Mercer Island Group survey finds procurement hampers agency operations

MERCER ISLAND, WA: A new survey on the billing practices of professional disciplines warns that the growing role of procurement departments in agency contract decisions poses a risk to the traditional operations of PR agencies.

MERCER ISLAND, WA: A new survey on the billing practices of professional disciplines warns that the growing role of procurement departments in agency contract decisions poses a risk to the traditional operations of PR agencies.

The survey, by the Mercer Island Group (MIG) consulting firm, noted, "PR in particular is losing ground by not being able to define the monetary value of its services and senior mind power."

MIG founder Steve Boehler said that the increasingly apparent downward pressure on billing rates spurred his company to do the survey. "The very short life expectancy of chief marketing officers has to some extent diminished their power in a lot of ways within corporations," he explained. "The folks in procurement departments have longer life expectancy, if you will."

Therese Adlhoch Smith, an MIG senior consultant who worked on the survey, said that procurement professionals' fundamental focus on monetary value is a barrier to understanding the intrinsic worth. But those procurement departments and agencies that have worked together gain understanding of the process. "Those procurement people were even more comfortable with it. There wasn't an us-versus-them feeling," she said. "But it's a bumpy road to get there."

The survey noted the difficulty of reconciling procurement's need for measurable metrics and PR agencies' desire for "value billing and pay-for-performance."

Procurement's increasing importance will add to the need for effective measurement tools, placing PR at a disadvantage.

"PR is one of the marketing services industries that's least well equipped today to answer the question of what is a dollar worth," Boehler said. "Procurement's involvement can only make that a bigger problem for PR."

PRWeek editor Julia Hood was interviewed for this survey.

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