Omnicom just added procurement officers to their media buying division. We looked for some notes on the web and found the following in the HP Communities blog below.
Procurement is the acquisition of goods and/or services at the best possible total cost of ownership, in the right quantity and quality, at the right time, in the right place and from the right source for the direct benefit or use of corporations or individuals, generally via a contract. As defined by Wikipedia.
Does Media Strategy and Buying Belong in Procurement?
By Scott Berg – Procurement Media Strategy HP Hewlett Packard Media Planning (2007)
That very question was asked of me in April of this year. And being a true marketing and media guy, I said “absolutely not!”
But after a few weeks of information gathering and analysis I changed my mind. And in June of this year, I and my media team officially moved to the Administration and Procurement area of HP. Let me take you through my thought process and why I believe it makes sense for some companies to transfer media into the procurement area.
1. Procurement is not a “dirty” word when viewed from the CEO and executive’s perspective. In fact, it shouldn’t be considered one at all! CEO’s and business groups have a strong focus on this area, which is no different at HP. Making a $1 act like $1.50 helps to reduce expenses and allow the overall company to be price competitive. So why not get stronger alignment with the CEO — show media success while reducing costs.
2. Vertical integration of media — from strategy, to execution, to metrics, cost savings and agency management.
3. Better alignment of the strategy to the resources required…. Said another way, we can ensure the agency resources required are adequate vs. the spend in the marketplace.
4. Isn’t this what good media people do anyway? I mean, we drive strategy and then work with the agency to ensure the company is getting the best possible price and or value.
5. Metrics and measurement — I’m telling you, the experts in the procurement have some pretty nifty tools which we’re using for metrics management.
Now I’m not saying the idea didn’t come with concern and some frank discussions among those for me were:
1. Media Strategy — you don’t get savings/value is you don’t have a strong media strategy and that had to remain.
2. Emerging Technology and Search — e.g. the future of media and marketing needed to be integrated and managed within the team.
3. Media Relationships — always critical in media, had to stay with the team as well.
4. Ensuring we didn’t consider all media to be a commodity but rather a sales and customer investment which drives sales.
5. Strong support and continued integration and alignment with business group priorities and requirements.
Thus far, our move to Procurement and Administration is working out fantastic. Our management understands the long term focus of the strategy while holding us accountable for savings, value and metrics.
I haven’t heard any other organization which has taken this different approach to media management. Let me know if you’re familiar with other companies and how they’re doing as well.
Should Hispanic Ad Agencies begin adding procurement officers to their media division?
What do you think?