Avoiding Perceived Commoditization in Agency Engagements ? Procurement's Role

Abstract ? Rising involvement of procurement in marketing services agency engagements in last two decades has changed the dynamics of client agency relationship in this space. The traditional focus of procurement which was heavily on year-on-year savings has given way to generating best business value for organization by identifying key suppliers through data analysis, forging strategic relationship with key suppliers and robust supplier relationship management framework to mitigate the future potential risk of supply chain disruptions. ? This white paper attempts to analyse the effects of procurement involvement in marketing services sourcing, the trend of commoditization of marketing services and its debilitating effect on the client, agency, industry and the role procurement can play in avoiding the commoditization of services by playing the role of a facilitator in different stages of client agency relationship ? The ever changing landscape of the agency/suppliers in various marketing category across regions demands the increasing role of procurement department that collaborate with marketing teams to ensure business value in marketing services engagements.The procurement department has to balance the value(in terms of quality, innovation, speed to market etc.) and price that enagagement with the agency will bring to the client. The adjustment between these factors is very crucial to guarantee that desired output from agency matches marketing communication requirement of client. Undue emphasis on either of the factors by procurement and marketing will lead to suboptimal utilization of the agency and its services.