When should a CEO throw their CMO under the technology steamroller?

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.

Technology is changing everything – how we communicate, how we shop, how we travel, how we are entertained, how we network etc.

I am sure you have heard the observation that today the world’s largest hire car service owns no cars (Uber), the world’s largest accommodation brand owns no properties (Airbnb), the world’s largest media network creates almost no content (Facebook), and arguably the world’s largest retailer has no stock or stores (Alibaba).

It is therefore natural that it is having a huge impact on a business function as essential as marketing and sales. Yet time and again we hear of businesses and marketers being caught unaware by technology.

And this is what happens….

But how can the CEO tell if their CMO, General Manager Marketing, Marketing Director or Marketing Lead needs to be thrown under the technology steamroller to save the company?

Here are five things the CEO should question his marketing lead about:

  1. Do you have a marketing strategy and plan aligned to the business objectives?

Too often the marketing function will appear to operate almost separately to the objectives and the strategy of the business. Marketing needs to be aligned with the overall business plan.

To be able to achieve this, marketing needs to be included in the business planning process and have a clear understanding of their role and responsibility in delivering the outcomes required.

If your marketing lead is not able to show how the marketing plan is aligned to the business, it could be because either they are not integrated clearly into the business, or it could be because they are not the right marketing lead for your organisation.

  1. Does this marketing strategy and plan support all aspects of the business?

The role of marketing is to create and manage the customer experience. (Marketing is not just advertising and communications). That does not mean they deliver the customer experience. It means they co-ordinate and collaborate with all aspects of the business that interact with the customer including call centres, sales, retailing, online, channels and the like.

This means that marketing leads need to be expert collaborators with all areas of the business to ensure a consistent customer experience leading to delivering the desired outcomes and objectives.

If your marketing lead is not liaising and co-ordinating with all areas of the customer interface within your organisation it means they are working in isolation and it is likely underperforming in their contribution to the revenue results.

  1. How is digital technology integrated into the plan to enhance the customer experience?

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Why a CMO engaged TrinityP3 for a digital team transformation – Case study

Client Category – Media brands

Challenging problem:

A leading Australian CMO was looking for an independent and objective assessment of the effectiveness and efficiency of a digital team including SEO, paid performance, programmatic media planning and buying, social media, content marketing, data analytics, digital technologies, third party systems, and campaign reporting.

Digital-transformation

Solution:

The Marketer engaged TrinityP3 to assess the:

  1. level, mix and capabilities of current resources
  2. current processes within the organisation, across multiple divisions, and externally with their media agency
  3. efficacy of the systems, tagging and measurement in place.

TrinityP3 unearthed through a series of one-on-one stakeholder interviews that the current approach to digital marketing was highly inefficient. The digital team was acting as a silo unit and lacked cohesion within the business.

This meant that a full restructure and reassessment was required in order to establish common standards, structures and a greater focus on Digital Marketing KPIs.

Process:

To provide this independent assessment and benchmark, TrinityP3 implemented a 3-stage approach:

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Why your media agency should love to give you value and not just drive down costs

This is a guest post by Claus Schiko, Procurement Category Manager, Media & Marketing at Pandora, Demark. Claus is a respected professional member of the media community with 20+ years experience working for some of the industry’s biggest companies.

Race to the bottom

The race to the bottom has been talked about for years. And some advertisers are already there. The costs cannot really get much lower without the media agency having to pay the advertiser for actually booking their media space. Still the advertiser is pushing for more, because the CFO/CEO is looking for “easy wins” and is not willing to pay for it.

skydivers jumping out plane

What is the real cost of driving down pricing and fees?

Here is what the media agency starts to do when the client starts pushing just to drive down pricing and fees:

  • They find better ways to make money on your media spend. And you are not completely aware of how (Inventory trading, trading desks, non-disclosure agreements etc. etc.)
  • They put less experienced (and therefore less costly to them) people on your account
  • They stop caring about your business and goals
  • They don’t work as hard to ensure you have the best in class across technology, ideas, pricing etc.

