[Adforum Worldwide Summit] Value and costs

Day five of the Adforum CEO Summit in NYC started taking about value and ended talking about costs. It demonstrates the huge gap that still exists between procurement, marketers and agencies, if not on an intellectual level, certainly an emotional one.

The morning was meeting with agencies Creative Realities International and Arnold. Though as one of the new generation, I am not sure CRI would consider itself an agency, with an approach to using design and technology to create compelling customer experiences. This is in contract to Arnold, an agency of more than more than six decades' experience, which creates great work that works. Both talk different paths and approaches to the same destination, delivering results and creating value for their clients.

In the afternoon the focus turned to the increasing role of procurement in the marketing category. Usually when people think of procurement, the focus is on cost reduction, and this is certainly a key focus with a recent ANA Survey showing that 68% of procurement respondents report to finance, accounting, sourcing or supply chain management.

The Good, the Bad and the Ugly Report also showed that, while 73% of marketers and 74% of agencies felt that procurement met or exceeded expectations in cost savings, only 54% of marketers and 23% of agencies felt the same about their role in process improvement.

With regards to seeing marketing as an expense to be reduced or an investment to be optimised, while 97% of procurement believe they see marketing and an investment, only 56% of marketers and only 26% of agencies agree with them.

The issue is not the role of procurement in marketing, as that is a given. The issue is the way all parties work together. Earlier this week the comment was made at WPP that efficiency and effectiveness should go hand in hand. One cannot exist without the other. Procurement is focused on delivering efficiency and agencies are focused on effectiveness. In between are the marketers who will never want efficiency without effectiveness and that is where the balance lies.

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