The financial negligence demonstrated by creative agencies in production

This post is by Darren Woolley, Founder of TrinityP3With his background as analytical scientist and creative problem solver, Darren brings unique insights and learnings to the marketing process. He is considered a global thought leader on agency remuneration, search and selection and relationship optimisation.

One of the most common causes of frustration for marketers with their creative or content agencies is the cost of production. While cynically you may think this is good for consultants like TrinityP3, it is incredibly damaging for the relationship between the marketer and their agency, especially to the issue of trust.

In the past six months we have been called in to assist with productions where the cost of production is two or three or more times the budget allocated by the client. This usually occurs within the critical timeline before the on-air date and is a time of pressure and stress for all involved. Beyond how to resolve this situation is how did the agency get the marketer into this situation and how can we ensure it does not happen again?

Agency_FailureTo demonstrate the problem and solution, here is a case study where the names have been changed to protect the guilty and the incompetent.

(Italics indicate the problems and offers a solution).

The briefing

The marketer briefed the media and creative agency on an advertising campaign for a product / brand in the portfolio. This was activity that had been scheduled on the annual marketing plan. The brief was running late and so the agency went straight to work on developing the reverse brief and concepts.

In this case the marketer did not provide a production budget or any indication of the level of investment at all. When talking with the agency it was asked on what basis did they develop the idea in relation to the cost? There was no answer. Could you imagine any other ‘professional’ like an architect or a lawyer starting any project without a clear understanding of the budget? I don’t think so.

The concepts

The agency developed a concept and presented this to the marketing team. In the meantime the media strategy and plan had been developed and while the campaign was primarily driven by television there was a requirement for other ‘support’ media including outdoor and digital.

This project is already spiralling out of control. It was briefed late and so the agency should have taken control and developed a timeline or schedule for concept development, approvals, research and production and held the marketers to this, defining the costs of missing any of the key milestones. But instead it is already meandering along towards disaster.

The creative concepts were reviewed and feedback provided and the agency asked to develop further concepts. Further concepts were developed as weeks ticked by.

I am always amazed that at this stage the agency producer was not engaged. They are the production experts within the agency and yet the agency doesn’t get them involved in managing the process until concepts are often approved and the timeline is too tight to be cost effective.

The approval

A concept and scripts were approved by the brand manager, with changes before presenting to the marketing manager. The marketing manager approved the scripts with changes before presenting them to the marketing director. The marketing director made changes before approving them and the concepts were sent to regional for approval. Then the concepts would be placed into concept testing research and so animatics were required.

Without the agency timeline or flagging the shortage of time the marketing team fell straight into their usual (an hugely inefficient way) of obtaining feedback, approval and consensus.  This approach is fragmented, time consuming and often has the agency running around in circles trying to appease each person in the process. Collective wisdom is the best approach so either get everyone’s feedback and provide it at once or simply get the feedback of the only person who can approve the script.

Time was already short for production, but now it had become critical.

The quote

Having come out of research without any major changes the agency briefed production houses who prepared quotes and treatments in five days. The quotes were reviewed by the agency and then presented to the marketers. It was almost three times what the marketer had paid previously and what they had allocated.

Of course it would have been hugely helpful if the marketers had told the agency the budget. But then why did the agency commence work without knowing this important fact?

In the meantime the media had come back and informed the client that the media budget could not support the number of 30 second commercials briefed and one 30 second and two 15 second versions would be ideal.

The creative agency began the process of developing 30 second versions of the scripts for the film company to re-quote. Not surprisingly the proposed cost of one 30 second and three 15 second versions was only marginally less than the original requirement of three 30 second and three 15 second executions.

When there is no time to get the production made, there is certainly no time to negotiate and so the marketers were paying top dollar although the agency was swearing black and blue this was not the case. Developing a timeline at the time of briefing allows enough time for approvals and negotiations.

The marketers asked the agency to go back to the production company to reduce the cost. The agency said that at six weeks to on-air it would be almost impossible to deliver the production as it was and finding an alternative was also impossible.

Here is why time management is not a high priority for many agencies. With just six weeks to on-air the imperative becomes getting the spot made ‘at any cost’. That is the point. The time pressure and the consequences of not meeting the media on-air deadline outweigh the additional 200% above budget the agency delivered.

The marketer then called TrinityP3.

The outcome was not pretty. The relationship with the agency was damaged. The marketers suddenly realised that this whole time they had been wasting money and yet the agency they relied on to look out for their best interests had continually stood silent and blamed the production industry, blamed the lack of time and blamed  everyone but themselves. 

