Much is discussed about the importance of 'creativity' by both advertisers and their agencies. Many creative awards focus on recognising and rewarding creativity in various categories, disciplines, media and channels. But with so much attention and focus on the importance of creativity, how does the industry value this precious commodity?

You are invited to come along and participate in a serious discussion about how creativity is valued? Or not? And more importantly how we can value creativity in new and more equitable ways at Spikes Asia 2010.

Spikes Asia 2010 runs from 19 to 21 September at Suntec in Singapore. You can register here to attend.

The Workshop - Is creativity valued? is on Tuesday September 21 at 2 pm.

The workshop synopsis:

Continue reading "Seriously workshopping the value of creativity in marketing" »

Thanks to our Senior Digital Consultant, Russell Easther, I saw this video this morning from Isobar which is the best and simplest overall explanation of how to integrate your digital media strategy into your brand communications strategy.

Bigger than the Big Idea from Isobar North America on Vimeo.

Just brilliant.

The real insight in regards to agency structure and remuneration is the clear move from 360 degree communications campaigns to 365 day a year communications.

How would your agency and marketing structure look if you truly embraced this?

How well is your digital strategy - SEO, SEM, social media, mobile, is integrated?

In the past year or so I have noticed agencies putting forward remuneration proposals that provide senior agency resources at significantly discounted prices - FREE!

It is seen as a discount. But experience shows that often the resources you don't pay for, you don't get.

Very recently an agency proposed 15% of a Managing Director (Yes, the MD should be in the retainer) and 30% of the Head of Strategy at no cost.

FREE!

Now as Professor Dan Ariely points out, getting something for nothing is a powerful offer.

But how was the marketer going to make sure they get the benefit of this offer?

Continue reading "FREE - Nothing gets you nothing with agency compensation" »

Watching Mad Men reminds me of the wonderful life of advertising before the demise of media commissions and service fees. A time where the agency was full of people with the time to go to long lunches, indulge in intra-office affairs and where meetings were filled with ten or more agency staff without the client worrying about the impact on their retainer costs.

It was a time where the relationship between agencies and advertisers were more like partnerships, partners in creating advertising, because the only time money was ever discussed was at the time of appointment, and then just to accept the “industry standard” or when the client was approving the production cost of the next big television campaign.

Well Toto, we are not in Kansas anymore. Apart from a few die-hards, the media commission for agencies is virtually dead and now the relationship, as Professor Dan Ariely would say, is now more a financial market than the social market of that past.

Unfortunately, many agencies are acting like the wish it was still the old model and have not embraced the commercial realities of the financially driven arrangement, often putting the social relationship ahead of commercial realities.

Continue reading "The social and financial considerations of agency remuneration" »

I just saw this story from Brand Republic - Thomas Cook in pitch fee row.

It reminds me of Dr. Evil from Austin Powers, demanding his one million dollars!

I spoke about this and the general concept of success fees in pitches during the Mumbrella Podcast this week.

This issue here is that the charging of success fees is false economy. Lets look at the economics of the Thomas Cook example.

The media billings per annum = £30,000,000

Agency costs for the pitch (industry estimate) = £150,000
Signing on fee (reported) = £1,000,000
Agency income in first year (Based on a generous 5% commission equivalent) = £1,500,000

Therefore in the first year the agency would have an income of £350,000.
Plus they have to deliver a 10% reduction in the consolidated media rate.

Plus Thomas Cook want a reduction in agency fee, so what if the agency fee is the equivalent of 3%? Then the agency is subsidising the client £250,000 in the first year.

This is without calculating the actual agency cost to provide the services.

Who will end up paying?

In the short term Thomas Cook. Because while they may get money up front they will end up getting what they are paying for - low price and therefore low quality media strategy and planning.

In the longer term: if this catches on, the agencies as procurement people globally will have turned the pitch into a profit centre.

My solution is posted on the Brand Republic Report:

Continue reading "Thomas Cook the new Dr. Evil, demanding £1,000,000 success fee" »

In the last week I have had several procurement people (I can't say they are professionals as referred to by their Institute) try and negotiate fees using the 3 most common lies in their industry.

Don't get me wrong, I am a champion of negotiation. I just don't rely on little white lies.

All three are from large multinational companies and all three spun their lie like they believed it. Which is sad and not very professional.

Here they are:

1. I / we don't have the money / budget.

I'm sorry, does the CEO and CFO of your company know you have no money? Do the shareholders know that this big multinational company who reported a pre-tax profit of many billions of dollars now has no money? It is ridiculous to say this, so don't.

Sure, you may not have allocated a budget for this unseen cost, but that happens all the time in business and what you do is reallocate from another budget to cover it.

We are not talking about millions of dollars here. In most cases you are lying for a difference of thousands of dollars. Is your integrity really so cheap?

What you are really saying is that you don't want to pay for fixing this problem and therefore you would rather a much smaller company, who's total turnover is a thousand times less than your annual profit, subsidise your work for you. Right?

