1.

Get the relationship right (jalin hubungan yang baik)

Any successful procurement professional will tell you that relationship management is essential in getting great
results from any category and they would be right. But if you dont get this right when buying marketing you
wont even achieve a mediocre output. (Beberapa ahli pengadaan professional pasti akan memberi saran
kepada kita bahwa mengelola hubungan yang baik merupakan hal yang sangat penting. Namun apabila kita
tidak melakukannya dengan baik maka hasil pencapaian organisasi kita tidak maksimal)
The relationship between a marketer and their agency partners can last a career and help both parties in
achieving success in their respective companies. Given that is the case, it is not surprising that marketers tend
to view procurement involvement with some suspicion.
Recognising the value of strong relationships is essential and focusing on the needs of the marketer is a
good way to start building bridges. Make an effort to understand the competitive landscape your
product/service plays in and invest time in researching the agency landscape so you can talk with some
knowledge when the opportunity presents itself. You are much more likely to build strong relationships if
you can empathise with your stakeholders challenges and knowing their market is a great starting
point.
Once you have built a relationship, its vital that you dont demolish it at the first hurdle. You will naturally have a
CPO who is keen to see delivery from the marketing spend, but dont put yourself in a position where you are
making promises without the full support of the senior marketers. If your business is in need of savings, its
important to have an open and honest conversation with the marketing leadership on how you
(collaboratively) plan to find and secure them this will help strengthen the relationship for the future
and build a good level of trust.
Dan Jeffries, owner, Jeffries Consulting

2. Be prepared to take a risk

In the wake of the economic downturn, many brands and marketers have found themselves paralysed by
fear. Whether it is fear of losing market share to a rival, of alienating consumers or even losing their job,
marketers have baulked at taking a risk.
Procurement should help create an environment where they can take risks. We all know no one got sacked for
buying IBM, but would you have banked on buying an Apple product not so long ago? Invest time in trying
new suppliers; look at agency start-ups; try different commercial principles; put a fee with an element of risk
and a gain share in place; or invest in technology to drive efficiencies.
On the other side of the supply chain, encourage innovation with the outputs the agencies are delivering for
your marketing clients. If agencies have skin in the game, they are potentially more likely to deliver great work.

The natural inclination for many agencies is to do formulaic work that they and the client know will perform,
instead of brave, potentially game-changing work with an element of risk associated to the fee payment.
The marketing procurement category is an exciting, interesting and wide-ranging category to work in and
procurement should encourage innovation and push the boundaries to achieve better results for all involved.
Tina Fegent, director, Tina Fegent Consulting

3. Know what you are buying. Is it the people? Or are you paying for what they create?
Having recently driven marketing procurement from the advertiser side, I know this dynamic far too well. I get
excited about the trends in procurement and the broader supply chain. The best procurement professionals
know marketing is an investment to maximise, not a cost to minimise.
To effectively measure quality which in marketing procurement is as important as assessing cost
procurement needs to know what problems they are trying to solve. Sourcing partners that deliver the best
value at the best price is what demonstrate procurements expertise and value-adding role. Unfortunately, the
greatest challenge facing marketing procurement people today is still that procurement never truly owns the
scope of work, nor the relationship of what they are tasked to buy. On behalf of their marketing colleagues, are
they buying Full-Time Equivalents, or paying for the creative output?
Choosing the right agency partner is a competitive advantage and the right team at the right investment can
dramatically improve strategic, creative and ROI. Once the relationship is established, sticking to the core
principles of output and outcome and ensuring real value in your compensation model will keep the
relationships healthy. By collaborating with your partners, you can determine the real metrics for efficiency and
the real measurements for success. After all, what matters is what should be measured. Procurement that is
committed to stable, high-performing partnerships stands to gain significant value, which surprisingly can
deliver against the procurement targets without always being at the lowest cost.
Brett Colbert, chief procurement officer, MDC Partners

4. Be interested in what you are buying

A typical concern marketers have when working with procurement for the first time is they will encounter the
archetypal nuts and bolts buyer someone who will apply the tactics from purchasing a highly standardised
and specified product where price is the main differentiator to marketing services.
I have found it helpful to show my interest in the marketers work, their challenges and objectives, rather than
diving straight into a discussion about suppliers, specifications, cost and savings. There are different ways of
doing this and you will want to adjust your approach to your specific situation.