So, if you know this can/will happen why do you still do it as a client / advertiser?

Because you have been led down the path of thinking that “cheap” is equal to good. You think that because you are being squeezed by your distributor / CEO / CFO or anyone else, that you have to prove a saving rather than have an honest discussion with your media agency about what can drive value on other fronts.

Yes, getting better pricing will lead to more people becoming aware of your brand / product and hopefully that will lead to sales. We talk about innovation, but no-one actually rewards a media agency for coming up with a truly innovative idea. Why not?

If you pay peanuts, you get monkeys

P&G announced that they would make 500 M USD through agency cutbacks.

While the sentiment may be real, such a statement should make any agency pitching the media business think twice about going for it.

At Pandora we go for value over cost. While the overall cost should of course be in line with industry and category standards, we prefer to get more out of our agencies by driving value.  At Group Procurement at Pandora, one of our main objectives is to work with “the best performing suppliers in the industry”. This can only be done if we allow them to prove it.

James Goldsmith once said “If you pay peanuts, you get monkeys”. So why would you go down the line of paying the absolute minimum? You therefore do not get the top pick of the talent pool that the agency have. And we know that monkeys will do almost anything for peanuts.

I am not making this statement lightly; I have worked for agencies that have thought that way. And still do.

So where does that leave us as advertisers / clients?

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Managing Marketing – Journalists, confidentiality, PR and pitches

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.

Nic Christensen, Deputy Editor of marketing news site, Mumbrella, shares his thoughts on how well or perhaps how poorly agencies and marketers engage with journalists. He and Darren discuss the role of journalists covering a profession like marketing and also the concept of commercial confidentiality when it comes to the trade media. 

NicC

You can listen to the podcast here:

Or, follow Managing Marketing on Soundcloud or iTunes.

Podcast transcription

Darren:

So I’d like to welcome a friend and a colleague, Nic Christensen who’s the Deputy Editor of the Trade News site, mUmBRELLA, welcome Nic.

Nic:

Good to be with you Darren.

Darren:

The reason for wanting to catch up with you, is that in any industry there’s a number of different groups, obviously we’re marketers, procurement, agencies, but then the media, journalists and the trade media of which you’re a significant player, all have to actually find ways of working together. And so I thought it would be great to have a bit of a chat about the way people do it well and the way they don’t do it well.

Nic:

I think people are generally interested in this area ’cause it’s one that confounds a lot of people be they marketers, agencies or whoever.

Darren:

One of the things I’ve noticed Nic, compared to other markets like say the U.K. and the U.S., is that Australian marketers generally don’t seem to appear to be comfortable being in the trade, you know, in the media. Would you think that’s a reasonable observation? Because you’ve just got back from New York haven’t you?

Nic:

Yeah I have and look, what can I say about the Australian market? I’d say there are a number of people who love the spotlight and who are very good and cultivating.

Darren:

Oh thank you.

What do you stand for? What does your brand represent?

Nic:

We can say that. There are people like yourself who do like the spotlight and who are definitely out there and who have opinions.

I think it’s about this. I think it’s about whether or not people are willing to stake something in the ground and say, “This is what I stand for or this is what my brand represents”, more about themselves, their agency, their business.

And then there are a whole lot of people who know that the spotlight is important, they know that they have to be out in the market, they have to be projecting themselves.

Certainly when we get to things like not an annual book, but we do one every two years, we do a book reviewing and all the agencies and a lot of the bosses at the time they complain to me going, “Oh yes we’ve got a great product, we just don’t talk about it enough, we’re just not very good at selling our brand”. And I’m always like, “Well hang on, isn’t that what you do every day? You sell other people’s brands and what does it mean for marketers when you can’t sell your own brand? Why would the agency appoint you?”

And I think there’s a direct relationship between people who are doing well commercially in business etcetera and the people who are actually out there pushing their message.

Now it’s not to say there aren’t people working quietly, it’s not that they don’t matter but if you’re working in the professional communications industry and engaging the media in good times and in bad, – because invariably staff will leave, you’ll lose an account – there will be times when you will need us in some way, shape or form and I think it’s good to actually have a constructive relationship with the trade press.