2. Think of it as investing in the relationship.

And what type of relationship is that? One where every time we do business you try to screw a lower fee? Or threaten to go to a competitor? I wonder if they manage their personal relationships the same way?

"Yes, would love to go out to dinner, but only if you pay and only if a better offer does not present itself between now and then".

I had to bite my tongue when they said this on Thursday because I knew that in the past 3 years we had "invested" many times in this relationship and as yet have got no return as they are still dating our competitors. So I am sorry Procurement, I am not into a non-performaning investment or a polygamous relationship.

3. I have a lower quote I need you to match if you want the work.

This is the classic negotiating position. Not a good one, but a classic one.

The problem is that it is hard to justify when there has been no formal tender process and you are not comparing like-for-like and you are clearly just fishing around for leverage to get a lower price.

I am happy to give a little here and there, but when this becomes the Procurement person's standard line it really just shows they have no concept of value.

On the basis of "pay peanuts, you get monkeys", it means these procurement people are happy to work with monkeys. Well so be it.

I am, and more than happy to, leave them working in the zoo they have created.

Service Category: A high profile Local Government

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a) efficiently service the needs of various business units or
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Strategic Solution: TrinityP3 Consultants gained a thorough understanding of the service/expectation gaps at a functional, divisional and organisational level, combining both user and provider perspectives.

Trinity P3 made a number of recommendations that cut across strategic, structural, people, process and systems related issues to provide an improved service delivery model.

Integrated Approach: The process involved extensive desk research, several cross functional group discussions, a series of one to one interviews and high level meetings with senior managers overlaid with rigorous analysis and lateral thinking to produce a range of creative solutions.

Timeline: The engagement lasted 8 weeks from project inception to delivery.

Outcomes: The interim report presented to a cross section of stakeholders received wide support before being presented to senior management. Buy-in for the recommendations paved the way for far-reaching changes in the charter of the Marketing Services function and the character of its service portfolio.

Cost: Contact TrinityP3 for details

Love them or hate them, great jingles have a way of getting stuck in your head.

Forbes.com has just published the top 10 greatest jingles as voted by CMOs and Ad Executives in the US.

1. I'd like to buy the world a Coke (Coca Cola)
2. Oh I wish I was an Oscar Meyer Wiener (Oscar Mayer)
3. Two all beef patties... (McDonald's)
4. I don't wanna grow up. I'm a Toys R Us kid (Toys R Us)
5. You deserve a break today (McDonald's)
6. Wouldn't you like to be a pepper too? (Dr. Pepper)
7. Campbell's Soup. M'm, M'm good (Campbell's)
8. Plop, Plop, Fizz, Fizz, Oh what a relief it is (Alka Seltzer)
9. Stuck on me (Band Aid)
10. Double your pleasure, double your fun (Wrigley's Doublemint Gum)

Continue reading "The top 10 advertising jingles of the century?" »

For far too long marketers and advertisers have held on to the outdated terms of ATL and BTL with increasingly more activity being Through the Line (TTL).

Internet advertising and more importantly Social Media has blurred the traditional descriptions for ever.

The origins of the old fashioned terms ATL and BTL came from the early days of media commissions, where the agency would prepare quotes and invoices based on creative and production that was media commission generating being subsidised and "above the line" which non-media commissioned related activity was "below the line".

But the media commission in most markets is being phased out.

And the idea that ATL is mass paid media and BTL is one-to-one direct communications is also not a clear differentiator any more as technology means that you can now communicate with a mass market one-to-one.

So if it is no longer relevant to use ATL or BTL, then what should we use?

Continue reading "Replacing "Above the line" (ATL) & "Below the line" (BTL) with CONTENT & CHANNEL" »

At the ANA Marketing Financial Management conference in April this year, I was struck by the fact that the Americans' were referring to Agency Compensation and not Agency Remuneration.

I was sitting with Debbie Morrison from ISBA and she said that in the UK they refer to agency payment as Agency Remuneration too.

Okay - so what is the difference between compensation and remuneration?

Lets look at the definitions from Dictionary.com

Compensation:

–noun
1. the act or state of compensating.
2. the state of being compensated.
3. something given or received as an equivalent for services, debt, loss, injury, suffering, lack, etc.; indemnity: The insurance company paid him $2000 as compensation for the loss of his car.
4. Biology . the improvement of any defect by the excessive development or action of another structure or organ of the same structure.
5. Psychology . a mechanism by which an individual attempts to make up for some real or imagined deficiency of personality or behavior by developing or stressing another aspect of the personality or by substituting a different form of behavior.

Remuneration:

–noun
1. the act of remunerating.
2. something that remunerates; reward; pay: He received little remuneration for his services.

It makes me think that perhaps the word you use to describe how you pay your agencies could depend on if you believe you have done them harm and need to compensate them for handling your business or if they have done a good job and you want to reward them for the work.

Then again, perhaps the Americans simply have trouble putting the M before the N in

R-E-M-U-N-E-R-A-T-I-O-N

and not renumeration - which is not a word.