2 good reasons to shoot your TVC offshore

This post is by Clive Duncan a Senior Consultant at TrinityP3. As a Director and DOP he has an appreciation for the value of great creative and outstanding production values, while also recognising the importance of delivering value for money solutions to the advertiser.

We have all heard the term, ‘the copywriter just wrote him or herself an all expenses paid holiday’. These scripts usually open with the line, “We see a couple hand in hand on a tropical beach”.

Plane flies over tropical location

Now if the agency is in Sydney, New York or London we know this will be an expensive exercise. A degree of cynicism begins to creep into the whole exercise from those at the agency or in the client’s marketing department that will not be going to the tropical beach.

Envy is part of human nature, but I will put all this aside and focus on some very good reasons to shoot offshore.

1. Location! Location! Location!

One of the prime reasons is the location required.

In some instances it is cheaper to shoot offshore than pay the art department costs to create a location in your home country.

For instance, as a producer I was asked to create German cityscapes and rural settings for the hero product (a car) to drive through.

Yes we have plenty of Germanic buildings and landscapes in Australia for the car to drive past or through, but each of these singular locations are miles and states apart. To get enough locations for this driving montage it was going to take a week to shoot with major logistical problems to overcome. And this montage was only a third of the TVC.

So what did we do?

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Implementing a marketing model to match specific business needs – Case study

Client Category – Tertiary Education

Challenging Problem:

The client’s marketing function was decentralised and operating across six different faculties and entities. Strategic governance was either inconsistent or entirely absent, budgets were fragmented and independently managed, there was no common campaign development process, and multiple campaigns and initiatives were being created across the organisation with no control or idea of ROI. The marketing effort involved more than 90 marketing FTEs working with an agency roster of 75 on an overall spend of less than $10 million annually.

Tertiary school graduates

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 centralised marketing structure with overall budget control
  3. Designed and implemented a uniform campaign development process, including an Engagement Agreement across all marketers and key agency partners
  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 75 to 20, designed and introduced a clear working model for the new roster, and ensured that all agencies understood their roles, areas of expertise and responsibilities

Timeline:

The work is ongoing, and is on course for completion over a total period of six months.

Results and feedback:

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How the TrinityP3 Scope Monitor helps agencies and advertisers agree agency fees

This post is by Darren Woolley, Founder and Global CEO 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.

Recently we were presenting the results of an agency remuneration-benchmarking project to an advertiser and members of the team asked how detailed and robust the methodology was. I began to explain how it was developed when I suddenly realised that we had been using this approach for more than a decade.

Scope of Work Monitor

Back in 2004 Tony Quail  and I were working on a methodology to accurately calculate the resources and costs for the various tasks being provided by creative agencies at the time. We had collected a huge amount of data in the previous few years and we started by analysing the costs and underlying resources reflected in this agency cost data.

What quickly evolved was the concept of a calculator that would allow us to approximate the resources required by the agency to prepare typical outputs at the time like television commercials, radio campaigns, press ads, point of sale material and the like. It was the birth of the TrinityP3 Scope Monitor. Over the past decade the complexity, the adaptability and the range of agency services included have increased exponentially.

The latest version of the TrinityP3 Scope Monitor was managed by Lyndon Brill and has the ability to calculate agency resources and fees across more than 45 markets globally for hundreds of agency outputs including strategy, creative and production.

Along the way it has been adapted and customised to the needs of agencies and advertisers alike, such as the TBWA Scope Manager developed with Adrian Paul,  COO, Whybin TBWA Tequila, Australia, who explains the evolution here.

Back to the very beginning

The first advertiser to use the Scope Calculator, as it was known then, was working with Westpac and followed the process of comparing the current agency resource use against the scope of work delivered, to identify how efficient the marketing team was working with the agency. One of the issues for both parties was the dynamic nature of the scope of work, which would change on a regular basis in response to the competitive market.

Note: Up until 2007 the company was called P3. In that year we expanded into Asia and changed the name to TrinityP3.

“In a highly competitive market, we needed to ensure we had the right agency model to future proof our business and help us be nimble and responsive to market needs.  We partnered with P3 to advise us on our agency model and retainer structure.

Working with P3 we firstly benchmarked our current efficiency with the agency and then used these benchmarks to create a customised calculator that would allow us to track and measure the impacts of changes in the agency’s scope of work.

This scope calculator allowed us to adjust the agency remuneration based on the changes in their scope of work. It also allowed us to calculate agency fee scenarios based on the strategic requirements of the business.

