10 ways the CFO could help their CMO be more financially and commercially successful

This post is by Andrew Reeves, a commercial consultant within the marketing services industry helping his clients develop and grow. His skill set is helping agencies develop the right financial tools including planning, operations and pricing to help realise their potential.

Being a CFO for an agency has often made me wonder whether the same rules apply to running a successful growing business, as it would if I were a CFO on the client side. The qualifications are the same, the remit of growth and control are also the same, the principles of risk and reward, the same.

CFO and CMO Partnership

Perhaps the largest difference is that as a CFO of an advertiser my focus is on the so-called directs of the business. The product itself, how it is manufactured, distributed and sold.

Marketing as an indirect, might not be a core priority for me. Which is a shame, because as David Packard quite aptly observed, marketing is too important to be left to the marketing department.

So ten ways you might support your CMO to align your respective business goals and marketing effort might include:

1. Long Range Planning

Business growth is fuelled by finding solutions to customer needs. Marketing will help inform your business what your customer needs are and how they are likely to change over time.

This will help inform the type of goods and services you produce. Allow your CMO a seat at the top table and quiz him on your customer base over the longer term.

2. Lifetime Value (NPV)

Investment in marketing will deliver over a period of time if done well. Just looking at the annual revenues and costs related to marketing activity is not representative.

Provide your CMO with the tools needed to identify the lifetime value of marketing investment.

3. Amortisation

Continue reading “10 ways the CFO could help their CMO be more financially and commercially successful”

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Managing Marketing: The transformation of the client / agency ecosystem

Managing Marketing is a podcast hosted by TrinityP3 Founder and Global CEO, Darren Woolley. Each podcast is a conversation with a thought-leader, professional or practitioner of marketing and communications on the issues, insights and opportunities in the marketing management category. Ideal for marketers, advertisers, media and commercial communications professionals.

Bruno Gralpois, co-founder and principal of Agency Mania Solutions, named after his book, Agency Mania, chats with Darren on the changing client / agency relationships and the rise of consulting firms who are increasingly acquiring digital agencies to expend their range of marketing services.

bruno

You can listen to the podcast here:

Transcription:

Darren:

Welcome to Managing Marketing.  We’re here in Boca Raton in Florida and I have the great privilege of sitting here with Bruno Gralpois, Cofounder and Principal of Agency Mania Solutions, welcome Bruno!

Bruno:

Thank you, merci!

Darren:

Merci beau coup! Now, the first thing is, when you started your company, I think, was it eight years ago or seven years ago?

Bruno:

Three years ago.

Darren:

Three?

Bruno:

I know; can you believe it?

Darren:

No, it seems like you’ve been doing this for ages.  Anyway, when you named it Agency Mania Solutions, what gave you the idea for that name?

Bruno:

So it’s a funny story because, maybe eight years ago, I wrote the book, “Agency Mania”, so it goes back to that.

Agency_Mania_Book

Darren:

That’s what I’m thinking of, the book was “Agency Mania”.

Bruno:

Agency Mania was the book.

Darren:

And where were you then?

Bruno:

I was at Microsoft.

Darren:

Microsoft, that’s right.

Bruno:

So I spent ten years at Microsoft which is quite a bit of time and so I wrote “Agency Mania”.

The inspiration for Agency Mania which led to us using the name for the company which is Agency Mania Solutions, was that at the time and it’s still very relevant today, if anything even more so, there was a lot of talk in the industry about the mania of client agency relations.

Darren:

Yeah.

Bruno:

And the incredibly challenging nature of those relationships and partnerships. The tension that sometimes exists, but also the incredibly powerful nature of those relationships and what they can accomplish together and all of these were very complicated, fast-moving, changing, complex relationships that were best captured with this concept of mania.

Darren:

Yeah, absolutely. It is almost manic, isn’t it?

Bruno:

I could have called it, “Client Mania”, I chose “Agency Mania” because they already knew what you meant by that.

Darren:

Now you used a word there which is the tension that’s within relationships because you know, I had fifteen years as a copywriter and creative director and it used to amaze me that people would talk about the client relationship as if this is something where we hold hands and skip off to the sunset in love.

