Has procurement in agency-client relations peaked?
Fewer than a third of corporate execs say they have negotiated a
PR contract in which their company's procurement executive played a
role in the process, according to an exclusive study on procurement
conducted by PR News and the Counselors Academy.
This is a departure from just a year ago when, we were told,
there was more of a palpable sense that procurement execs were
encroaching on agency-client relations, asking all sorts of
questions about agencies' individual salaries and cultures.
Still, while it may not be as pervasive as some agencies feared,
procurement in PR is not going away. And the survey, which was
distributed earlier this month, shows widely divergent views on the
procurement process.
For instance, responses cut across the board in terms of how
much time corporate PR departments spent working through the
procurement, ranging from just a few days to six months. And while
some corporate PR execs are frustrated by a fixation on financials
among their procurement gods, other PR pros are peeved that
agencies, for the most part, are "not run like businesses."
Despite the obstacles, corporate PR execs say procurement saves
their departments money and helps them to get the agency that best
meets their specific needs, suggesting that procurement in PR --
while less pronounced these days -- is here to stay, particularly
for those agencies that strive to bag the big enchiladas.
1. During the last year, have you participated in the
negotiation of a public-relations contract in which the client's
procurement department was involved?
| Response Percent | Response Total | |
|---|---|---|
| Yes |
27.5%
|
36
|
| No |
72.5%
|
95
|
| Total Respondents: 131 | ||
2. Describe your role in that procurement process.
| Response Percent | Response Total | |
|---|---|---|
| Decision-maker |
47.6%
|
20
|
| Influencer |
35.7%
|
15
|
| Advisor |
14.3%
|
6
|
| Other |
2.4%
|
1
|
| Total Respondents: 42 | ||
3. How much time would you estimate that you and your
department's staff spent working through the procurement process?
(Sample)
- A ridiculously long time; about 6 months.
- Four workdays.
- Too much. Our procurement office doesn't understand the use of
PR agencies as it doesn't "fit" in any of their categories. It's
hard to explain why our department needs to keep an agency on
contract for crisis, even though nothing is happening at the
moment. As of eight weeks, we collectively spent 40 hours. - From start of discussions to appointment of successful
applicant takes anywhere from three weeks to four months.
Total Respondents: 41 4. Were you satisfied with how
the business was awarded?
| Response Percent | Response Total | |
|---|---|---|
| Yes |
86.8%
|
33
|
| No |
13.2%
|
5
|
| Total Respondents: 38 | ||
5. Did the procurement process have a positive effect on your
department in any of the following areas?
| Yes | No | Response Total | |
|---|---|---|---|
| Saved your department money |
54% (19)
|
46% (16)
|
35
|
| Helped you get the agency that could best meet your department's needs |
62% (23)
|
38% (14)
|
37
|
| Improved relationship with the agency selected |
44% (15)
|
56% (19)
|
34
|
| Total Respondents: 37 | |||
6. What were the stumbling blocks in the procurement process?
(Sample)
- The problem is that we spent a lot of time getting to
essentially the same place; we continued working with a vendor who
has provided us outstanding service for more than 10 years. If
lower and lower price points compromise their service offering or
business model, then we would eventually lose an outstanding
vendor. - Procurement tends to look at the financial impact only, which
is frustrating. Procurement staff screws up messages, and staff
members go on vacation without back-up. - Lack of understanding of PR services on procurement's part plus
a lack of understanding that cheaper is not always better - Being able to get time with my senior management team for input
on the final decision.
Total Respondents: 21
7. Which outside experts, if any, did you involve in the
procurement process?
| Response Percent | Response Total | |
|---|---|---|
| Legal |
27.8%
|
10
|
| Accounting |
19.4%
|
7
|
| Auditing |
2.8%
|
1
|
| Marketing |
36.1%
|
13
|
| Did not enlist the help of outside experts |
38.9%
|
14
|
| Other |
19.4%
|
7
|
| Total Respondents: 36 | ||
8. Which of these disciplines proved most helpful or had the
most workable solutions for improving the client/agency procurement
experience?
| Response Percent | Response Total | |
|---|---|---|
| Legal |
14.3%
|
5
|
| Accounting |
17.1%
|
6
|
| Auditing |
2.9%
|
1
|
| Marketing |
28.6%
|
10
|
| Did not enlist the help of outside experts |
42.9%
|
15
|
| Other |
14.3%
|
5
|
| Total Respondents: 35 | ||
9. In your opinion, what could help strengthen the client/agency
relationship during the procurement process? (Sample)
- We need to meet the real people who will service the account,
not just the "stars." We also want stability on an account team; we
choose people as much as we choose an agency's capabilities. - Have client ducks lined up before engaging agency bidders.
Going in half-cocked makes the client look stupid and gives the
agencies some leverage in the process. - Agencies have to come to grips that this is the wave of the
immediate future, and any "mystery" around the creative process
won't fly anymore. They must get clearer answers and metrics --
along with price transparency -- that enable better
comparisons. - Standards or guidelines for procurement departments that help
them understand how the client-agency relationship works.
Total Respondents: 50
10. Whether or not you have been through the procurement
process, what reasons would make you willing to go through
it?
| Response Percent | Response Total | |
|---|---|---|
| Save money |
46.4%
|
39
|
| Help prove PR's value to senior management |
54.8%
|
46
|
| Help make the agency/client relationship more of a partnership |
33.3%
|
28
|
| Good corporate governance |
47.6%
|
40
|
| Would not be willing to go through the process at all |
7.1%
|
6
|
| Total Respondents: 84 | ||
** Total respondents overall: 133
* Response rates vary per question