Alan Krinsky Associates
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Wednesday, August 17th, 2011
This is our fifth tip in our services: How to Engage Procurement to Become an Agency Advocate

As part of the negotiation, establish performance standards and ask for quarterly reviews against those standards. Despite the best of intentions and the most thorough contracts, agency people are still at the mercy of demanding client staff that may not have been party to the negotiation or even seen the contract. They may ask for more creative versions or fail to provide timely approvals or add additional layers that require more management time for the agency. In these cases, procurement can actually be a friend and champion living within the contract. Therefore, it is critical to keep procurement in the loop after the contract is negotiated. There should be frequent reports on progress (weekly, if necessary) and formal 90 day reviews of all projects within the scope of the contract. This will reduce the chance of scope-creep and out-of-control costs.

For additional information on these tips plus other tips for negotiation, please contact Alan Krinsky Associates.

Thursday, August 4th, 2011
This is our fourth tip in our series: How to Engage Procurement to Become an Agency Advocate

Use the concept of "preemptive-translucency." Despite the experience of many agencies, procurement is actually not interested and does not expect complete transparency in costs. But, agencies that fail to practice preemptive-translucency are actually inviting transparency. Procurement's interest in understanding agency costs is not to cut fees but to determine if their budgets are being spent wisely rather than squandered on lavish lunches, luxurious offices, overpaying salaries, and generally weak cost controls.

As an example, preemptive-transparency in salaries means that you disclose information such as how salaries are set. It is reasonable to say to procurement that your agency is only as good as your talent and you only hire from the top 10% and you pay salaries accordingly. You should then go on to say that you do an annual survey of salaries with your network of recruiters to determine salary ranges, perks and reasonable annual increases. And you would be willing to share that information with procurement. That is translucency and provides a solid basis for contract labor rates. The same disciplined approaches should be used to justify other costs such as real estate, travel, production, and even mark up.

Monday, July 18, 2011
This is our third tip in our series: How to Engage Procurement to Become an Agency Advocate

Put everything on the table. All procurement decisions are based on value. The more relevant benefits an agency can demonstrate the greater the value to the client. These can include new product concepts, high level business relationships, respect for the agency on the Street, contacts with distribution channels, experience with CRM global capabilities, ongoing marketplace research, proprietary research methodologies, unique project management capabilities, and much more.

ANA Webinar
After Wednesday (7/20), you can retrieve the presentation made by AKA on the July 15th ANA Procurement Webinar Series: Managing Advertising Excellence with Procurement."


Tuesday, July 12, 2011
Reminder

The ANA Webinar being presented by Alan Krinsky Associates takes place this Friday, July 15 at 12Noon – 1PM Eastern Daylight Time. Managing Advertising Excellence With Procurement will be an informative interactive session. The areas to be covered are quite timely.

Please go to the following link for details and registration.

Participation is complimentary for ANA members and client-side non-member marketers.

Thank you


Monday, June 20, 2011
Managing Advertising Excellence with Procurement

Alan Krinsky Associates is proud to have been invited by the ANA to present a Webinar in their Procurement series. This one hour interactive presentation is scheduled for Friday July 15th at 12 Noon EST ending at 1 PM. Registration is free to ANA members and non-member client-side marketers.

Alan will be running the webinar with Steve Marcus, a senior marketing consultant to AKA. Presently, Steve is launching MobiSave, the first mobile-based consumer rebate/coupon system designed specifically for CPG manufacturers.

Please check the ANA.net site for registration details. Following is a brief description of this Webinar:

  Procurement has been brought into the decision-making process of agency contract negotiation and agency selection. In addition, procurement is involved ongoing, in monitoring ad budgets and processes. Therefore, long-term relationships with agencies are imperative. This webinar will cover ways to help bridge the gap between client procurement and their agency. The outcome is to receive maximum value from procurement.


Monday, June 20, 2011
Tips on ways for agencies to engage with Procurement:

Encourage negotiations based on mutual interests rather than positions

Unlike other purchases, advertising can have a major impact on the entire supply chain. In traditional manufacturing, raw materials are typically sourced from multiple vendors and contract facilities that are always available to minimize production disruptions. This holds true for agency deliverables, especially in production and talent costs, as well as other services. Regardless of the scope of work, if demand fails to meet expectations, there is no short-term recovery or alternative. It is a lost opportunity for all time. Likewise, an agency is only as good as its ability to drive the client's business. Its track record is its most important asset. Therefore, each side has a mutual interest to see that the advertising has the highest likelihood of achieving the demand goals. It is therefore critical that the negotiation focuses on this as the best possible outcome and always returns to this when the negotiation gets bogged down in trimming fees. In effect, it is fair and appropriate to always raise the question: "Is this best for the business? Will this improve the chances of success or add risk?"


Monday, June 13, 2011
The most important person is not in the room

The hiring of an agency and the typical size of the contract will require senior line management approval.  Therefore, procurement is a surrogate for some other person who is not in the room.  In preparation for the negotiation, find out who procurement reports to and get the support of that person.  For example, if procurement reports to the COO, your COO or CEO should meet and secure their support through personal chemistry and explaining the agency’s assets.  The procurement manager will get their marching orders from their boss.


Monday, June 5, 2011
Engaging Procurement for Win Win Contract Negotiations

It has been over a decade since the 800 pound Gorilla, Client Procurement, surfaced as a new player in Agency selection and contract negotiations.  Over the years, agencies have learned their language, rules of the road,  interaction with marketing, and why delivered value is critical over price/cost in creating an effective contract of services.  Procurement is here to stay.  To that point, each Agency Holding company has taken on their own Chief Procurement Officer to engage supply chain managers in negotiating new contracts or contract renewals.  Results have been mixed – confirmed by research studies, panels and the general press. 

We believe that the agency community should continue to educate themselves on how best to sit down at the negotiating table, in developing relationships with procurement to the same extent as with their traditional “partners”, e.g., marketing.  AKA has developed ways to make this necessary engagement more productive.

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