You might ask: I noticed XYZ in our current marketing communication. What are you trying to achieve with this
and why? or Can you share with me what is important for the success of your work? What are you measured
against?. If you have a few follow-up questions up your sleeve and you carefully probe some more, you will
have gathered valuable information, demonstrated that you are interested in their topic and that you are willing
to learn and listen.
You have also, finally, opened the door to explore the topics close to your heart: How do your suppliers support
you in achieving your objectives?; How is the performance of your suppliers relative to your expectations?
and so on.
Most people like to talk about their work. If you show interest and demonstrate you want to understand it better
to help them, you are off to a good start.
Thomas Holzapfel, global category leader marketing, Deutsche Telekom

5. Make supplier communication open and transparent

The days of little or closed communication between supplier and buyer are, thankfully, almost over.
Procurement should recognise that for a supplier to be able to produce a real value for money proposal,
especially in the services arena, they need to have as much information as possible.
Time wasted on not sharing the business objectives, the concerns on delivery or the appetite for business risk,
mean suppliers have to price contingency. Of course, if you are procuring a common good and the spec is
detailed and clear, there is little need for more information. But complex consultancy, design, marketing,
construction and so on are all areas that are open to a subjective level of interpretation.
Make time at the start of a procurement project to talk to the potential supply base, get its input and expertise,
and allow suppliers to advise on the best approaches. This will enable you to include industry best practice,
understand recent innovations and to eliminate waste before the project goes live, enabling you to request the
right requirements and for bidders to deliver a proposal that you really want to read.
My communication mantra is transparency rather than opacity, clear and open, not guarded and, above all, be
honest.
Sarah Billson, director, Tickling the Trout

6. Make the brief clear, insightful and detailed

This is fundamental because an agency or service is only as good as you allow it to be. With this in mind, one
of the most significant aspects of the procurement process is to ensure that the brief is clear, insightful and
detailed.

The key benefits to this are the marketing team will be happy because the agency is more likely to present the
idea or solution they are looking for. And the agency will be happy because marketing is happy.
However, achieving this ideal goal requires spending a little more time up front and really delving into what
marketing are looking for, which may not be what they initially tell you. This isnt because they intend to
deliberately mislead, but sometimes they havent clearly considered what they are trying to achieve and how to
communicate that to the agency.
The buyers job may actually involve helping define the need and this is where it is a benefit if the procurement
manager is a marketing specialist because they can ask the right questions. Once the need has been defined
and a clear brief written, the job is half done. Its also important to ensure all key stakeholders have been
involved in the brief creation, to avoid disruption later in the process. In a pitching situation, it is now possible to
identify and approach the correct agencies. Without a clear brief, unsuitable agencies may be approached,
which wastes everyones time and money, and as we are constantly reminded in the press, pitching is
expensive! A good brief plus the right agencies equals a higher chance of success and making everyone
happy.
Hazel Cotton, strategic sourcing manager, Procurian

7. Think value over cost

In most cases, bigger companies with significant marketing spend will have already picked the lower-hanging
fruit of marketing procurement decoupled production, established digital asset management, consolidated
print buying and so on.
Unfortunately, that was the relatively easy stuff. When you venture into the intangible world of agency fees, the
waters can become treacherous I could easily think of 20 golden rules, let alone 10. But if I could only
advocate one, it is this: think about your outgoings in terms of their potential value, not their cost.
Often, too little attention is paid to the lower cost services, such as design, in favour of media investment. But a
good pack design for an FMCG company could increase sales by a double digit or even a triple digit
percentage if done well and for a small fraction of the equivalent required media investment.
Likewise, if your company is a big advertiser (spending 20 million on media and perhaps around 2 million in
creative agency fees), the value of the agency isnt 2 million because its work helps determine the ROI of the
20 million.
When it comes to buying advertising, media, direct marketing, design, digital and so on, it is essential to
remember the agencies role is to provide solutions to problems with infinite possible solutions. It stands to
reason these solutions also have highly variable value, effectiveness or ROI. The challenge for marketing
procurement is to help marketers ensure their agencies are suitably managed, remunerated and incentivised to
deliver their optimal value.