P3 provided a unique service, their in-depth knowledge of the advertising industry, combined with their smarts and rigorous approach to financial modeling and benchmarking enabled us to develop an efficient, effective and dynamic approach to our agency structure and remuneration”.

Amanda Connors, National Senior Manager Brand and Sponsorships, Westpac

The Scope Calculator allowed Westpac to calculate the changes in the level of agency remuneration and the contribution of the scope of work for each business unit to the agency retainer. This increased transparency and accountability both for the marketers and the agency.

The next iteration

The next opportunity was later in 2005 when St George were wanting to change their remuneration model to be more accountable to the work delivered. This is where we evolved the Scope Calculator to the Scope Monitor.

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Is a Corporate Trade barter system right for your company?

This post is by Areef Vohra, a senior consultant with TrinityP3.  Areef is the former Managing Director of Active International Australia. Prior to this role, he had a highly successful career in sales, executive search and media spanning more than 25 years. 

Corporate Trade, or Barter or Media Trading seems to be high on lots of agendas lately.

Today every Major Media Agency Network either has their own or is affiliated to a Barter or Media Trading company. Why?

Globe-corporate office

Well because it can, when used correctly, provide powerful solutions to client’s problems. It can also provide additional revenue streams for said agencies.

It’s nothing new… Barter has been around for decades and is particularly mature in the US (where it is a multi-billion dollar industry) and the UK.

Globally, everyone from household brands to small companies have taken advantage of the benefits it can offer around restoring value to under-performing or obsolete assets.

So is it right for your company?

Well the answer to that question is never quite as simple as people would have you think.

First of all, you need to understand that there are many different models that are offered by the various companies out there then figure out which is the best one for your company.

I’ll try and give you the short version here.

The Trade Credit model

Firstly, there is the straightforward Trade Credit model which is the oldest. Here you are issued with a ‘trade credit’ which is in essence an I.O.U issued by the Barter Company.

This can sit on your ledger and be offset as a prepaid expense to help balance books on write downs for under performing assets, excess stock etc.

Example: You have $500k of product that is obsolete, for which you are facing a write down of  $350k. The Barter Company will issue you with $500k of ‘trade credits’ to purchase said product (Which they will onsell in accordance with your stipulations). This $500k credit is to be spent on services they provide (predominantly media). You restore full value to your product and use money you were going to spend on media anyway to do so.

A variation on the above is that the Barter Company will guarantee to purchase the obsolete stock at full book value as long as you guarantee to place a certain amount of media through them.

Example: Company X will buy your $500k of obsolete stock at full face value after you have placed $5M of your media spend through them.

The Cross Purchase model

There is also the Cross Purchase model.  This essentially requires you to place a portion of your media spend through the Barter Company and they in return will purchase a guaranteed amount of product from you, thereby assuring you of immediate R.O.I.

Example: Client X lets a Barter company place $500k of media spend through them. In return the Barter Company will guarantee to buy 25% of that spend back in product thereby providing a guaranteed ROI even before consumer purchases.

The Media Trading model

Finally there is the Media Trading model that is the most simplified of all. Simply put, you will be provided with incremental benefit for every dollar that is placed through the Media Trading entity.

Example: Place $1m of your media spend through the Media Trading or Barter Company and you will be provided with a 10% rebate in the form of additional media, cash or additional agency services.

I also have to say here that all Barter/Media Trading companies will guarantee that your media will be bought in cooperation with your planning and buying agency and at your specific performance benchmarks.

The above models are the most commonly used models but a variation and or combination of one, two or all is not uncommon.

So how can it possibly work and how can they make money?

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Should you include your incumbent agency in a pitch?

This post is by Darren Woolley, Founder and Global CEO 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.

When reviewing their agencies, many advertisers ask if they should include the incumbent in the pitch process? They usually express concern that if they do not then the incumbent will “drop the ball” on the account and that perhaps by including the incumbent in the process they can keep them in the process until the end and ensure their full focus and efforts throughout the process.

Incumbent agency

After all, some pitches are known to take 12 or 14 weeks and the really poorly managed ones can take much longer. This is a long time to have the business at risk, right?

Should you include the incumbent agency in a pitch?

