Rules for Cooperation with Agencies Require Deep Changes

Purchasing departments are increasingly taking part in the process of ordering marketing services. Their participation in this process often entails tough price negotiations. The new role of these departments means that new rules for cooperation with agencies and marketing communication service providers are needed. This is the purpose of Dialog, established by the industry, within which experienced experts and specialists will develop a catalogue of good tendering practices.

As Paweł Tyszkiewicz, representative of the management board of the SAR Marketing Communication Association, notes, a new player has appeared in the industry in recent years. Until now, agency services were usually bought by marketing departments, which most companies have in their structure. This is changing the way services are purchased.

– For many years, the only recipient and buyer of marketing services was the company's marketing department. After the financial crisis, purchasing departments, which previously mainly bought simple services, also began buying ideas. Most of the invitations to talks that we sent to companies in recent years received a response that came no longer from the marketing department, but from the purchasing department. This is the fundamental change that we feel today. We see that the actor on the other side has changed – Paweł Tyszkiewicz tells the Newseria Biznes news agency.

The representative of the Marketing Communication Association notes that the new purchasing departments have a huge need to deepen their knowledge and learn industry practices.

– They also report that they would like to be included in the purchasing process much earlier, rather than invited only at the very end, when the price negotiation stage is already underway, because that changes the entire situation – adds Paweł Tyszkiewicz.

– Purchasing departments ask practical questions that we ourselves had not asked for a long time. Thanks to this, we clarify certain things, which means that our operating costs may fall or we may undertake their restructuring. The approach to what we want to achieve from the substantive side is also changing – says Paweł Kastory, president of the management board of DDB&tribal and the group of companies belonging to it.

One of the key areas is the financing aspect of marketing communication projects. Because advertisers want to pay for them as late as possible, the burden of financing for several months is borne by the marketing agency, which often has to take out a bank loan for this purpose.

– For an agency to finance a project worth several million over several months, it must go to the bank and buy that money. Until now, agencies did not show advertisers how much they pay banks and how much their money costs. This cost is later passed on to us, the advertisers. Seeing this cost, we can carry out analyses: do we want to pay later, but let the bank earn? Or will we pay earlier, but a bit less? Money costs us less than creative agencies, which gain nothing from it – explains Andrzej Zawistowski, member of the management board of the Polish Association of Logistics and Purchasing Managers (PSML).

DDB&tribal president Paweł Kastory emphasises the need to optimise cooperation on both sides.

The purchasing department, acting as an intermediary between the company and marketing communication service providers, can play a major role in this.

– We never talked with the marketing department about how we are organised, how the client is organised and how this entire purchasing process runs, so as to achieve the best results at the lowest cost. The purchasing department asks these questions of both sides. And then both sides are obliged to think about them and offer the best possible methods of cooperation – says Paweł Kastory.

– The beneficiary of optimisation is each of the parties. It does not concern only the purchasing department, marketing or the agency alone. In fact, all three parties participating in the purchasing process or in the tender derive tangible benefits from it. The shorter this process is and the more predictable its subsequent steps are, the greater the benefit for all parties. From a purchasing point of view, we need processes in purchasing departments that will end with the successful contracting of a very good agency – adds Małgorzata Olczak, manager for the Central and Eastern Europe market at GlaxoSmithKline Consumer Healthcare.

Industry Dialogue is intended to help develop good practices in multi-party cooperation – it is a project established by representatives of agencies and advertisers that is to develop the best tendering practices in marketing purchasing. It includes a series of meetings and workshops held with the participation of the most experienced practitioners and experts from both sides of this process. The aim of the Dialogue is also to create a catalogue of good practices in relation to each advertising category, such as PR communication, branding, events, media buying or TV production.

– Industry Dialogue is a kind of round table where we all sit on the same side and talk to each other. Not during a tender or negotiations, but in the form of a normal dialogue, where everyone can say what problems they have and what elements they see for improvement, both on their own side and on the advertiser's side – says Andrzej Zawistowski.