Darren:

So what you’re really focusing on from my perspective is the agencies and the agency’s ability, because agencies really do need to differentiate themselves and they really struggle with that don’t they? They really struggle with the ability to communicate their brand and their brand benefit.

Nic:

They do but marketers also struggle with this, we should cover them as well. But if we’re just talking about the agency construct, there is definitely that case.

It’s a very competitive landscape, probably too competitive. There are probably too many agencies out there and everyone’s chasing new business. How do you differentiate yourself? How do you get on the shortlist?

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Why the media agency ‘Mediapalooza’ could be a huge waste of time

This post is by David Angell, General Manager of the fast-growing Melbourne market, and national Head of Media at TrinityP3. In these roles, David brings his media-specific, broader commercial and relationship expertise to bear on a diverse range of projects, with one core objective – achieving beneficial results for our clients.

Do you watch soap operas? Of course you don’t, you’re all busy executives with crippling workloads. But I bet most of you can remember them from younger days.

Media agency Mediapalooza - Deck chairs on ship

Whatever the soap opera, for purposes of viewer entertainment and retention, obligatory partner-swapping always featured heavily in the storylines.

Pretty much every character would be romantically linked with every other character at some point. Whenever a new affair broke, I would think the same thing.

Why on earth does Danielle want to be with Phil? Yes, she left Egbert because he was unfaithful with Dora. But didn’t Phil already cheat on Libby and make Simone pregnant?

Aren’t you all just running into the same potential problems all over again?

Maybe I was over-thinking things a bit back then. But I have to admit, when I look at the much-hyped ‘mediapalooza’ currently doing the trade press rounds, it does feel a bit like the obligatory partner swap.

A quick disclaimer. At TrinityP3, whilst we are involved in some current and forthcoming pitches across a number of disciplines, we aren’t involved with any of the global, reported media pitch events taking the world by storm.

But what I will say is, that across the last six months I have counselled more than one client of a media agency as to why they shouldn’t go to pitch – at least, not yet.

The mediapalooza (a term coined by Adweek in the US) has been touted in various quarters as a reaction to recently reported transparency issues and downgraded stock ratings of some of the big players; or as a domino-effect as the big players try to keep up with each other in securing the best agency talent; or as the watershed time that will prompt agencies to completely change the way they go to market.

But (and here’s where I’ve focused some elements of my counsel) if, in any individual case, the client’s basic approach to market is not really going to alter, what on earth can be expected to really change by choosing another partner?

So, this article is speculative

I can’t pretend to know the inner pitch workings at play in the mediapalooza camp. But years in the game tell me, with a weary degree of cynicism, that the likely outcome, in reality, will be like a joke that begins ‘three men walk into a bar’ – the end result will unfold with a tedious and predictable inevitability.

Just to give this comment some validation, here’s MediaPost, referring to the Mondelez pitch: ‘The issue isn’t performance-related, the client indicated, but rather about an opportunity to gain efficiencies that can be re-invested to drive further growth.’

And here’s MediaPost again, talking about P&G: ‘Word of the review comes about three weeks after P&G executives signalled that they would be looking aggressively for ways to make the company’s advertising and marketing program more efficient, with plans to save $500 million annually going forward.’

Doesn’t exactly suggest a new approach that will stamp out nefarious agency practices, improve the quality of output, maintain the best talent and change the way in which they work, does it?

If any of the following is happening in the palooza-linked pitches, the whole exercise will be a huge waste of agency time and client time; it will not increase agency or marketing performance for the client beyond a honeymoon period; the ‘efficiency gain’ or cost saving will be a mirage at best; it will not address any of the so-called ‘transparency issues’ – in fact, it may serve to increase them; and ultimately, it may well end up costing some people their jobs.

1. How can a balanced and holistic evaluation approach be achieved…

… if the client continues to predicate choice of agency on cost and rate, instead of a balanced approach assessing value?

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Is marketing procurement an investment or an insurance policy?

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.

