South Africa (Far South Africa) Calling
5. An Olympic Athlete Update
WHY PURCHASING STALKS MARKETING FOR AGENCY CONTROL
You might recall; if not you can check, but back in our February 4th Flash Report we ran a piece entitled “Procurement Departments and Ad Agencies.” Our interest had been piqued, first by the increasing volume of searches by or involving purchasing (procurement) folk, and then at the January 23rd ANA Agency Relationship Forum at the New York Plaza. We saw what no one else was reporting – the real threat to those holding the
marketing reins on the client-side. Our Press Release follows. We commissioned a Special Executive Report to examine those issues at: https://www.agencyfinder.com/Special-Executive-Report.pdf and posted it at our URL as well.
“Reasons for Purchasing’s Rise in Agency Reviews Cited in Agencyfinder Report.”
Agencyfinder releases executive report defining issues surrounding the increase of procurement department activity in ad agency and PR account reviews.
July 7, 2003 – Richmond, VA – Agencyfinder, the most comprehensive advertising & pr agency search/selection system on the Internet, released its first Special Executive Report today entitled “Why Purchasing Stalks Marketing for Agency Control.” The report identifies several key issues surrounding the growing influence of purchasing departments on the agency selection process and provides some insights as to how agencies and clients can adapt.
Agencyfinder’s founder, Chuck Meyst, explains why the company went to the effort of researching and publishing on this topic: “Late last Fall, we started to see a fundamental change in who was using our service from the client side. Since that time (over the last 9 months), we’ve seen a ten-fold increase in searches from purchasing and procurement managers on behalf of their employers and brands. We started to wonder why, did our homework and now present the findings in this report.”
The report cites financial pressures and a greater desire for accountability in the marketing spend as two inter-related issues behind the growing influence of purchasing in reviews and ompensation negotiations. “But there are other factors, too,” Meyst continues. “Those of us in the advertising, PR and related fields haven’t done a very good job of building trust in how we do business or how we charge for the value we bring.”
In conversations with Al Ries, author of The Fall of Advertising & The Rise of PR, Ries underscores the point that chemistry alone can’t win accounts anymore and that advertising agencies in particular have done a pretty miserable job of understanding that fact. “You have to have the mindset of the purchasing agent,” Mr. Ries says in the report. “Purchasing people deal in hard values; data, especially prices, terms, guarantees, etc. Advertising people deal in soft values such as creativity which can’t be measured.”
But what are the implications of this trend? The Agencyfinder report sheds light on the impact purchasing and procurement managers have had on the agency search process to-date. In the past year, clients have stepped over the unspoken boundaries of employee compensation and bottom line profitability with their agencies. One client identified in the report even asked pitching agencies for information on how they conducted criminal background checks on their employees.
One marketing consultant given an advance copy of the report raised a concern not directly addressed in the publication. “My greatest concern about a greater role for corporate purchasing departments has to do with their instinctive reaction to consolidate accounts and try to create economies of scale,” says Mike Bawden, president and CEO of Brand Central Station. “The problem with that idea is that in many cases, the economies of scale don’t exist – at least not to the degree expected by a purchasing manager who is used to buying more commoditized products.”
Mr. Meyst estimates that approximately 7 to 10% of the USA’s more accomplished ad agencies and PR firms are registered with Agencyfinder. “With over 4,000 top-ranked agency offices in the database, we’re able to match just about any sized client with the right kind of agency.” The service has been put to the test over the years, conducting over 3,300 searches since March 1998. “Most of our volume in client searches is in the small-to-medium range,” explains Meyst, “although we’ve seen more than our fair share of larger searches over $25 million. Our largest to date was over $100 million.”
According to Mr. Meyst, “It’s accounts like those – some that are too small to immediately attract the attention of a mega-agency and some too large to be awarded based on a personal friendship – that are the most difficult to satisfy. The Internet and off-line process we provide via Agencyfinder opens the door to new agencies and levels the playing field at the same time.”
Brand Central Station’s Mr. Bawden agrees, “One of the reasons my partners and I have seen the success we have with our Agencyfinder registrations is that clients understand the power and efficiency of finding the right-sized agency for the right-sized problem. Agencyfinder does that in a way that we wind up talking to and pitching work that’s a good fit – and that is how clients save money in the long run.”
The Agencyfinder Special Executive Report: “Why Purchasing Stalks Marketing for Agency Control” is available as a PDF attachment, or by visiting the Agencyfinder website: www.agencyfinder.com.
