Many marketers have moved from media commissions and service fees to retainer based remuneration models. Yet although retainers often provide a minimum of management during the course of the agreement, the can become problematic at renewal or review time, especially if there are reductions in the marketing budget, requiring reductions in the retainer.

Recently these have been highlighted to our clients in a number of ways:

1. Retainer reduction negotiation:
A client had a Retainer based on the delivery of a number of full time equivalent staff (FTEs) of 6.8 to deliver all of the account management, strategy and creative concept work required. There was no defined scope of work other than a loose description of the services to be provided under the contract.

With the reduction in the overall marketing budget of 25%, the client wanted to reduce the agency retainer by the same amount. However, the agency responded that the actual FTE level had been running at 9.18 (supported by timesheets) or 35% higher than contracted and that a 25% reduction in spend and associated work would require a 10% increase in the current retainer and an increase in FTEs to 7.5 to be equitable.

2. Reduction in scope of work:
Faced with 20% in marketing budget year on year the client had reduced the number of projects under the contracted scope of work from 243 to 195 to reflect the 20%. These projects also contributed to a 22% reduction production costs based on the previous year.

However, when presenting the new scope of work to the agency, they responded with a reduction in retainer fee of only 9% as they maintained that the mix and associated complexity of the work included in the new scope was labour intensive and not reflective of the resource reduction required.

Continue reading "Retainers: good to better, better to best" »

Okay, clearly I have been spending too much time on YouTube. The truth is that our Senior Digital Consultant, Russell Easther sent these too me and while at over 9 minutes this video on YouTube is quite long in a marketing world accustomed to 30 second sound bites, there is some great thought provoking material in here on the changing media landscape.

Quite US centric with references to UP-FRONTS and CBS, NBC etc but nevertheless it makes you think and smile and that is not a bad thing.

Most marketers are currently looking at their digital and media strategy. The fact is that they should not be two separate strategies, but integrated into one communications strategy to achieve maximum effectiveness.

The media landscape is changing quickly, but that does not mean one is dominant and the other dead. It does mean that the roles of media and media interaction are changing and the more marketers are able to integrate the two seamlessly into their communications strategy the greater the effectiveness.

Increasingly we are working with our clients to ensure the suppliers they have and their associated remuneration and contract agreements they have with them are aligning all of them to the marketing objectives.

It is no longer either or traditional media or digital, it is both. Yet for marketers who get it right the result is 1 + 1 = 3.

I know everyone is under pressure, but clearly this is having a real impact on marketers around the world, with many facing budget reductions and yet desparately trying to maintain their marketing plans.

Here is a new clip on YouTube that made me laugh, because many of the things marketers believe about their agencies and their remuneration really do look as crazy as they sound when you put them into real life situations.

The fact is, you do only get what you pay for. If someone is offering you a deal that looks too good to be true, it probably is. But if you want to make sure you get what you pay for from your agency call me.

Interestingly, when faced with a huge crisis like the current Global Financial Crisis (GFC) many people, including marketers and their agencies fall back into agency remuneration practices that are tried, tested and familiar, even if they are not ideal.

It reminded me of that quote by Albert Einstein "Insanity: doing the same thing over and over again and expecting a different result"

Or this brilliant clip from Blackadder Goes Forth.

If you want to avoid going insane in trying to manage your advertising agency remuneration, here are five things you could be doing to help you survive the GFC.

Continue reading "Five things marketers can do to avoid going insane" »

I wait with interest for the final release of the AANA’s environmental code of conduct.

The aim is to produce an advertisers guide on how to sell a “Green’ product with a shrinking marketing spend, to a hesitant and fast becoming cynical environmentally aware buyer.
Now that’s what I call a Herculean task.

Continue reading "Green-washing. How to tread carefully on a planet full of environmental land-mines" »

In The Australian Media Section today was an article titles "STW and News promote cuts to working week" the story highlights the trend for many marketing service providers to move to a nine day fortnight to reduce costs.

This is admirable in the current market, unless you have retainer agreements with your clients. In which case, a nine day fortnight for retainer staff without a corresponding reduction in the retainer fee, effectively rips off the client 10% on their fees? How?

Continue reading "9-day fortnights are potentially ripping marketers off!" »

I just got this email from Matt Ryan at Euro RSCG titled "Driving efficiencies at Euro RSCG". It seems that Euro RSCG has discovered that cost efficiency is as important as cost effectiveness.

By finding ways of reducing costs without impacting on effectiveness you are potentially improving cost effectiveness at best and mitigating cost of failure at the least.

For ten years, during the boom years, agencies have often criticised TrinityP3 for finding ways to reduce cost without impacting quality of idea or execution, purely by eliminating waste and inefficiency.

Now reading through the suggestions supplied by Euro RSCG, it looks like at least one agency is doing the same. Have a look and then find out what your agencies are doing to reduce your costs.

Continue reading "Now ad agencies are finding ways to reduce costs" »

How many highly creative ads for planet saving ‘Green’ products do you see being pulled through the city on the back of a truck? Or giant billboards exhorting the benefits of saving electricity while being lit like a Christmas tree all through the night?

Continue reading "Advertising’s role in mitigating climate change" »

I have been using Twitter since the start of the year. Twitter allows short, instant communication between users. Check it out here.

A recent story on news.com.au demonstrates the power of Twitter for brands.

Clearly in this case CBA is searching Twitter to see if people are 'tweeting' about them.

CBA is a great example of how brands can not only monitor, but respond to customers complaints or comments.

Smart marketers are extending this strategy to Blogs (using Technorati to search blogs) and Facebook.

With 4.8 million users accessing Facebook, and the twitter world growing in strength daily, it's only a matter time until Twitter is entrenched in Australian's consumer behaviour. Can you afford not to be across the changing digital landscape?

While some marketers are struggling to develop a digital strategy beyond a few banner and a microsite, the more successful marketers are integrating their digital strategy into their marketing communications strategy.

But to do this you need a very good understanding of the current digital landscape and the opportunity for marketers and their brands.

Ever wondered how the agency finance director can explain an increase in the retainer when the scope of work they are delivering for you in the coming year is falling?

Then watch this.

Well, it makes about as much sense.