The Creative Agency as a Supplier (and what it means for Supply Chain Management)
In many large firms, the supply chain management function spends an enormous amount of time managing suppliers. This includes things like negotiating contracts for raw materials, maintaining inventory and order timelines, and measuring efficiency and costs. Keeping such a close on the supply side of the business is proven to pay big dividends.
For companies with manufactured products, the cost savings created by an efficient supply chain can often contribute more to the health of bottom line than increases in revenue yielded by marketing efforts.
These meticulously-designed supplier management processes have proven to be incredibly valuable to the firms that implement them, increasing efficiency while lowering total costs in essential areas of the business. But which department is most often labeled “inefficient,” frequently has its effectiveness called into question, and is first on the chopping block when it comes to cutting costs? Marketing. Which is why we need to start treating marketing providers like suppliers.
Manufacturing-heavy companies should take the same supplier management concepts applied to the back end of their supply chains and apply them forward to creative suppliers like internal marketing departments, creative consultants, and advertising agencies. Here’s why:
Supply chain as a marketable advantage. The sourcing function within a given supply chain management team can work with creative suppliers to highlight back-end benefits and supply chain advantages that are unfamiliar to the marketing functions.
Advertising campaigns are often based on a unique component of the production process that separates the product from its competition. This difference is then highlighted as a benefit or a “reason to believe” in marketing communications. Budweiser’s beer is “beachwood aged,” and other beers aren’t. Who knows what it means, but it’s a unique aspect of Budweiser’s production. Wendy’s burgers use ”fresh, never frozen beef patties.” This tagline emphasizes a success of the restaurant’s supply chain, while also implying that other restaurants do freeze their meat.
What gets measured, gets done. Supply chain management teams evaluate all suppliers using scorecards with standardized metrics for success, costs, efficiency, and more. Marketing suppliers can be evaluated on these same principles, which can help to alleviate the long-standing grievance that it’s almost impossible to ever tell if the marketing team is doing anything. The creative scorecard could include a number of relevant metrics:
•Number of staff members/hours/other resources devoted to account
•Awards won by agency / “creativity” metric
•Increases in revenue thanks to marketing efforts (difficult to measure, but becoming easier if promotions and sales are tracked online)
Applying supply chain management principles to creative suppliers can clearly help to better measure effectiveness and manage costs. There is one major problem, however: Marketing doesn’t like it.
Members of the marketing team, advertising agencies, and other creative suppliers will almost always resist being treated like another node in the supply chain. “You can’t rush the creative process, it’s about the work, etc.” These are valid complaints, but they are only self-defeating in the end.
Creating a good ad campaign is really different than providing raw wheat gluten for processing. But if creative suppliers want to stand up for themselves, demonstrate their value, and stay off the table the next time budget cuts come around, they need to be willing to join the supply chain and prove their worth.
30-Day Challenge #15
