Procurement and agencies: Sometimes you drive me crazy, but I still love you

Welcome to Phoenix, Arizona, where the tumbleweeds blow, and where 800 procurement and agency professionals gathered last week for the annual ANA Agency Financial Conference.

This was the largest financial conference in the history of the ANA—a sure sign that this is a critical topic on the agenda of marketers—and as befitting such an event, we got a combination of rock stars from Mastercard, Johnson & Johnson, AB InBev, Adobe, FCA, Farmers Insurance and others.

This article’s title, the subject of one of the sessions, also reflected a changing mood in both procurement and agencies towards each other. As a long time visitor to this Fee-Fest, I sensed a ‘détente’ in both sides and a mutual acceptance that all these years on, they need to work together to a common outcome. There was less of the bombast of past events, as evidenced from thought presentations from Accenture, Anomaly, RGA on others on new types of working partnerships.

Firstly—media agency relationships are changing. Based on new ANA research, 69 percent of contracts have been adjusted in the last three years to reflect the new world of programmatic, privacy and transparency.

Now, 62 percent of relationships include data and analytics and 75 percent of large agreements have a performance element. Having "skin in the game" was also a theme of Carl Johnson of Anomaly’s presentation. He shook the room by throwing away timesheets and looking at a whole range of new models including revenue sharing.

Mastercard is going sonic. Raja Rajamannar, the chief marketing and communications officer and president, Healthcare of Mastercard took us on a journey from new logo to new sound that saw the brand move from #89 in Brandz to as high as #10 in the U.S. With their market cap more than Visa and Amex combined, this is a true story of marketing-led business growth.

Accenture is taking no prisoners. Brian Whipple (CEO) spent a big chunk of his presentation "myth busting"—showcasing organic growth, strong creativity, and answering innumerate questions about Droga5. It’s clear that focusing on experience is a powerful platform.

AB InBev is putting creativity first. Jodi Harris and Dan Andrzejewski talked about new platforms such as the Agency Assembly, their own internal creative awards, and a monthly opportunity for roster agencies to bring fresh thinking for fresh revenue. The beer category is searching hard for growth—creativity might be the key to unlocking some of it.

In some ways, Julian Hooks, the chief procurement officer of Johnson & Johnson, set the tone for the ‘new era’ of purchasing—with a clear articulation of the focus for the 1,600 procurement people in his company worldwide—"we partner to shape solutions that transform healthcare."

Nothing in this statement about reducing agency fees, FTE’s or overheads. J&J also famously has a balanced scorecard for all it’s procurement members with four areas, only one of which is value, and the rest involve innovation and process improvement.

While there was very little saliva swapped (in public, at least), there was a feeling that procurement and agencies have the ability, the need and the mandate to work more collaboratively together to drive business growth. Fingers and toes are collectively crossed.

Greg Paull is co-founder and principal at R3.