How Much Is the Health of a Brand Worth?
The quality of the work is put at risk every time procurement levels down prices and stifles marketing. It is even more appalling when such behavior is endorsed by large consultancies.
It is the duty of every ad agency, advertiser, vendor and supplier to be the custodians of the communications industry. This care should be taken especially in regard to the industry’s most sensitive issues, which — due to discomfort or apathy — tend to be topics we avoid discussing. Looking the other way won’t take the pain away from this raw nerve: the issue of agencies’ remuneration, increasingly devalued by — in some cases — conflicting relationships between clients’ procurement and marketing departments.
I respect and believe it to be fundamental to the survival of all that cost effectiveness be seen as a vital factor in commercial transactions. But that doesn’t mean that what’s best is the cheapest. On the contrary, the best costs more because it involves in-depth research, cutting-edge technology, well-structured processes, understanding of the market, commitment and, most importantly, that priceless asset: talent.
Brazilian advertising is among the world’s top three today because it has always revered these aspects. Over the decades, we were able to bring over people who could have gone on to become renowned journalists, lawyers, architects or musicians, but who instead chose to pursue this profession because they encountered a rich — and well-paying — field for ideas to flourish. More than that, they were moved by the desire to contribute something of relevance through advertising and marketing.
It’s worth recalling that commercial communication is an essential element for selling products and driving economic activity within the country, promoting entertainment through sponsorships, and for helping to sustain independent communication vehicles that enjoy ample editorial freedom. Besides helping to reveal Brazilian popular culture, advertising itself has countless times become an element of this culture. Wouldn’t you say that’s priceless?
Unfortunately, nowadays I see the undeniable drop in quality when deliverables are put in check each time procurement prevails over marketing with the intent to cut the price of services. It is even more appalling to witness this kind of behavior endorsed by large consultancies whose primary concern lies in cutting immediate costs rather than in the brand's longevity. In many cases, this is due to the consultancy being remunerated for cutting the costs of the services paid by its client to the supplier, and not because it was able to find a better or more competitive option. In other words, they’re opting for the cheapest — pure and simple.
The debate that both marketing and procurement departments need to have should be centered on answering this fundamental question: How much is the health of a brand worth? And to what point is the advertiser willing to run risks in the name of cost-cutting? I believe we can draw an analogy from our personal life: If you were very ill, would you change your medication and doctor to economize? Would you put your life at risk? My reply is simple: no. I’d invest in the best doctor and the appropriate medication, not in whatever was cheapest.
It’s encouraging to see that major advertisers such as PepsiCo follow the same rationale. Recently, Pepsi abolished procurement and gave its marketing department full responsibility for negotiating the costs of services rendered by its communication agencies, a move that favors concepts such as agility, quality and efficiency.
This positioning supports my belief that when procurement stifles marketing and decreases the value of the ad, we all lose: Ad agencies lose great talent as well as steam to perform basic tasks as mentioned above. This leads to brands watching their relevance wither away while society as a whole suffers a weakening of its sources of information, entertainment and culture. Without them, what is left? Chances are, the ailing patient will continue to degenerate.
This article was originally published in Meio & Mensagem.