A simple way to check your advertising agency fees

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.

Are you are an advertiser, marketer, procurement professional or even an agency manager? One of the key issues that arise on a regular basis is the advertising agency costs and specifically the rates charged.

TrinityP3 has been benchmarking and assessing agency fees and charges for more than a decade and one of the areas of conflict is determining a fair and reasonable rate for those advertising services. This is why we have developed an on-line system called Ad Cost Checker.

AdCostCheckerHomePage

Ad Cost Checker your rates

Imagine being able to enter the agency rates into an Excel file against the pre-defined benchmarks and then uploading the file to a secure website and instantly getting a report back that shows where your rates sit against the industry benchmarks? It is fast, simple and provides an independent benchmark.

The five basic steps are to:

  1. Sign up
  2. Purchase a report
  3. Download the appropriate Excel template
  4. Complete and upload the Excel template
  5. Download and review the report

Beyond the steps required to use the system, it provides the industry with a valuable source of agency fees and rates against which you can compare and benchmark, no matter if you are the buyer or seller. Advertiser, Procurement and Agency can all access Ad Cost Checker to better understand where their advertising agency rates statistically sit against the industry.

Advertiser benchmarking your agency

Your agency fees have been in place for a while and the agency has been hinting that they need to review the fees as they are hopelessly out of date. Actually it has recently become more than a hint, with the discussion becoming a regular feature of the meetings with the agency. But with cost of living fluctuating in recent years between 2% and 3% in Australia, how far out are the current fees? And could it be that some rates have actually dropped with technology innovation and supply and demand?

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10 ways to debunk the digital agency pitch

This post is by Stephan Argent, CEO of Argedia Group and a member of the Marketing FIRST Forum, the global consulting collective co-founded by TrinityP3

One of the chief reasons I’m called in to help with an agency search is around digital. While marketer digital ecosystems can be extraordinarily complex, the search process around digital doesn’t have to be.

Debunking the digital pitch

If your potential or upcoming digital search is keeping you awake at night, here are ten pointers to help you debunk some of the confusion and help you get some shut-eye:

1. It’s the same only different

As odd as it may sound, a digital search isn’t really that much different from any other agency search. Your search and evaluation process broadly follows the same roadmap and the fundamental principles of marketing still apply – except it’s digital – so factor in some variables summarised below.

2. Avoid shiny object syndrome

If you’re contemplating moving forward with a digital search, don’t get caught up in a single idea or technology that overshadows or masks broader digital capabilities. Ideas and technologies will always evolve over time, so try and maintain a big picture perspective.

3. Look for collaboration

Digital solutions can rarely be implemented in isolation as they rely on offline strategies and assets to properly integrate with your overall marketing strategy. Look for collaboration among resources and the ability to integrate with your other marketing partners to help drive delivery on your digital objectives.
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Add your voice to the State of the Media Industry debate

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.

In the past 12 months there have been some very thought-provoking articles published on the State of the Media industry in Australia. Many of these have appeared in Mumbrella and were largely kicked off by a cleverly conceived and well received ‘fictional’ piece by Mumbrella Deputy Editor, Nic Christensen.

What your media agency might not be telling you

State_Of_The_Media_MumbrellaThis was followed up by two more articles related to the topic by TrinityP3′s Stephen Wright and former Principal of Quantium and CEO of Mindshare, Chris Walton.

Have media rebates and kickbacks killed media neutral planning?

How big data will transform media agencies

More interesting is the number of comments these articles generated. We have selected some of these comments to reproduce below. But they represent just a small sample of the people working in the media industry, be it advertiser, media agency or media sales and owner.

Just like Mumbrella, your comments and thoughts will be anonymous. So why not have your say and add your voice to those below?

HAVE YOUR SAY HERE ON THE STATE OF THE MEDIA

Read the comments below and decide if you agree, or disagree or have an alternative point of view. Then come and have your say with the second Annual “State of the Media” survey run by TrinityP3 and MediaScope.

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The media agency rebate debate: Schrodinger’s Cat

This post is by Tom Denford, Founding Partner of ID Comms - a member of the Marketing FIRST Forum, the global consulting collective co-founded by TrinityP3

Are there rebates in the giant U.S. media market? Depending on who you ask, you will likely receive one of two firm responses; “absolutely!” or contritely, “absolutely not!”

Wanted Dead or Alive-Schrodingers Rebate

It’s hard to explain these opposing positions when rebates are widely acknowledged to be part and parcel of the media trading landscape in almost every other country in the world.

