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Industry Forum: does procurement win more pitches than strategy?

We asked: does procurement win more pitches than strategy?

Seyoan Vela

Chief creative officer, Livingroom Dubai

Yes

But creative wins more pitches than procurement.

I’m generalising but I think it goes creative, chemistry, procurement and then strategy.

Not that clients don’t love strategy in pitches. But most global brands already have a global strategy. And most regional clients will pick creative execution over creative strategy. Meaning great work on a middling strategy will always win over middling work on a great strategy.

Strategy without execution is just interesting thoughts and observations on PowerPoint slides.


Amer Massimi

CEO, Hashtag Social Media Agency

Yes

To elaborate; a good strategy is what gets us in the door. then procurement negotiations and budget restrictions play a big role in winning the business.

Seems that almost always, clients’ budgets restraints stand as an obstacle to what agencies aspire for. We see clients sometimes end up with the option two as they couldn’t afford what the first, better-strategy agency offered. And this naturally leads to lower expectations.

We saw a lot of pressure on clients’ budgets overall, especially in the past two years. We expect this trend to go back to normal this year though.

Then, may the best strategy win. 


Stuart Mackay

General manager, Reprise MENA

Maybe

Procurement functions today rightly play an instrumental part of any vendor selection process, especially when it comes to the commercial terms of a deal. However, the strategic objective of a tender often comes second to the commercial aspects of the brief, and tendering organisations today are aggressively challenged across a number of areas such as pricing, payment terms and staffing. This is absolutely required but not at the cost of the original objective. What tends to happen is that tendering organisations are challenged so aggressively that they can then only support the original objective with a sub-optimal team. This then causes friction and challenges during the delivery of the strategy, which subsequently causes delays and overspend. Quality can be purchased at a reasonable price; the challenge is not to compromise on the quality just so the procurement function can meet their targets. In the end a business will always spend more when they favour pricing and terms over quality. 


Camille Haddad

CEO, Wunderman Thompson KSA

Maybe

Companies and brands everywhere are facing lots of challenges, particularly in terms of financial growth. These challenges have changed the rules of engagement in our industry, whereby most of the decisions on pitches have moved from the marketing department to the procurement arena. 

At WT we strongly believe that we are in the industry of inspiration: any brand that inspires its customers will grow faster and will have a bigger loyalty base. Therefore, cost should never be the main driver for awarding a pitch, especially for ambitious companies that want to grow in terms
of value.

It’s time to bring back the conversation and decision-making from price to value creation, as creativity and bold communication can only amplify the brand equity, leading to superior shareholder return.


Gregory Mardikian

Managing partner, VMLY&R Commerce

Maybe

Procurement is usually the guardian on selecting the agency based on its credibility and commercial offering, and most of the time they go with the lowest offer among the agencies on the roster. However, strategy is what plays a very big role in getting the agency shortlisted and having the creative work built around it.

So, I would say, although procurement usually has the final call, both go hand-in-hand. While the brand team always pushes to award the best strategy and creative work, procurement takes on the role of negotiating and mediating to get what’s best financially and strategically for their business.


Michael Maksoudian

Managing partner, Netizency

Yes

Unfortunately, we’ve experienced procurement going with the lowest bidder multiple times, as if they are buying construction material. In most cases, procurement does not understand the services that agencies offer and how they relate to pricing, and the marketing team outsources the entire process to them without being involved. We believe there should be significant education about advertising services to procurement teams. Just remember: you pay peanuts, you get monkeys.


Ali Rez

Regional executive creative director, Impact BBDO Group MENAP

Yes and No

They’re both important and, in an ideal pitch, both bring their relatively important weights, helping a balanced decision-making process that best serves the brand and business purpose. Either one of these divorced from the other would not provide the ideal value a business needs – procurement should complement strategy.

 


Maria Akmakji

Client services director, You Experience

No

The short answer is strategy wins pitches.

Amplification of the strategy across multiple platforms and channels is what builds up cost.

While procurement want all the ‘bang’ for less bucks for good reasons, smart agencies will pre-empt this and come into pitches with a rock-solid strategy and a robust selection of campaign-critical amplification proposals.

So, in my opinion, a great pitch is an intelligent combination of an audience-winning communication strategy (sharp and mean) and a well-weighted amplification plan (limber and lean).

Go Mean and Lean is the ‘pitch strategy’ strategy today.


Amel Rebbouh

New business director, UM MENAT

Yes

Over the past few years, from our pitching experience across various industries and clients, we found that procurement-led pitching is becoming the norm. 

We’ve seen first-hand its power over anything else. It’s usually a long, arduous, multi-phased process, that’s legitimately the best way to serve its primary objective of sourcing the best services at lower cost. However, it can come at the cost of compromising on quality, which is why it would be ideal to select agencies, at a higher proportion, based on their core competencies: strategic & innovative insights, clear and qualitative recommendations, ability to measure it all to ultimately drive cost efficiencies, while keeping quality and brand value in mind. Notions that are not top-of-mind for procurement teams.