Earlier this year I took a conference call from the procurement team of a potential client. They wanted to discuss if we could benchmark their media agency fees in one of their particularly large markets. After the initial introductions and discussions on the project, one of the procurement team asked how much we could save them on their current agency fees.

I responded that it would be impossible to know if there were any savings, or what size of savings were possible until we had reviewed the current fee, resource model, resource mix and scope of work. Confused they told us that one of our competitors had already confirmed they would save 10% off the current agency fee and that their fee would be half of the savings.

After confirming I heard correctly, I offered to save 100% of the agency fee (effectively wiping the agency fee off the table) if I was to be paid half of that amount. Excitedly the procurement team asked me if I could. I answered, “I could, but I won’t”, and hung up.

Are You Covered? card with a beach background

Marketing procurement as an investment

I personally know of three companies who, over the past six years had built a marketing procurement specialist function in their business, only to dispose of it after three years. The reason is that the premise of the marketing specialist function was simply to reduce costs. Typically this means in the first year the procurement team focus on the ‘low hanging fruit’ in the marketing spend. They look for consolidations and use negotiations to drive down costs.

In the second year, depending on how they went in the first year, they cut deeper into the core agency fees and continue a process of consolidation to drive further savings and cost reduction. By this stage the marketers are tired of the constant disruption to the supplier roster.

In the third year, the procurement team is struggling to find further savings and because their existence is predicated on their ability to deliver a return on the cost of their activities, they soon become no longer financially viable and the team are redeployed elsewhere.

Of course the easiest and fastest way to cut marketing costs is simply to cut the marketing budget. It costs nothing and the marketers will be still held accountable to delivering the marketing plan within that budget.

Marketing procurement as an insurance policy

From day one we have seen our role as an insurance policy for marketers, advertisers and their organisation. We use analysis and benchmarking to provide reassurance that the current marketing model is functioning at the optimum level against the business and marketing strategy. And if it is not, then we can identify not only the cause of the underperformance, but can project the financial benefit as cost reductions.

Our approach is to firstly identify how efficiently and effectively the current marketing function is operating and especially at the interface with external suppliers.

We do this by building a financial model of the current structure and identifying internally (within the organisation) and externally (outside with third party suppliers) any excess, duplication, bottlenecks, waste and mismanagement. We look for how the various parts of the model compare to the numerous benchmarks we have collected and developed over hundreds of marketing organisations.

Cost reductions and savings are delivered where we have identified excess, or where duplications, bottlenecks and waste have been eliminated; we can adjust cost and deliver savings to the business. In this way we can guarantee a continued output of quality and effectiveness for the marketing function.

What we cannot do is simply deliver cost reductions without undertaking the appropriate analysis first.

An example of the two approaches

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The moving target of online marketing and eCommerce

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.

Today, Taking Care of Business (TCOB), one of the few dedicated radio business programs focusing on big and small businesses, is coming to you LIVE from Bayside Chrysler Jeep Dodge, Frankston, Melbourne.

TCOB Host is Jacki Mitchell, an international award winning brand, marketing and business strategist with a diverse track record that allows her to draw on a wide range of experiences across several industries. Jacki was awarded with Best New Presenter for 2013 at the RPP FM Annual General Meeting.

Online-Marketing experts with Jacki Mitchell

‘Taking Care of Business’ with Jacki Mitchell (host), Grant Arnott (co-host) and Darren Woolley (co-host).

Topic of the day – Online marketing and eCommerce

It’s Friday and once again I have gladly flown from Sydney to Melbourne to help co-host Jacki’s show, alongside Grant Arnott, Managing Director of ‘The Media Pad’ and specialist ecommerce content provider. In today’s show we share ideas, strategies and advice gleaned from our own experiences with online marketing and eCommerce.

In this 48-minute episode of ‘Taking Care of Business’, you will learn about:

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Implementing an output-based cost marketing model – Case study

Client Category – Multinational Corporate

Challenging Problem:

The client’s marketing function was decentralised and operating across eight different business divisions. Budgets were fragmented, processes were inconsistent, and multiple campaigns and initiatives were being created independent of each other. The marketing effort involved more than 120 marketing FTEs working with an agency roster of almost 100.

