Penny wise, but Pound foolish?

To the bombast of ad agency nomenclature, a new (well, newish) term has been added: commercial director. What does it actually mean as a job title? The glib answer is ‘paper clips – the purchasing thereof’.

This, however, cannot possibly explain the popularity of the function, which has spread like wildfire from agency to agency, culminating in the high-profile defection of Orange’s procurement chief Tina Fegent to Grey.

While an eagle eye cast upon agency suppliers is no bad thing (a job that often seems to fall between the cracks in the finance department), the real virtue of these people is symbolic and client-facing. At a time when, according to the Incorporated Society of British Advertisers, nearly half of all advertisers involve their purchasing departments in the drawing up of an agency contract, it makes sense to play clients at their own game. Never mind that most purchasing personnel have not an iota of marketing services experience, they are skilled in the negotiating practices likely to win grudging admiration, and therefore concessions, from the other side. As such they add a little lustre to the idea that agencies are becoming more professional in their approach to business.

Yet there is a curious irony lurking in this development. For many clients are themselves only reluctant converts to the merits of procurement, and with good reason. True, purchasing directors are a useful ally in pursuit of the marketing director’s bête noire, the agency ‘rip-off’. But they are also a source of competition, eroding what has been the traditional power base of the marketing department. To the extent that money – or the saving of it – becomes the primary determinant of whatever creative solution is finally chosen, both agency and marketing director are losers. Agencies for obvious reasons, marketing directors because they have been demystified: they can no longer play high priest at the temple of mysteries.

The procurement issue is, of course, only an aspect of a wider malaise affecting the marketing function. At its heart is the failure of the marketing director to take a seat, let alone command, in the boardroom. Currently, only five FTSE-100 companies have marketing directors on the board, a deficiency that is not adequately explained away by the fact that a number of these companies (for example the pharmaceutical giants) don’t face the consumer directly. When we get to the top level – marketing-bred chief executives – the picture is even bleaker: there’s, er, Terry Leahy and Peter Davis.

Why that is so is not the question here. The point is to change the situation. Only by playing a more powerful role in the boardroom will marketing stem the corporate forces sapping its strength. And only when that happens will agencies be able to satisfactorily address the procurement issue.

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