Better posts than this will lay out the case for each side, but what I hope to do is deconstruct the confusion and give agencies the opportunity to provide the missing clarity that continues to frustrate advertisers in the U.S.

This is a market where the vast majority of billings are controlled by a small group of media buyers, soon to become smaller. The combined heft of Publicis and Omnicom agencies is, according to Recma, 41% of all advertising spend in the U.S.

The major advertising holding companies have created media trading organisations such as Magna, GroupM, Publicis Media and Opera (the media buying groups within the main communications groups IPG, WPP, Publicis and Omnicom respectively) to take advantage of the principle that aggregated client media budgets create additional negotiation leverage. Why else would they exist?

The important question that hangs over the market now is what form does the reward for that additional leverage take? And if there is a clear reward, how is it distributed to the clients whose billings are being used to create it?
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Global Marketer Week 2014 addresses the big marketing issues

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.

The AANA & WFA Global Marketer Conference on 26 March this year was my fourth WFA Global Marketer Week, and the best. Sure, Beijing, New York and Brussels last year were great opportunities to hear from some of the world’s leading marketers on the issues facing the industry.

GMW2014_Sunita_Gloster_AANA

But to have the event in Sydney made it even more exciting. Meeting up with many of the people and colleagues who I had formed friendships with over the past four years and being able to show off my hometown made the event special.

Although Sydney failed to turn on the blue skies and sunshine (some suggested the English contingent brought the weather with them as revenge for the Ashes over the Summer), the conference at Doltone House, Darling Island Wharf, Pyrmont was a terrific event showcasing marketing talent from here (Australia) near (through Asia) and far (From Europe and the US).

Kicked off by Sunita Gloster, CEO, AANA (seen above) here are some of the highlights of the AANA & WFA Global Marketer Conference.

Purpose and profits for Unilever

MARC_MATHIEU_UNILEVERThe WFA research has shown that purpose is considered as a core focus of successful brands. With Unilever as a global purpose leader, who better to discuss marketing purpose than Marc Mathieu, Senior Vice President, Marketing, Unilever?

Marc presented a number of examples of brand with purpose from the Unilever portfolio including Axe/Lynx and Dove telling the audience that “a brand without a brand is just a billboard”.

This left me with the thought, is it best when a brand arises or has a purpose naturally at its core, compared to overlaying a purpose on the brand? Or doesn’t it matter? The reason being that often brands will adopt a purpose or cause, which can cynically appear to be just a facade to obscure their real motivation.

Making the most of Millennials

MICHAEL_BIRKIN_ACERMichael Birkin, CMO, Acer Inc. then shared the insights his company has developed into the all important millenials (also known as Generation Y). He reminded the audience that by 2018, millennials will have the most spending power of any generation ever, with a global spending power of $2.5 trillion. Therefore brands must be careful in crafting their social messages for the very self-aware millennial generation.

While Michael’s research and insights into the millenials was fascinating, I was more impressed by the fact that 30 minutes into his 40 minute presentation, Michael realised they had loaded the wrong presentation. Ever the consumate professional he powered on.

The Silk Road runs West to East

JAMES_THOMPSON_DIAGEOHeading up a global luxury brand division meant that James Thompson, Global Managing Director, Diageo Reserve was the perfect person to share the the opportunities and challenges of marketing luxury brands.

Despite the recent and continued financial restraint, luxury is still alive and well, and thriving, especially in the emerging markets. There is rise in demand for luxury goods and luxury experiences, such as the House of Johnnie Walker which recently opened in Shanghai, Beijing and Seoul. It is this focus on the emerging markets and the growth opportunities they promise that led James to suggest the Silk Road is thriving today, but that it now runs West to East

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What are the biggest issues facing the media industry?

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.

Much of the media industry appears more interested in deciding who is the best agency /sales team /advertiser with an endless succession of award shows, presentations and conferences designed to recognise the various players.

But the industry continues to face the challenges and issues driven by technology, the economy and the increased complexity of the category.

Last year Denise Shrivell at MediaScope and I organised “The State of The Media Industry” survey to garner the opinions of all parties including advertisers, media agencies and media owners, including their sales teams in order to prioritise the issues and solutions. The results were discussed at Mumbrella360 last year and you can see the discussion here.

State_Of_The_Media

This year it is time to have your say again.

TAKE THE SURVEY HERE

What are the big issues facing the industry?

