Procurement Professional is the official publication of CIPS Australasia

#85 - How do you buy creativity?

24 Oct 2009

The news today that ANZ bank have apparently spent $15m on their shiny new logo   http://www.news.com.au/story/0,23599,26248717-2,00.html?from=igoogle+gadget+compact+news_rss  raises the old question of how do suppliers (advertising agencies really) price creativity?.

In the old days, they just made it up – their ‘fee’. Then they worked to hourly rates like lawyers. Then to monthly retainers [pay us $x’000 pcm and we’ll call it right eh?]. Then they tried just taking a commission off your advertising media spend [we’ll throw in the creative for free if you’re spending x million on media, we’ll just take 12% eh?]. But that devalued the creative input, and advertising expenditure was plummeting at the time too!

Latterly, they tried taking a % of the spoils, [eg; “your ad campaign made $Xm for you, we’ll take 12% eh?]. But that demanded quality measurement. Much effort has gone into measuring the performance of marketing campaigns over the years. Procurement could even learn a thing or two from this work. The Australian Marketing Institute  http://www.ami.org.au/index.asp  led the way on this thinking with their ‘marketing metrics’ work which was excellent, and respected internationally. But, using measurement as the criteria for buying creativity meant that Creatives didn’t get paid when campaigns bombed [often].

The Buyer doesn’t think that ad agencies will ever embrace the ‘Radiohead’ way – pay us what you think it is worth, though apparently some desperate Creatives have tried that. Crowd-sourcing is the real new way to buy creativity of course, and always worth a try. Underemployed designers and Creatives bookmark specific websites on design. Punters post their briefs publically and any designer is free to pitch a solution free of charge. When the buyer selects a chosen design it is free. The supplier hopes for further work of the back of their first freebie. It works. Try threatening it - you might embarrass your marketing department into a concession or two.    http://www.wired.com/wired/archive/14.06/crowds.html   Google it – there are many options.

The local ad agencies trade association  http://www.afa.org.au  may not agree it is a good approach though.

Nowadays, there are as many schemes for paying ad agencies for creative work as there are ad agencies – take your pick. They also include project fees, rate cards and combinations of all of the above too. There are even two or three consultancies like the AAR register  http://www.aargroup.co.uk  [there is one is Australia too] that exist simply to advise buyers and run “blind” beauty-parades [RFPs] or pitches [tender processes] to select ad agencies [suppliers] to stop marketing directors [buyers] getting persuaded [conned] by the full might of a large ad agencies flattery [awards] and charm offensives [freebies].

A smart chap from the marketing nether world called Darren Woolley from Trinity P3 [ a vendor] often presents at the CIPSA Category Management Forum each March on the current finer points of buying expensive marketing stuff www.cipsaconferences.com.au  He also explains the jargon and offers some “How to....” advice and critiques some of the decision support software in the market too from some of the leading providers. It incorporates the CIPS UK work with the IPA too – called “Magic n Logic” ...  they even produced a fancy booklet on it which is very good www.magicandlogic.co.uk   

Of course, the Marketing department’s spend is the last bastion of addressable spend for Procurement in many companies [see blog #54] and, even, in the public sector as the ruling party’s preferred ad agency apparently sometimes get rewarded for their election campaign work allegedly. Perish the thought.

The Buyer – posted 24 October 2009

The views of THE BUYER are personal and are not necessarily those of Procurement Professional magazine, BTTB Marketing nor CIPS.