Agencyfinder.com, a service of Business Partnering International, Ltd, was founded in February 1997, and is the most comprehensive database of advertising and public relations agencies on the Internet today. Intended for use by companies seeking agency support for projects, campaigns or long-term relationships, the company has executed over 3,300 searches in the past five years. Searching is free to marketers and supported with complimentary search consulting advice (telephone consultations) provided by the executive staff. Advertising agencies and public relations firms pay an annual fee to be part of the online database and to participate in searches.
BETTER US THAN YOU – AN AUTHOR’S TALE
Clients – we love ’em. But some can be challenging, and frankly, we think you want us to screen them so you never have to deal with certain “kinds.” I’ve excerpted some e-mail exchanges from a recent search by a “famous fictional romance author” looking for a publicist to help her sell books. AF: “We’ve got some agency choices for you in the Denver area, some are large, others a bit smaller. What they can do for a client depends in part on budget. What have you allocated for an annual (or project) promotional budget?”
Author: “The deal is – I am hoping to grow ‘with’ an agency. The more revenue they help me generate, the more revenue their firm gets, know what I mean?”
AF: “We can appreciate that. However, most agencies are not willing to work on a contingent basis. That’s what an ‘agent’ does. What might you be willing to pay as a retainer to someone to start working for you? As in – $3,000, 6,000, 10,000? Pick a number and then we can make some contacts. And regarding your mention of payment for success, what would you be prepared to pay a publicist as a percent of book sales?”
Author: “I am not opposed to paying a retainer. However, I’m looking for an aggressive ‘partner. The more books they sell, the better the commission. Per book and cost down to the penny is confidential and can be negotiated between myself and the company. If none of your agencies want that kind of deal, I will shop locally myself.
AF: “We’d love to help, but when a client won’t share preliminary information with us, we have withdraw our offer of service.”
Agencies – is this what you expect of us? Or would you want to meet a client like this?
AN AGENCY SECRET WEAPON – READ ALL ABOUT IT
Glenn Sagon, President at SPG/Sagon-Phior in Studio City, CA is a long-standing agencyfinder agency and friend, and called back in April to tell us about Vision Mixer Films in Pacific Palisades, CA. Glenn and others out California way have used George Bloom and his firm often, particularly when time is tight, budgets are close, and the work has to be first class. You and your clients might appreciate what they can do. I was particularly impressed, and offered to introduce him to you as soon as he had a rockn’ site. It’s ready – check it out at: www.Visionmixerfilms.com.
SOUTH AFRICA (FAR SOUTH AFRICA) CALLING
Miles and hours away, about as far south as one wants to go in South Africa (little land exists beyond) lies an idyllic vacation area. That’s where abstract artist Tay Dall, known for emotionally charged oil paintings on unusual surfaces like old doors and shutters performs her craft. “Culture presents us with icons of idealised states of being,” she says. “These are, however, extremely transitory. I therefore physically alter the surface of everything I paint, allowing my voice to come through. “My works express many feelings through line and colour. I hope the resulting visual atmosphere will touch viewers emotionally.”
Tay, a 1.8 metre live-wire, returned to South Africa in 1995, after living in Los Angeles, California for eleven years, where she studied, worked and exhibited her work in numerous galleries. She is married to American entrepreneur Ben Chowney and has two children Zoë and Tal. Her home and studio are located along a nature reserve near the beautiful seaside village of Hermanus, Western Cape.
Tay’s work is fresh and quite different. She also happens to be my daughter-in-law. Her site, and comments by my wife’s son Benjamin are entertaining. You or your clients might find an opportunity to incorporate her work. Enjoy. http://www.taydall.com
AN OLYMPIC UPDATE
In last month’s Flash Report, we mentioned a famous female Olympian and her mission to
package herself for the 2006 Italian winter Olympics. I’m pleased to report that we and she landed two most enthusiastic and assertive “publicists” that are bound and determined to secure sponsors for her Gold, Silver and Bronze options – and we hope to have full details within the next month or so. Her identity and the agencies remain top secret until we have breaking news. But they are to be commended for coming forward!
In the meantime, and to supplement what those publicists are already doing, IF your firm might be interested in getting an inside track (at a significantly reduced fee) and participating in the Italian Winter Olympics with a female athlete that: 1. Has already received outstanding publicity for her skill, daring, accomplishments and miracles, 2. Is an outstanding spokesperson and would be for any company with products and services for the female consumer, 3. Will provide an ongoing and compelling publicity angle for her sponsors each season and year-long leading to those games – then give me a call and I’ll put you in touch with her “people.”
Thanks for taking time to read this; we look forward to getting you face-to-face with a great prospect.
Sincerely,
Charles G. Meyst, Chairman/CEO
Business Partnering International, Ltd.
Vantage Place, 4327 Cox Road
Glen Allen, Virginia 23060 USA
