Procurement Is Subject of Contention at AAF Awards
NEW YORK (AdAge.com) -- Procurement took a bit of a beating at the American Advertising Federation's annual Hall of Achievement awards today, a sign that some marketers and agencies have reached the breaking point when it comes to the penny-pinching that they feel is starting to strangle creativity and innovation.
At an event that usually passes without so much as a word uttered in anger -- where the industry's highest achieving under-40s thank their families and friends for helping them win one of the business's top accolades -- one of the honorees, along with the chairman of AAF's executive committee, took the opportunity to throw a barb or two the way of procurement.
"Procurement wants to pay less than enough," said Tara Comonte, Mediabrands chief financial and operations officer, after she became the first chief financial officer be inducted into the group's hall of achievement. "And it will be self-destruction."
AAF board member Frank Cooper joined Ms. Comonte in condemning procurement's negative effects on creativity at the luncheon, which honored a handful of top ad professionals under age 40, including Ad Age and Creativity VP-Publisher Allison Arden. "With global procurement leading creative and media discussions, disaster is surely on the way," noted Mr. Cooper, who is PepsiCo's chief marketing officer-sparkling beverages, before he introduced inductee Peter McGuinness, chairman-CEO of Interpublic Group of Cos.' Gotham.
The need to retool for an increasingly digital world as we emerge from the recession should be a catalyst for the industry to band together and reinvent its business model, said Ms. Comonte. "It's crazy that we are paid for how long it takes to do something or by how much our clients spend," she told the crowd gathered at Cipriani today.
These indictments follow Ad Age Editor Jonah Bloom's critique of procurement at the Association of National Advertisers' annual conference in Phoenix earlier this month. Recalling figures from Ad Age's DataCenter, he reported that operating margins of the 100 leading advertisers have remained virtually flat from 2008 to 2009 while agency margins have dropped from 12.2% to 10.5%.
"If that decline continues, it affects agencies' ability to invest in the new services -- the technology, the talent -- that advertisers need," he said. "I think we'll all regret this." He also highlighted Ad Age reporting that nine out of 10 procurement officers had no experience in marketing before their current role.
Rounding out this year's hall of achievement honorees: Ari Merkin, founding partner and chief creative of Toy New York; Beatriz Perez, senior VP-integrated marketing, Coca-Cola North America; Tracey Sheppach, senior VP-video innovation director, Starcom Mediavest Group; and Ben Silverman, founder-CEO of Electus. Ms. Perez was also the recipient of this year's Jack Avrett Volunteer Spirit Award.