July 7, 2003 — Reasons for Purchasing’s Rise in Agency Reviews Cited in Agencyfinder Report.
Agencyfinder releases executive report defining issues surrounding the increase of procurement department activity in ad agency and PR account reviews.
Richmond, VA – Agencyfinder, the most comprehensive advertising & pr agency search/selection system on the Internet, released its first Special Executive Report today entitled Why Purchasing Stalks Marketing for Agency Control. The report identifies several key issues surrounding the growing influence of purchasing departments on the agency selection process and provides some insights as to how agencies and clients can adapt.
Agencyfinder’s founder, Chuck Meyst, explains why the company went to the effort of researching and publishing on this topic: “Late last Fall, we started to see a fundamental change in who was using our service from the client side. Since that time (over the last 9 months), we’ve seen a ten-fold increase in searches from purchasing and procurement managers on behalf of their employers and brands. We started to wonder why, did our homework and now present the findings in this report.”
The report cites financial pressures and a greater desire for accountability in the marketing spend as two inter-related issues behind the growing influence of purchasing in reviews and compensation negotiations. “But there are other factors, too,” Meyst continues. “Those of us in the advertising, PR and related fields haven’t done a very good job of building trust in how we do business or how we charge for the value we bring.”
In conversations with Al Ries, author of The Fall of Advertising & The Rise of PR , Ries underscores the point that chemistry alone can’t win accounts anymore and that advertising agencies in particular have done a pretty miserable job of understanding that fact. “You have to have the mindset of the purchasing agent,” Mr. Ries says in the report. “Purchasing people deal in hard values; data, especially prices, terms, guarantees, etc. Advertising people deal in soft values such as creativity which can’t be measured.”
But what are the implications of this trend? The Agencyfinder report sheds light on the impact purchasing and procurement managers have had on the agency search process to-date. In the past year, clients have stepped over the unspoken boundaries of employee compensation and bottom line profitability with their agencies. One client identified in the report even asked pitching agencies for information on how they conducted criminal background checks on their employees.
Mr. Meyst estimates that approximately 7 to 10% of the USA’s more accomplished ad agencies and PR firms are registered with Agencyfinder. “With over 4,000 top-ranked agency offices in the database, we’re able to match just about any sized client with the right kind of agency.” The service has been put to the test over the years, conducting over 3,300 searches since March 1998. “Most of our volume in client searches is in the small-to-medium range,” explains Meyst, “although we’ve seen more than our fair share of larger searches over $25 million. Our largest to date was over $100 million.”
According to Mr. Meyst, “It’s accounts like those – some that are too small to immediately attract the attention of a mega-agency and some too large to be awarded based on a personal friendship – that are the most difficult to satisfy. The Internet and off-line process we provide via Agencyfinder opens the door to new agencies and levels the playing field at the same time.”
Brand Central Station’s Mr. Bawden agrees, “One of the reasons my partners and I have seen the success we have with our Agencyfinder
registrations is that clients understand the power and efficiency of finding the right-sized agency for the right-sized problem. Agencyfinder does that in a way that we wind up talking to and pitching work that’s a good fit – and that is how clients save money in the long run.”
The Agencyfinder Special Executive Report: Why Purchasing Stalks Marketing for Agency Control is available at: www.agencyfinder.com/Special-Executive-Report.pdf
Agencyfinder.com, a service of Business Partnering International, Ltd, was founded in February, 1997, and is the most comprehensive database of advertising and public relations agencies on the Internet today. Intended for use by companies seeking agency support for projects, campaigns or long-term relationships, the company has executed over 3,300 searches in the past five years. Searching is free to marketers and supported with complimentary search consulting advice (telephone and on-site consultations) provided by the executive staff. Advertising agencies and public relations firms pay an annual fee to be part of the online database and to participate in searches.