The “State of the Media” survey gives you a chance to have a say and help prioritise issues such as:

  • Audience Measurement ­ methodologies & standardisation of individual & multi media channel planning
  • Tracking ROI & attribution across media channels ­ proving effectiveness of media campaign activity
  • Recruitment & retention ­- finding, training & retaining quality, relevant people
  • Keeping up to date­ with constantly evolving market trends, initiatives & opportunities
  • Business costs ­ of continually evolving marketing technology & media research
  • Managing an increasingly diverse & siloed agency roster
  • Fragmenting market & increased competition  from other media & channels ie social, owned & earned media
  • Procurement & agency margins -­ finding an effective & sustainable business model
  • Disconnect & mis-communication ­ between client, agency & media
  • Limited scopefor outside the square & new opportunities

Start having your say on the issues facing the media industry here.

What is the industry talking about?

These topics have been headlines in the industry press, not just in Australia, but around the globe, including:

  1. What your media agency might not be telling you – Mumbrella
  2. World Federation of Advertisers says lack of transparency in programmatic trading remains “main barrier” to brand uptake – The Drum
  3. Media Industry Confessions – Digiday
  4. Media trading’s own Libor scandal is coming – MediaWeek
  5. Have media rebates and kick-backs killed media neutral planning? – Mumbrella
  6. WFA Develops First Global Media Transparency Index – MediaPost
  7. Why it’s become very difficult to get a poor media audit review – let alone a bad one – MediaWeek
  8. Is the Government Procurement Service review fit for purpose? – Campaign
  9. Can Agencies Solve The Talent Problem? - Digiday
  10. How big data will transform media agencies – Mumbrella

Add your voice to the “State of the Media” survey here.

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How do your agency rates stack up and why?

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.

There is a common misnomer that the rates for agency hours are simply a cost-based calculation. Therefore, for the same resource such as the Group Account Director, the rate charged will always be the same. This is because the approach of calculating the rate is based on the direct salary cost multiplied by the overhead and profit multiple and then divided by the number of annual billable hours per annum to get the hourly rate. We have detailed this approach here. In fact we’ve built and released a business phone app to make these calculations for you.

What we have also found is that for the same agency, resource could be billed out at several different rates to different advertisers. This is not wrong as the agency has the right to negotiate the rates they recover on their staff. The lower rates are usually delivered through reductions in the overhead and profit margin multiple. What is interesting is what the drivers are of the difference from client to client.

The agency rate benchmark report from the Ad Cost Checker system.

The agency rate benchmark report from the Ad Cost Checker system.

TrinityP3 has been collecting, analysing and benchmarking agency remuneration for more than a decade across all major agency supplier categories including creative, digital, media, design, social and the disciplines within each of these categories including management, account management, strategy, conceptualisation, production and implementation.

In our analysis of the agency rate data some significant trends in agency rate level were identified across the many various types of remuneration arrangements.

Remuneration type

The first major influence is the type of remuneration. Is the rate part of a retainer, with a guaranteed cash flow, or is it a project-based model with no commitment to volume? The guarantee of payment level and cash-flow will usually lead the agency to offer some type of overall discount in the range of 10% to 15% from the non-retainer or project rate.

In some cases this can be seen in the difference between the rates used to calculate the retainer compared to the rates proposed by the agency for the non-retainer work, especially production related costs.

As a matter of principle, we have the view that if the agency is being paid a significant retainer, then it is disingenuous of the agency to charge the client a loading on the non-retained hourly rates. This does happen and happens quite regularly.

Agency size

The agency size, and this is more defined by perception rather than a particular metric such as full time employees, has an interesting impact on the rates that are typically charged. While smaller agencies are usually considered to be more cost effective, this is not always the case. In fact many smaller agencies do not have the economies of scale or the back end efficiencies to maintain or offer lower overheads.

Often the senior management of the agency will have come from some of the larger agencies and will be inclined to recover their salaries at the same levels. This is justified by positioning the senior level involvement as a benefit, but it also sets expectations for the rates the other members of staff are charged.

Agency ownership

The ownership of the agency also appears to impact the agency hourly rate, with independent agencies being at a lower rate than the larger global network agencies. This is usually around 10% to 15% on a like for like basis and correlates well with the typical network rate of recovery from individual offices to cover regional and global operational costs. These are the fees paid by the individual offices in the agency networks and are calculated as either a percentage or payroll.

Obviously independent agencies do not have these regional and global infrastructure costs for recovery.

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Become an effective content marketer in six simple steps

This post is by Craig Hodges, the founder and CEO of King Content, Australia’s most awarded digital content marketing agency. Craig worked in magazines, publishing, internet radio and web development before embracing his true passion – digital content marketing.