David Meikle, co-founder, Red Salt

8. Be careful what (and how) you measure

A Buddhist might argue that you are what you think, but when it comes to procurement, it is evident that you
become what you measure.
Lets agree that reducing costs is generally a desirable thing in business and procurement and supply chain
has a role to play in the proper management of cost.
However, the single minded pursuit by procurement of cost saving measures over any other more
sophisticated or relevant measure of performance has taken a heavy toll on the perception of, and attitudes
within, the procurement function. Being a pony with just that one trick is a risk, particularly in marketing
procurement where there is huge scope for the value of a marketing service being driven by intangible
elements such as creativity or insight.
Creating a baseline from which to measure a saving can be problematic, too. Take the situation where a piece
of agency work was bought last year for 100, budgeted this year at 103, quoted by the agency at 107 and
negotiated down by procurement to 101. We might ask the extent to which there has been a saving.
We might also ask who cares? If the outcome of the work was a disaster, with hindsight we agreed a great
piece of work that would have driven the business forward would have cost 130.
Richard Davis, experienced purchasing professional

9. Get to know the people before you buy the agency

The process of finding an agency can sometimes overwhelm some of the more subtle, but nonetheless
critically important, aspects of appointing a team of people which is what an agency is.
The people, what they are capable of as a team and the value they can deliver can become buried in a slew of
lengthy RFIs and RFPs covering the required company hygiene factors or the description of the agencys
capabilities on paper. It presents a rather one-dimensional view of the teams whose recommendations you are
about to invest significant sums of money behind.
I sometimes see experienced buyers being held at arms length throughout the pitch process by the marketing
team and then parachuted into the proceedings right at the very end to complete the commercial negotiations
with the selected or shortlisted partners. This sets the tone of your future relationship with your potential agency
partner from their perspective and removes the opportunity for you to provide a broader perspective on the
competing agencies to the brand team who are looking at everything through a marketing lens.
Your involvement with, and opinions on, how the respective agencies are performing as teams, beyond the
evaluation of their written submissions or proposals, help the agencies to see you and treat you as a key

member of the client team from the outset. It also gives you an opportunity to look underneath the bonnet of an
agency in a much more intuitive and revealing way.
Kerry Glazer, CEO, AAR

10. Be demanding but fair

Clients appoint marketing suppliers to deliver measurable, business-driving objectives. These will rightly be
ambitious, and demanding, but provided the remuneration strategy is right, the agency will work its hardest to
reach them.
The payment schedule should relate to clear delivery milestones that reflect the nature and duration of the task
and which should be jointly agreed. Marketing agencies are often making payments to third party suppliers
(talent, photographers, printers) on your behalf, so recognise your organisations scale versus your suppliers
and pay on time and within fair terms to allow them to do responsible business on your behalf. Poor terms will
ultimately lead to the supplier focusing its attention (and its best talent) on its better paying clients.
Occasionally, marketing suppliers offer to (or are required to) heavily discount their fee to secure business.
Treat this with caution. If a client is not profitable to the supplier, it will discreetly juggle its best talent to the
accounts where the profit lies.
Instead, pay a fair base fee to ensure the best team is committed to your business, combined with a wellstructured, motivating performance-related fee (PRF) element. PRF targets should be clear, within the agencys
influence, ambitious but attainable.
There should also be shared risk, offering an upside beyond the agencys regular margin on stretch targets to
reflect the fact the agency is risking margin on a downside scenario, too.
Lucinda Peniston-Baines, managing partner and co-founder, The Observatory International
- See more at: http://www.supplymanagement.com/analysis/features/2013/the-10-habits-of-highly-effectivemarketing-procurement-managers#sthash.iqt2uxZo.dpuf