Escalators

Creative Solution:

Over the course of the engagement, TrinityP3:

  1. Identified the main marketing requirements of the organisation, matched these to the existing skill sets across the marketing teams and recommended key structural changes
  2. Created, developed and helped to implement a partially centralised marketing structure which still allowed business unit flexibility where required
  3. Designed and implemented a uniform campaign development process, including an Engagement Agreement across all marketers and key agencies
  4. Benchmarked the FTE levels required to manage the marketing activities effectively, and worked with HR to implement changes
  5. Developed and implemented an output-based cost model for all campaign elements and collateral deliverables
  6. Managed the reduction of the agency roster from 100 to 15, designed and introduced a clear working model for the new roster, and ensured that all agencies understood their roles, areas of expertise and responsibilities
  7. Introduced a print procurement methodology and managed a tender process to reduce printing costs by more than 25%

Timeline:

The work was completed over ten months.

Results and feedback:

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Managing Marketing – Storytelling in business and marketing

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.

Shawn Callahan, founder of Anecdote, discusses storytelling with Darren and how it is applied to business, marketing and advertising. Shawn shares some of his observations on where often marketers and their agencies get the storytelling concept wrong and questions the merits of story-doing, the latest trend in the advertising industry.

ShawnC

You can listen to the podcast here:

Or, follow Managing Marketing on Soundcloud or iTunes.

Podcast transcription

Darren:

Excellent.  So, welcome, I’m here with Shawn Callahan who is the founder of Anecdote, which specialises in stories for business.  How are you Shawn?

Shawn:

Hey, good to be here.

Darren:

Shawn mate, it’s great to catch up because it’s been quite a while since we’ve had a chance to sit down and have a chat.

Shawn:

Yeah, I know! It has, hasn’t it?

What’s the difference between stories and narratives?

Darren:

But, I think the last time I talked to you about stories was when I sent you a text recently. I was at a conference and there was someone on stage talking about the difference between stories and narratives.

Shawn:

Yes.

Darren:

And I shared that with you and I loved the comeback that you did on Twitter. Do you think that people have a clear idea about stories and narratives and archetypes because they get thrown around a lot, especially in marketing?

Shawn:

Yeah, I think one of the things I’m noticing is large organisations immediately equate story with performance. You know, you have to make this performance. I heard about one organisation just recently who taught each one of their executives to tell their personal story and then link it to the company.

Darren:

Oh no.

Shawn:

Yeah.

Darren:

You become the company man.

Shawn:

That’s right. And every time I hear that, I think it just comes across as very forced. They’re working too hard.  I reckon business story telling works best when it’s invisible.

When you’re sitting there and you’re a customer, you’re just engaged. They’ve just told a little story about the work that they’ve done with a big company in New York or something like that and you’re inferring all these things about that person, but you’re not sitting there going, “Oh, that’s a great story”.

Stories are just a natural part of conversation

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Is market research worthwhile or a waste of time?

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.

International award winning brand, marketing and business strategist Jacki Mitchell hosts ‘Taking Care of Business‘ every Friday, LIVE in the RPP FM studio.

Jacki has a diverse track record that allows her to draw on a wide range of experiences across several industries. She was awarded with Best New Presenter for 2013 at the RPP FM Annual General Meeting.

‘Taking Care of Business‘ is one of the few dedicated radio business programs that focusses on all businesses large and small.

'Taking care of Business' - Simon Edwards , Jacki Mitchell and Darren Woolley

Simon Edwards (TKP), Jacki Mitchell (Host), Darren Woolley (Co-host)

Topic of the day – Market Research

Today I co-host the show with Jacki and we take a look at the pro’s and con’s of market research with guest Simon Edwards, Senior Partner at TKP.

We also chat with the:

In this 44-minute episode of ‘Taking Care of Business’, you will learn about:

Continue reading “Is market research worthwhile or a waste of time?”

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