Procurement should not be allowed to threaten creativity in the advertising industry, according to Motorola’s European marketing chief Simon Thompson (MW March 30). Indeed Thompson was quoted as saying that procurement is the biggest challenge facing the industry today. Is the suggestion that procurement wants to buy creativity by the yard, or that procurement has a complete lack of understanding of what it takes to produce good creative work?
Thompson’s comments provide an interesting perspective on the client-agency relationship. The procurement process is too often based on a logic stemming from economic theory that appeals to reason. What is missing is trust. Trust comprises both a cognitive judgment, that the agency has the required competency and operates efficiently – and also an emotional belief that it can be relied upon to work single-mindedly in the client interest. This latter aspect of trust is sadly hedged with suspicion; particularly when it comes to making decisions on creative work. Probably this is not surprising since clients by and large are not trained to judge creative work, so can’t. They also, by and large, are afraid of the new and different, so don’t trust it – it may be risky.
To minimise risk, the procurement function frequently elects, it thinks, to control agency behaviour by a payment by results system.
Payment by results (PBR) is underpinned by an economic logic based on “principal-agent” theory; the objective being to ensure that the interests of the agency handling the client’s business correspond to the client’s own interest. Trust is largely bypassed. Targets are set, measurement tools agreed, incentives put in place. The whole structure is completely based on reason-rewards and penalties are explicit.
Such systems will achieve a degree of success in relation to performance. It is a debilitating environment however in which to try and produce great creative work. Trust however is quite different; it depends on evidence that the agency has the client’s interest at heart. Here the rational PBR system fails to engage. While performance may be measured, trust is not nourished. PBR may indeed be regarded as a substitute for trust.
Thompson is right – the lack of trust demonstrated by procurement practices inhibits the very thing clients crave – great work.
Results International UK