For me, the best relationships I had were actually built on respect and there was a tension in it and I used to use the metaphor, “Like the oyster, creativity requires a bit of grit to irritate the oyster so it can make pearls”.

Are you of a similar opinion? Continue reading “Managing Marketing: The transformation of the client / agency ecosystem”

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Technology vendor selection for marketing and IT managers – who to trust?

This post is by Anton Buchner, a senior consultant with TrinityP3. Anton is one of Australia’s leaders in data-driven marketing. Helping navigate through the bells, whistles and hype to identify genuine marketing value when it comes to technology, digital activity, and the resulting data footprint.

technology vendor selection

Are you looking for:

  • software, hardware or cloud based solutions
  • lead nurturing and automation technology
  • location based technology
  • integrated 1st, 2nd, and 3rd party data solutions
  • CRM or single customer view platforms
  • programmatic media solutions
  • tag management
  • digital asset management
  • content management systems
  • back end website development and tech support
  • email or mobile messaging deployment
  • streaming, hosting services or something else?

Market Research firm, Vanson Bourne, and PR Group, Hotwire, have released “The Changing Face of Influence” Report.

The Report is based on surveying 1000 decision makers to help make sense of the way marketing and IT departments engage with media sources when choosing external technology vendors – exploring their habits, preferred channels and the ways they make use of different sources of information to make purchasing decisions.

Whilst most of the Report is pretty generic in terms of utilising social media as channels for vendor research and influence, there were two stats that stood out for me.

  • 50% of decision makers would like to see more impartial and independent commentary being issued by vendors
  • 41% of decision makers say the single biggest change vendors can make is by sharing more external opinion as part of their overall marketing strategy

This points to the confusion in the market at the moment that marketers and IT managers are facing.

Who to trust when it comes to assessing technology vendors?

Who to trust?

I’m sure you’ve experienced it before when sitting through vendor presentations and pitches for your business.

Each vendor sounds “amazing” as they peddle their wares. Promising to “revolutionize” your approach and take your business into the future with open eyes and “frictionless” ease.

However, do you believe the hype?

How can you get a truly independent view? Continue reading “Technology vendor selection for marketing and IT managers – who to trust?”

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Three ways to pay for programmatic media but only one that delivers value

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 much written about programmatic media buying and the remuneration models being deployed. The K2 Report on Media Transparency and Rebates commissioned by the ANA, highlighted the two most popular models being the Disclosed and the Non-Disclosed models. But there is a third more effective remuneration model, which is the Performance Media model.

Programmatic media

Many marketers have told me that in most cases the adoption of programmatic media buying has been at their media agency’s insistence and therefore they often find themselves using the programmatic trading desk that is owned by the Holding Company that owns their media agency.

Often they are also unaware that they have a number of options in regard to remuneration models for paying for these services, with the trading desk proposing a particular model.

From our experience the preference of the agency appears to be the non-disclosed model, or sometimes the choice between the disclosed and non-disclosed. But I have not personally heard of a programmatic trading desk recommending a performance based model.

Lets look at each of these options to see if we can determine why.

Two most discussed models

It is indicative of the preference of the two models that they are not only referred to in the K2 report, but also that in most of the discussions had with media agency leaders the only models they discuss are the disclosed and non-disclosed model.

It’s as if it’s the start, middle and end of the remuneration discussion.

One media agency CEO was explaining that all of their clients who were using their programmatic desk were given the two choices for how they would pay the programmatic trading desk.

On one hand they were offered the disclosed model with, in his words, complete transparency on costs and an agreed agency commission. In this case it was 30%.

On the other hand there was the non-disclosed model were the advertiser would be guaranteed a price for the media that was less than they were paying now, but there was no opportunity for the advertiser to audit the buying.

He gleefully shared that to date his clients had largely chosen the non-disclosed model. I shared this story at the ANA Advertising Financial Management Conference in May this year. But lets consider the issues associated with each of these models.

Disclosed model

Continue reading “Three ways to pay for programmatic media but only one that delivers value”

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Managing Marketing: good agency contracts and good contractual practice

Managing Marketing is a podcast hosted by TrinityP3 Founder and Global CEO, Darren Woolley. Each podcast is a conversation with a thought-leader, professional or practitioner of marketing and communications on the issues, insights and opportunities in the marketing management category. Ideal for marketers, advertisers, media and commercial communications professionals.

