Marketing Procurement

Recognising agency value

The bottom line is that if any procurement leader sees this as an opportunity simply to cut costs, then they will miss out on the potential to deliver greater critical thinking around your brand, smarter ideas and more impactful communications.

Agencies and marketing procurement haven’t always been great bedfellows. From the agency side the accusation is always that they don’t really understand marketing and the intangibles that great communications deliver.

I recognise that that criticism may be harsh for some marketing procurement leaders, who have massively increased their knowledge base in the decades since procurement first entered the marketing landscape.

The fact that it still gets repeated, however, highlights the cultural clashes that still occur when cost spreadsheet meets creativity as well as the reality that many agencies are under constant pressure to reduce costs.

For all the welcome talk of marketing procurement becoming a strategic advisor to marketing, assessing new opportunities and technologies, for example, many are still predominantly remunerated or mandated to deliver cost savings.

With the advent of the new AI-powered era, we have a unique opportunity to measure more and reward agencies differently and more fairly for the value they contribute to the great brands we bring into our homes and our lives as consumers.

I’m excited to be hosting a debate about what the future of procurement might look like at this year’s ProcureCon Marketing Connect in the UK.

Spoiler alert: It’ll be a face-off between those who feel that AI offers a chance to finally shift to outcome-only models and those who believe that the future is more nuanced and that strategic excellence requires a blended approach that includes traditional time-based compensation as well as output.

Senior leaders from Carlsberg and Beiersdorf will be joining me to make each case and help attendees determine which is the best way forward for our industry.

There are a host of views on the right approach around the agency world, we are far from uniform in our approach but understanding what clients want and their challenges helps us build thriving businesses dedicated to helping brands succeed.

Questions for procurement

Most agencies will have questions about the way marketing procurement works: Why, for example, is it so difficult to get procurement to move away from time-based models?

Are they really open to models that are about output and performance results? How much do they actually talk to marketing before starting work on new remuneration models?

Why are agencies not better recognised for the value of the IP they create (both during the pitch and when under contract) when that’s the reason the industry exists?

I would also flag up that for many agencies rates haven’t increased much over the last 20 years. Add in a volume discount on the biggest accounts and you have to admire how much agencies have still been able to do to drive brand growth for their clients while their own margins are being eroded.

When did it become the norm for agencies to sacrifice their own business performance for their clients? Surely it should be a win, win model for both parties?

EACA will be hosting the Euro Effie Awards in December, and I can guarantee you that the winners will be able to credibly demonstrate just how much they have done for their clients, not just hitting but exceeding their targets time and again.

And because it’s the Effies, they will be able to back up those claims with detailed analysis of hard KPIs.

Constant downward pressure on costs, however, has a human cost.

Our 2025 Sentiment Survey found that while agency staffers were proud to work in the sector, they also experienced high levels of stress and overwhelm.

Nearly one in three agency professionals felt stressed or very stressed and half do not feel as though they can manage all of their tasks without feeling overwhelmed.

It’s incredibly hard to be creative when you feel like that. Ours is a creative industry and needs space to breathe. Endless demands to work faster and be leaner won’t lead to innovation and ideas.

Looking forward

From my perspective as a long-time champion of agencies, AI represents an opportunity to create what clients have been demanding for years, more automation of tasks that could best be described as “doing the dishes”, freeing up more opportunity for thinking time and better creativity.

Research from the World Federation of Advertisers’ Marketer of the Future Study, for example, found that only 39% of under-performing companies have strong brand, strategy and creative foundations, compared to 63% of competitive leaders.

Agencies with contracts that enable them to focus firmly on strategy, creativity and brand-building, working alongside your marketing teams, are key to long-term success.

The bottom line is that if any procurement leader sees this as an opportunity simply to cut costs, then they will miss out on the potential to deliver greater critical thinking around your brand, smarter ideas and more impactful communications.

Collectively, we need to slow down to focus on long-term brand-building while tracking the everyday in parallel. The bottom line, however, whatever the precise model adopted, is that brands need to pay for exceptional work.

The data power of AI should also finally allow brands to remunerate the wider value that great agency work delivers. It should enable greater recognition of the IP that agencies bring to brands and its long-term value.

As industry commentator Mark Ritson recently argued, long-standing slogans for brands such as John Lewis provide enormous heritage that underpins the connection consumers feel. All too often, brands that ditch these classic elements quickly return to them because the power of those slogans translates directly to the bottom line.

And that raises a final question: quite frequently the agencies and teams that created those powerful calls to loyalty and purchase receive nothing, because they no longer work for the brand concerned.

Once the contract ends, so too does the reward. That’s a huge contrast to an actor that did the voice-over, the photographer who took the images or a musician who created the powerful soundtrack that accompanies those images. All of them receive payments every time the creative they contributed to runs.

If you are still using brand assets created by a former agency, then you need to acknowledge their role in creating that unique and powerful IP. And that includes paying for them.

About the author

As well as her European outlook, Charley Stoney is also the current President of VoxComm, the voice of agencies around the world, incorporating agency associations from all the leading markets, and she can confirm that this very much a global issue.

VoxComm is taking steps to provide practical guidance in this area and the Board recently commissioned Tim Williams and Brian Kessman to take a comprehensive look at new agency models to help inform our members of the pros and cons of the approaches currently in market.