According to InfoAdex, ad investment in media reaches today in Spain the €14.900Bn, around a 1.33% of GDP.
To this amount it must be added the cost of the work carried out by the agencies, the investment in marketing, promos, public relations, production and other communication activities. All together, a bunch of money.
Advertising and in general marketing agencies are complaining for many years of the progressive reduction of their commercial margins. If this weren’t enough -to make it even worse- “now here it comes sometimes the Purchase Department taking the responsibility to do it, as if hiring creativity, advertising, marketing or communication services were like buying screws”, comment some marketing professionals.
The human being who writes this short used to think that the agencies were dramatizing in excess and those Purchase Departments just do the advertising hiring in scarce occasions.
But it seems that it isn’t so. The phenomenon has become widespread and will become even more, not only in Spain but in other countries.
The fact has been corroborated by an investigation conducted by AERCE (Spanish Association of Professionals of the Procurement and Supply Functions) and Grupo Consultores among large and medium-sized companies. The previous report shows that in a 33% of the surveyed companies the Purchase Department participated in the procurement of marketing services during the past year, a 7% more than in 2008.
Does this mean that Marketing Departments are gradually losing its decission power in favour of the Purchase Departments, as it has been also happening in the case of the Finance Departments, which decide the money available for the marketing purchases?
The recent agreement between the AERCE and Grupo Consultores to carry out a research under the name “Communication Purchase”, a survey project aimed to define new common standards for hiring marketing and communication services, and establishing this way a manual of good practices, just confirm the trend mentioned above. It is a good thing that the Purchase Departments feel the need to know how to acquire and value that kind of services, something in no way easy, and sometimes difficult even for the marketing professionals.
How can be accurately evaluated the quality of an intangible asset such as a creative idea or, in general, the communication?.
They mix together so many factors in the communication process that even once the action has been carried out it is complicated meassuring its effectiveness in ROI terms.
All these facts result in two additional dangers. First, low price may well come first at the time to purchase ad and marketing services. And second, if the “hunger” enters through the door, the creative talent might take flight through the window.
Aren’t we, perhaps, at the first steps of a new screw twist looking to narrow even more the already low margins of the agencies?.
Image over the headline.-got an idea?. © Eastwind.