Daniel Shepherd

Head of strategy and product, PHD MENA

No

It’s a provocative but deliberately misleading question; it’s not a binary choice. 

At PHD we put strategy at the heart of everything we do because we believe (with good reason) that strategy and creative thinking can deliver disproportionate returns for our clients. Up to 500 per cent ROI.

A good strategy should always unlock value for a client. And procurement’s job is to showcase that value. Offering ‘competitive’ rates to win at any cost will ultimately punish the agency and therefore the client, as there won’t be the bandwidth to bring innovative strategies to life.

The smartest pitches see the two-working hand-in-glove.


Abdallah Abou Hamdan

Integrated strategy manager, Boopin

No

Most of the times procurement and marketing departments argue about this as each must do their job right. While procurement is keen to get the best prices and save the company’s money, the marketing department focuses on the strategy, approach, how the is agency going to help them achieve their goals and multiple other factors. With more and more agencies entering the market every day and being eager to get business, competition rises, and some do use the price factor as a deal-sealer. This does work sometimes when price and procurement have the final word, yet strategy and marketing will always be the key for impressing the client and winning the pitch.


Mounir Harfouche

Chief executive officer, MullenLowe MENA

No

Procurement’s role in a pitch process is to understand the needs of the business, the industry and market value, as well as the services. When procurement does not look at agency services as commodity then strategy and strategic procurement become a holistic factor behind the business-critical selection of a partner.

Brands that we look to partner with are those who value the strategic role of agencies and know how to evaluate and recognise the difference in their offering. Therefore, I’d like to believe that mature companies go for strategy first, then they negotiate the best possible financial value. I’d also like to believe that mature agencies don’t undersell their value for a win and end up falling short on delivering any strategic value.


Raksha Khimji

Managing director, Team Red Dot

Yes

Running an agency in the UAE for over a decade, I have witnessed that procurement tends to win more pitches than strategy. I think this has a lot to do with the pedigree of the teams sitting at the top of the client organisation. The shadow of a leader trickles down throughout every department of the company. If the leader places importance on learning, growth and evolution  then these are the qualities that infiltrate across the various departments. If the leader is constantly looking to cut costs, and places speed and quantity over impact and quality, then the ‘most favourable terms and lowest price’ will always take precedence. Thankfully, we can tell which type of client we are dealing by the quality of the brief and timeline associated with the RFP sent out. That’s when we know they are looking for a solid strategy, meaningful insights and a refreshing approach to how things have always been done. Those are the pitches we go for. Then, procurement tries to do what it does best – often at the detriment of the original campaign’s objectives. So ultimately, nobody wins.


Mark Abou Diwan

Managing director, AMC Advertising and Marketing Consultants

No

I believe any pitch is essentially a creative process, even if the requirement appears ‘commercial’. As an agency, it is critical to understand that winning over procurement doesn’t mean giving up creative ideas or diluting ambitious concepts to meet cost implications. It’s about understanding the common end goal, solving procurements concerns, finding the middle ground to showcase our innovative solutions, and communicating the agency’s worth. Pitches are about crafting compelling strategy-based narratives backed by facts, figures and results. We do not expect to make a persuasive argument based on data alone. Instead, we create solutions with a provable value to drive procurement’s decision-making that eventually helps to sign up a new relationship.


Carlos Nadal

Head of growth, Havas Middle East

Maybe

There is a fundamental issue around governance and setting the right priorities and objectives from the moment an advertiser decides to run a pitch. Technical and commercials competences, although equally important, tend to operate in true isolation, with procurement owning the winning ticket. Commercials are key but should not overshadow any strategic exercise no matter how ‘low’ an agency is willing to go. Still, a sustainable partnership should always aspire to bring the best of both worlds, and this falls directly under the responsibility of the advertisers. We should always aim to have honest, transparent pitch processes with a clear understanding of why an advertiser is going on pitch. That is only fair for the existing incumbent as well as the potential new future partner.


Tarek Miknas

CEO MENAT, FP7McCANN

Yes

Every company is different, but generally, most pitches are broken up into the technical submission and the financial submission. Typically, the brand’s marketing team lead on the technical, and procurement on the financial. Once the agencies shortlist with their technical (strategic and creative) submissions/presentations, the process moves on to the financials.

Although often a marketing team will share their preferred choice, procurement will tend to look at the two or three shortlisted options as agencies of relatively equal standard that have been vetted and could technically carry out the scope.

At that stage, the final stage, and in most cases, it’s all about the number.

In short, strategy and creative are imperative to shortlist; financials are key to closing the deal. Again, this is a very generic overview. There are also many cases where marketers know who they want to work with, are empowered to decide and eliminate the pitch process entirely.

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