Have you experienced similar disasters? Let me know with a comment.

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About Darren Woolley

Darren is called a Pitch Doctor, Negotiator, Problem Solver, Founder & Global CEO of TrinityP3 - Strategic Marketing Management Consultants and a founding member of the Marketing FIRST Forum. He is also an Ex-scientist, Ex-Creative Director and a father of three. And in his spare time he sleeps. Darren's Bio Here Email: darren@trinityp3.com
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4 Responses to The financial negligence demonstrated by creative agencies in production

  1. Shirley Kirkwood says:

    Great article Darren and the agency / marketer in question are certainly not Robinson Crusoe, nor is it restricted to just TV production. What happened to their process, procedures, responsibilities and accountabilities?

    • TrinityP3 says:

      The agencies seem to think it is the marketers responsibility. The marketers think the agencies will operate in the marketers best interests. Neither has the process or procedures to handle this. And in the short term the agency gets an advantage, but I believe in the long term it leads to a breakdown of trust. Except the fact that marketing staff turn over as fast as agency staff and so the relationship grinds on in spite of the poor practices and processes and procedures. Do you agree Shirley?

  2. Lindsay Hocking says:

    Hi Darren…

    As you've indicated, getting TV commercials produced on time and on budget isn't rocket surgery, it just needs proper process and discipline, which means bringing in a Producer as early in the creative process as possible.

    Regrettably, many agencies think they can do it themselves with just the help of the Production House, but fail to comprehend the simple fact that the production house is a creative business that will attempt to protect its levels of creativity and profit first, then look after the agency and their client next.

    But it's a tough business out there, with a small amount of work available to be shared around, so most Production Houses will try to not lose the job by fighting back too hard, and often over-sharpen their quoting pencils in order to appease the agency, who in turn is trying to appease their client. The end result is never in the best interests of anyone.

    Having been a Producer of TV commercials for some forty years, both in-house and freelance and with big and small agencies, I've often found myself in the position you described as TrinityP3 encountered, and had to pull rabbits out of hats (and other places) in order to save a production that has spiralled out of control… and as you say, sometimes it ain't pretty.

    So why is it that agencies persist with this attitude of not wanting to bring in an independent Producer?

    The reasons most-often told to me are that they feel that it's an expense they can avoid, and/or don't want their creative work challenged by someone from outside bringing creative ideas to the table. Yet in most instances, a Producer will more than save their fees by making the production more efficient and help the agency enhance their creative result.

    From the other side of the fence, I've had Production Houses welcome my involvement in the process, because they know that without proper control on both the agency's and their sides of the production, they risk taking a financial bath in order to get the job out.

    In a recent instance, the best Production House for a particular job didn't want to make it because, as they said, "We'd love to do it, but we've lost money on the agency's last two productions and we don't want to go broke by taking this one on." Fortunately, the agency gave me the control necessary to run the production on their behalf, the Production House came on board as a result, and the job came out on time and budget.

    Once upon a time, having an Agency Producer on board was par for the course, and many of the larger agencies either had Producers in-house who had come into the advertising business from the production world, or would bring in a Producer of this type.

    As a result, productions generally ran smoothly, the creative teams would consult with the Producer before submitting concepts, to make sure the idea could be delivered within the constraints of the budget, both the agency and Production House would make a buck on their commercial production, and the clients got great value for money.

    But, sadly, somewhere along the line, agency and client bean-counters who couldn't see the benefits of production-savvy Producers, gradually had them trimmed out of budgets and they mostly disappeared, to be replaced by a junior "Producer" who knocked together the quotes supplied by a Production House that had been briefed by a creative team with no regard for anything but, "How great can we make it look, so that we can enter it into the awards?"

    Thus the whole system began to erode, and has slipped into such a tragic state of decay that it requires people like your and your team at TrinityP3, Darren, to come in and pick up the pieces.

    • TrinityP3 says:

      Hi Lindsay, thank you for your thoughts and observations on the industry. It is true that there has been a loss of knowledge in the industry, but there is also an increased focus on accountability and transparency in the process. These are issues which need experienced practitioners to deal with. The other problem is that when a agency producer is involved they are often bought into the project too late, as you say. If agencies want to be seen as a trusted 'partner' to their clients they need to demonstrate a due diligence with their clients budgets, which is the cases we see is sadly lacking. I do have to remind myself that we often see the worst case scenarios as we are bought in because their is a problem – perceived or real – and that in fact there are also a large number of productions that are delivered on time and on budget.

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