Compag: 10 years of achievements

ISBA’s Communications Procurement Action Group, or Compag as it is more affectionately know, was formed just over decade ago after a small group of blue chip ISBA members working in marketing communications purchasing came together to debate common issues. 

Diageo, BT, Glaxosmithkline, HBOS, Boots, Prudential and British Gas were among the founding members and all found the forum so useful that they remain active on the group now even 10 years later. 

One of the most pressing issues identified by Compag at the time was how to prove and promote the value of the purchasing function, and to improve its perception both inside and outside their companies. At those early meetings all agreed that purchasing’s role is to increase value but the question still remained of how to measure ROI of marcoms expenditure and whether it would be possible to formulate a relevant value-for-money equation.

The quest to establish the value of marcoms expenditure became one of the group’s first (and lasting) objectives resulting most recently in collaboration with the IPA on the document Measuring Marketing Payback which quickly became an ISBA ‘best seller’. 

Some of the groups early objectives included  providing the market with empirical evidence and information on payment-by-results mechanisms in agency remuneration, developing model format contracts for ease of use by the whole industry, setting industry standards for best practice for both agency and client, and understanding and gaining more control over production costs in press and TV. 

Compag has now more than 50 full members including Mars, Coca-cola, BMW, O2, Nokia, T-Mobile, Tesco, Marks & Spencers and HSBC (along with many more associates and 10 category-specific subgroups) and is tackling a full agenda of issues.  

The Compag top ten 

Ten of Compag’s greatest achievements have been: 

1.       Improving the image of procurement
Historically the procurement function has had a challenging time proving itself to the rest of the industry. But improving the image of, and raising standards of practice among, marcoms procurement professionals has been one of Compag’s leading achievements. Whether through education to improve understanding of procurement’s role in the industry, sharing best practice tools and techniques or actively engaging with other industry bodies, agencies and marketing professionals, Compag has worked tirelessly to promote the activities and capacity of procurement   And perceptions have changed in the last 10 years with agencies more openly embracing the procurement function now as a business partner, and marketing acknowledging that procurement is a vital part of their team. 

2.       Producing the world’s first model contracts for relationships with creative/media/BTL/digital agencies
Through Compag, ISBA in partnership with other industry bodies the IPA and CIPS, has developed the world’s first plain English model contract terms for relationships with creative, media, BTL and digital agencies (digital contract launched 17 March) . Before the advent of these model commercial terms clients had no easy starting point for contract negotiations. 

3.       Developing a best practice toolkit for building better agency relationships
In conjunction with the IPA and other industry bodies, Compag has developed a suite of best practice guides to help advertisers improve their processes and practices, particularly improving briefing and evaluating agencies and campaigns. This fully acknowledges that the best, most professionally managed agencies achieve the best results and reduce costs due to smarter processes. 

4.       Helping to improve business relationships between procurement, marketing and agencies (Magic & Logic)
Compag fully understood the need for improved understanding and business relationships between procurement, marketing and agencies and heavily inputted into the joint industry initiative with IPA and CIPS - Magic and Logic.  The subsequent Magic and Logic report proposed changes to current practices to make the relationships between the three stronger and make the industry as a whole better equipped to meet the challenges of the future. 

5.       Re-engineering (de-coupling) the production process
Compag identified the desire of advertisers to re-engineer the advertising production process ten years ago and has since been at the forefront of efforts to educate advertisers and the broader communications industry about production de-coupling. Compag’s pioneering activity in this area has resulted in a host of documents, events and guidance notes, including a guide to post production centralisation and a guide to purchasing music for television, radio and cinema ads. In recent times ISBA has seen a renewed interest in this subject as the need for tighter cost control takes grip.  

6.       Developing data and case studies on Payment by results
We have developed critical thinking and case studies on Payment by Results (PBR) mechanisms working in conjunction with academics to deliver background research data and inspiration to the market. Our PBR report examines the wisdom of relating pay to performance and analyses current practice in advertising agency agreements.  First published 10 years ago a new 10-year updated perspective is about to be launched feeding vital empirical data into the marketplace. 

7.       Developing pools of benchmarking data to bring transparency to advertisers’ agency fees
Advertisers want to ensure that they have the most effective agency remuneration model in place, one which strikes a balance between motivating the agency and getting good value for money. With this in mind, Compag acted as the catalyst to ISBA’s development of anonymous pools of data to help advertisers benchmark their fees across all types of agency. 

8.       Educating advertisers about the opportunities available through newer disciplines such as digital
A large part of Compag’s work has been around helping advise ISBA members about their use of emerging disciplines such as digital and the opportunities afforded. Compag identified the information and knowledge gaps of members and have collectively developed smart guidance to aid understanding through, for instance, our model digital agency contract, our guide to understanding and working with digital agencies or our benchmark pools which compare agency costs for digital services across pure play, ATL and BTL agencies. 

9.       Helping procurement professionals build the case for the value of their function within their own companies
Compag developed a smart document – Understanding and reporting the value of marcoms procurement – to assist marcoms procurement professionals in building the case internally for the added value they bring to an organisation - not just pure cost control.  

10.   Helping developing member guidance on TUPE
The TUPE employment legislation that was updated in 2006 potentially impacts on a client’s ability to move business from one agency to another. Although it is a complex regulation, ISBA offers guidance on how to approach the subject in a pitch situation and has produced a useful guidance note on TUPE protocols. Compag acted as a catalyst to the development of this guidance as the group’s members already had an understanding of TUPE’s impact from other business areas.   

Clearly this group of influential individuals in mainstream blue chip organisations  has had a big impact over the last 10 years, professionalising commercial arrangements, leading the charge on process engineering and bringing ideas and best practice processes into their organisations. Their role has never been more at the forefront than now and the group continues to strive to bring balanced views and information to the market, current activities under development include: 

• Working with the IPA/DMA/MCCA on a standard format RFI (request for information) template. 
• Formulating a best practice guide to e-sourcing for marketing activities.
• Developing an RFP (request for proposal) template for digital agency pitches.
• Collaborating with the PRCA on a PR agency evaluation system and updating the PR agency model contract.