Douglas Wood, Partner at Reed Smith LLC explores with Darren the world of the client / agency contract and particularly what is best practice, how the internet is impacting on intellectual property rights, contracting with holding companies and the challenges of trying to develop a global or regional master servant agreement that is actually enforceable across multiple jurisdictions.

Douglas_Wood

You can listen to the podcast here:

Transcription:

Darren:

Welcome to Managing Marketing and we’re still in the U.S. at the ANA Advertising Financial Management Conference.  But this time I have a great opportunity of talking with Douglas Wood who is a partner at Reed Smith LLP, welcome Doug!

Douglas:

Thanks a lot, lovely to be here.

Darren:

I’ve been coming to the conference for eight years and one of the things I’ve always looked forward to is your presentations over the years, because there’s a lot of talk around the legal aspects of advertising and marketing and the complexity that’s come into that.

This year, there seems to be a particular focus on contracts, especially now that ISBA have launched their own contract in the U.S. for media.  But I’m wondering, just to go back to some basics, what makes a good contract?  What should people be trying to achieve or look for in a contract to make it a great contract? Continue reading “Managing Marketing: good agency contracts and good contractual practice”

Posted in agency remuneration / compensation, agency solutions, interesting observations, marketing procurement, Podcasts, strategic management | Leave a comment

Birds of a feather flock together: tips for engaging a new agency partner

This post is by Kylie Ridler-Dutton, Marketing Management Consultant at TrinityP3. Kylie is a discipline neutral specialist with consulting and implementation experience spanning across retail, alcohol, utilities and telecommunications.

We have all heard the adage birds of a feather flock together, meaning that the company you keep reflects your personality. A smart person surrounds himself with other smart people:

Surround yourself with the dreamers and the doers, the believers and thinkers, but most all, surround yourself with those who see greatness within you, even when you don’t see it yourself .

Edmund Lee

new agency

Unfortunately, as we go through this time , we realise the people we once counted on are no longer the people we once thought they were. Being guilty by association is another saying which extends the birds of a feather concept but this time with negative overtones.

The external observer will quickly associate your behaviours and thoughts with the people you hang out with. If your friends act in a negative way, you too will be bracketed unfavourably by association. Although this may not be true, it is all based on perception.

Regardless if you believe yourself to be an altruistic person, a time may come when your bad company starts to influence your good behaviour.

All too often this is the premise of the start of the conversation we as consultants at TrinityP3 hear when asked to discuss a pitch with a client: The agency started out all shiny and new and their reputation seemed to stack up, so what happened? Continue reading “Birds of a feather flock together: tips for engaging a new agency partner”

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Do great client agency relationships deliver great performance?

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.

“Great client / agency relationships deliver great performance”

You hear this said all the time by agencies, consultants and advertisers. It is like a mantra. But when there are millions and even billions of dollars at stake, is it a mantra that needs to be examined in more detail, rather than simply taking it at face value?

Client agency relationships

Superficially it makes sense that in a business relationship that is influenced so heavily by the interaction between the stakeholders involved in developing strategies, concepts and executions, the better the relationship the better the performance and outcomes of those relationships.

Before I go any further, let me declare that at TrinityP3 we have developed a relationship performance measuring system called Evalu8ing. This system is used to not just measure client / agency relationships, it is designed to measure the performance of the multiple relationships clients have with their roster of agencies including the levels or co-operation, co-ordination, collaboration and trust.

But we have had experience working with clients who have been using one of the major systems available, with varying success. That’s the point, if great relationships were the key to great performance then why aren’t all advertisers using these various relationship systems achieving great performance?

How do you manage a client / agency relationship?

Continue reading “Do great client agency relationships deliver great performance?”

Posted in agency solutions, Evalu8ing - Relationship Performance Monitoring, marketing process optimisation | Leave a comment

Why adjusting an agency scope of work requires careful consideration

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.

An advertiser recently called with an issue that had lead to a dispute with their agency. The advertiser had a 30% cut in their marketing budget due to falls in sales and they had tried to negotiate a significant cut in the agency retainer to reflect the cut in the budget and hopefully a corresponding cut in the scope of work (but more on that later).

