Love Your Shark
By Eric Samuelson, Director - Production Procurement, Jack Morton Worldwide
Take this test: say the word “procurement” to a marketer. Kind of like shouting “shark” at the beach, right? People frantically try to escape what they fear will be a scary predator whose only goal is to reduce costs, or an RFP process they’re sure will be nothing more than a feeding frenzy for heartless bean counters.
But like the marine biologist who will tell you that sharks really are our friends, I am here to tell you that procurement is an invaluable part of the marketing ecosystem—and that we in the agency world need to do a better job of building procurement expertise in our own ranks. Yes, you heard me right: too few agencies themselves possess procurement know-how and the ability to “think like a shark.”
I would go further: in sectors like experiential and event marketing, with their heavy utilization of 3rd party vendors and materials, agencies that do not build procurement know-how in their operations are doing a disservice to their clients. I would also argue that clients should seek out agency partners that possess procurement expertise—for three simple reasons:
1. Math. Clients (and their procurement departments) spend a lot of time negotiating agency rates. Not surprising, but in the experiential and events sector, that means they focus 100% of their procurement analysis on only 20 to 40% of total spend. The other 60 to 80% of the spend is typically wrapped up in 3rd party costs—costs that agencies are entrusted to manage and maximize. What happens if the agency lacks procurement best practices and therefore the ability to maximize their clients’ 3rd party spend? Now imagine an agency that does indeed boast procurement skills—that has that shark culture. They are able to leverage preferred supplier relationships across the entire spectrum of their client work to maximize savings—sometimes very substantial savings. At Jack Morton, our procurement team has been able to secure double-digit savings through responsible negotiations with suppliers based on a variety of factors, including multi-year deals, ample time for discovery and planning, and sheer buying power.
2. Experiential procurement is different. Agencies with fully loaded production procurement departments have the expertise, knowledge and tools required to meet the unconventional and creative world of experiential and event marketing. Client procurement departments—however sophisticated and accomplished—are most often lacking in specific experience required to optimize 3rd party contracts in this unconventional creative arena. And even if the client organization has the specific procurement expertise needed for the experiential and event marketing world, it’s likely that their spend in the category is dwarfed by that of their agencies. A client’s best opportunity to maximize spend is to search out the agency with the biggest and best shark tank.
3. Sprechen Sie Procurement? Client-side marketers are not always eager or able to engage in the procurement dialogue. What better way to address this reality than to have an agency that can serve as a “translator” by having your procurement people talk to their procurement people? That frees up client-side marketers and their agency account teams to really focus on developing effective experiential programs based on strategic marketing insight and breakthrough creative.
Any marine biologist will tell you that the odds of being attacked by a shark are about one in 260 million. So we shouldn’t live in fear of procurement. Rather, we in the agency world should prepare ourselves to be the best partners we can be. We can build a highly developed “shark culture” with procurement expertise needed in our category. We can save our clients money. And we can help our clients be more successful within their organizations.
And if all else fails we can draw wisdom from Roy Scheider‘s classic scene in the movie Jaws where he deadpans, “We’re gonna need a bigger boat.”
Eric Samuelson is VP/Director of Production Procurement at Jack Morton.
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