As content marketing has become a hotter and hotter subject in both industry press and around boardroom tables, we’ve started to see an influx of the usual negative articles.

Effective content marketer

You know the ones: ‘Content marketing fails’, ‘Your content marketing sucks’ and ‘How to be a content marketing loser’. Ranging from feeble attempts at controversy to full-blown attacks against the idea that content marketing can drive any brand outcomes, these articles consistently decry the ineffectiveness of branded content marketing initiatives.

For me, it harks back to the tidal wave of opinion pieces that came about three years ago regarding the effectiveness of social media. Remember those ones? ‘Your brand shouldn’t go on social media’ and ‘Look at this branded social media failure’. Last time I checked, social media for brands was still a thing, right? Why? Because it works.

Content marketing is no different. It’s been shown time and time again that content allows you to target and engage an audience in a conversation, develop brand affinity and boost SEO and social footprints. The challenge lies in the effective execution of content marketing, which requires strategy and ongoing testing. Unfortunately, a content marketer can’t rest on their laurels once an image appears on a train platform or bus shelter.

So what’s the answer to this swathe of anti-content marketing sentiment?

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No one wants to hire Noddy the account director

This post is by Nathan HodgesTrinityP3‘s General Manager. Nathan applies his knowledge and creativity to the specific challenges of marketing management, with a particular focus on team dynamics and behavioural change.

The traditional pitching process has always created some very clear roles for traditional agency players. The clue is usually in the name.

If you’re a Strategist, or Creative Director, or Data Planner, or Channel Planner, then hey – guess what your role in the pitch is going to be? All the introducing, summarising, topping and tailing is usually handled by the CEO, MD or New Business Director – and sometimes all three when there’s a lot of this stuff to do.

Noddy_Account_Management

The role of account management in a pitch

If you have an account management title, it’s a bit different. Most of your hard work stops outside the door of the pitching room because it’s mostly about making sure the others in your team look good. When you’re inside the room, on the day, you’re often lucky just to get given technical operator responsibilities.

Most of the time, in the pitch, your main role is to nod. You are, in fact, the chief nodder. You nod very hard when a client asks a question. You nod with a knowing smile when one of your team answers it. Over time, you perfect slow nods, fast nods, and even laughing nods. See that picture of Noddy from the Enid Blyton books? That’s you, that is.

The importance of account management

This has always seemed very strange to us. Because of all the members of the agency team on a client’s business, the account management team members are the most influential – the ones with the greatest ability to make or break the relationship and contribute or otherwise to its commercial success.

Yet, in a pitch, most clients hardly test these vital people beyond their ability to pour coffee, connect data projectors and nod. Their view of their management suitability or otherwise is based almost entirely on general chemistry and some kind of sixth sense. So maybe it’s not that surprising when account team members get swapped in and out like a commodity for the first six months of a successful agency’s tenure.

Testing account management in a pitch

So how do you test account management teams in a pitch?
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Top content marketing insights from 6 industry leaders

This post is by Anton Buchner, a senior consultant with TrinityP3. Anton is a lateral and innovative thinker with a passion for refocusing business teams and strategies; creating visionary, data driven communication plans; and making sense of a more complex digital marketing environment.

TrinityP3, in conjunction with Warc and King Content ran a half day seminar on “How to be an effective content marketer”.

How to be an effective content marketer

It was a thought-provoking afternoon attended by over 230 marketers. The proceeds ($6,000) were donated to the Charlie Teo* Brain Cancer Research Trust.

The Content Revolution

Ed Pank, Managing Director, WARC Asia Pacific, set the scene with a summary of the content marketing landscape.

For me, this was the killer statistic that made everyone sit up and take notice:

  • 90% of Australian marketers claim that they are using content marketing, yet most don’t have a formal content strategy. This was reinforced by only a handful of attendees raising their hands to show that they had a content strategy for their business!

Daniel OKeeffe

Ed focused his discussion on 6 key areas:

  1. Be campaign led – create a compelling campaign to tell your brand story
  2. Be social led – generate a groundswell of social interest
  3. Be customer led – focus on consumer benefits and lifetsyle rather than product features
  4. Make your content discoverable – understand the role of search marketing and the technical requirements for ranking organically
  5. Success requires long-term thinking – take a long-term, committed approach, rather than a short-sighted tactical test
  6. Pull, don’t push – invite people into your story for co-creation rather than simply push messaging at them

He presented some great examples including:
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