Agency scope of work

The agency had refused any cut in their retainer on the basis that they had recruited a number of resources specifically for the account and they maintained it would be unfair to cut the retainer as this would require the agency to terminate some of these resources as they could not be redeployed within the agency.

The advertiser maintained that as they were cutting the marketing budget the agency would need to do less work and therefore would require less staff and therefore the retainer should be cut.

Who was right? And what are the considerations when needing to make changes in the scope of work?

Retainer agreements

The traditional retainer was designed to retain specific resources to work on the account.

This is simply a number of resources that may or may not be linked to a specific number of projects and project types. Those resources are dedicated to the account and are on hand when required. It is up to the marketer to ensure there is enough work to keep those resources gainfully occupied to ensure there is value delivered from the retainer.

If the retainer is not specifically linked to a number of projects and project types then there is no contractual reason for reducing the retainer just because the spend is reduced.

But what if there is a scope of work specified as part of the contract and the retained resources are linked to this scope of work

Does this mean that if the required scope of work either decreases or increases then the retainer should increase or decrease? Continue reading “Why adjusting an agency scope of work requires careful consideration”

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Your media agency could not possibly be ripping you off, they are so nice

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.

Advertising is an incredibly social occupation. People are outgoing and friendly. In 15 years of agency life I worked with hundreds of people in five agencies. Plus the many hundreds in the associated agencies we worked alongside, and the many clients as well.

Media agency ripping you off

It was a combination of the type of people attracted to marketing and advertising, plus the periods of intense pressure along with some serious partying. Who doesn’t love an agency Christmas Party or an Award night!

I think it is the same for everyone involved, agency and advertiser. You form intense friendships while you are working together – relationships where you can rely on each other. They rely on you to cut them some slack, then when needed, you rely on them to take up the slack to get you out of a bind.

You become friends not only at work, but also outside of work. You even become friends on Facebook.

These are friends, so when you hear that they could be potentially making a huge profit at your expense, such as revealed in the ANA commissioned K2 report into media transparency, then it would be hard to believe. After all, friends do not rip each other off.

So perhaps you ask them if it is true and they look you in the eye and tell you it is not true.

So what do you do? Continue reading “Your media agency could not possibly be ripping you off, they are so nice”

Posted in agency remuneration / compensation, agency search & selection, industry news & trends, marketing procurement, media planning & buying, social media & digital marketing | Leave a comment

Why Media Planning and Buying is like the ancient game of Go

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.

Reminiscing about the good old days of media appears to be increasingly popular in the face of the Media Rebates controversy. The media ‘old timers’ fondly talk about media before programmatic, trading desks and even digital, when it was simpler and easier to manage.

But I believe media is like the ancient game of Go. You know the strategic game played on a board with black and white stones? If not the rules are defined here.

Media planning and buying is just like Go

The thing about Go is that it is a simple game to learn to play, but you can spend a lifetime trying to master it. Media is the same in that people are inclined to believe that because they understand how media planning and buying works, then that is all they need to know.

Let me explain.

The simplicity of Go

Go is a game that is more than 3,000 years old and originated in China, but the name itself is Japanese. The game has wide appeal and is played by 5 to 90 year olds. From the British Go Association, the rules of Go are:

“A game of Go starts with an empty board. Each player has an effectively unlimited supply of pieces (called stones), one taking the black stones, the other taking white. The main object of the game is to use your stones to form territories by surrounding vacant areas of the board. It is also possible to capture your opponent’s stones by completely surrounding them.

Players take turns, placing one of their stones on a vacant point at each turn, with Black playing first. Note that stones are placed on the intersections of the lines rather than in the squares and once played stones are not moved. However they may be captured, in which case they are removed from the board, and kept by the capturing player as prisoners.

At the end of the game, the players count one point for each vacant point inside their own territory, and one point for every stone they have captured. The player with the larger total of territory plus prisoners is the winner”.

The simplicity of media

Continue reading “Why Media Planning and Buying is like the ancient game of Go”

Posted in industry news & trends, marketing process optimisation, marketing procurement, media planning & buying, mobile marketing, return on investment, social media & digital marketing | Leave a comment