The answer to this is relatively easy and based on the following:

  1. Is it a review because the current relationship is significantly damaged?

In other words is the relationship dysfunctional or are you simply undertaking the review to fulfil some policy or business requirement? If the relationship is damaged to the point that you believe the incumbent would be unable to win a pitch it is probably best to not include them. After all you could be simply wasting their time and yours.

  1. Has the incumbent been given several opportunities to improve?

If the relationship with the incumbent agency is damaged or dysfunctional you need to assess if it is beyond repair.

Mind you, a pitch is not a relationship therapy process. If you believe that the relationship can be remedied then this would need to be undertaken before a pitch could proceed.

Therefore if the relationship has had a number of attempts to address the issues and these have proven fruitless, it is probably best not to include the incumbent as it is unlikely they will be able to address any issues effectively during the pitch.

  1. Does the incumbent have no chance of being successful?

If the incumbent has no chance of success due to either poor performance or the fact that the requirements of the marketer have changed and the incumbent does not have these capabilities then including them is pointless.

The only reason to include the incumbent in the situation of changing requirements is to test the quality and depth of these new skills against the market. But you would only do this if the alternatives are unknown.

  1. Has the incumbent demonstrated poor professional integrity?

Concerns about the agency’s behaviour if not included in the tender can be minimised if you follow the advice of Dr Phil who said “the best predictor of future behaviour is past behaviour”.
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Your agency brief sucks. And this is why

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.

I have a question. Please be honest with your answer.

Hands up, those of you who’ve had this experience when briefing a group of agencies – or even a single agency – on an important campaign or project?

Lots of excitement, lots of steam, lots of running in apparently different, contradictory directions? Thought so.

Now (this is the last time I’ll ask you to do this, I promise), hands up, those of you who’ve had this experience when the agency response is presented?

Ah, yes. Beautifully put together, sold with sizzle, lots of keys played…but completely out of tune with what you actually need.

Why the big analogy?

First, because I always wanted to put the late, great Les Dawson into an article about agencies (not to mention Monty Python), and today I saw my chance. Second, because I thought it might make you laugh. Third, because the analogy rings true.

It’s such a common occurrence, particularly when multiple agencies are involved, but sometimes, even when it’s just one agency. It wastes time, causes frustration, confusion and demoralisation on all sides, and leads to watered down solutions.

It’s this, it’s that, it’s everything…

If you haven’t read the title of this article, you may expect me to go wide on the perils of multi-agency relationships, the need to manage them properly, the inability of agencies to work properly together, and other related topics. All of which is relevant, but not today.

I’ve already written about the go-wide stuff and too much repetition is never good.
Today, I want to go micro on a topic which I feel hasn’t properly been covered in my earlier canon of work (or perhaps ‘my last few articles’ is a more appropriate term).

The brief. That’s the topic. To be precise – your brief, to the agencies expected to come up with the perfect campaign strategy.

It’s the first thing to rescue

If I was alone on the sea of indifferent marketing, about to be stranded on the desert island of bad performance, and in order to escape I had to choose one thing and one thing only to fix, I’d choose the brief. It really is so fundamental, so obvious, and yet so often neglected.

Overhauling your briefing – the way it’s written, what’s included and excluded, where and how it’s delivered, can work wonders. Aside from the obvious benefit of increased clarity, it can revitalise the agency teams, pushing them to think harder, and it can provide internal strategic direction to your own team and related teams in your organisation.

Perhaps best of all, a great brief can weed out the agency wheat from the chaff, it gives them a real test to provide an in-tune response, and it negates the most over-used agency excuse for average work – ‘well, it was a crap brief, wasn’t it?’

The most common types of brief-fails

So I thought I’d take you on a diverting journey around the most common types of brief-fails. The thing is, so much of this is done unconsciously – no-one sets out to write a bad brief, right? So the trick for you is to identify which of the following you might, in your heart of hearts, identify with.

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The paradox of TVC production costs

Guest author, Justin Ricketts, is the CEO at Ensemble Australia with 20 years experience in non-traditional marketing with specialist skills across sponsorship, content and event marketing, talent negotiations, and sports marketing.

Today’s post is Justin’s response to an earlier post by TrinityP3: Why are there no cost reductions in TVC production since going digital?

A few weeks ago you published an article asking ‘why there had been no cost reductions in TVC production with Digital’…

I’d like to in part challenge your contention but also pose what I believe is a paradox when it comes to the cost of production at the moment.

TVC production suite

YouTube claim that over 300 hours of content are uploaded every minute. That’s 18,000 hours every 60 minutes and 432,000 hours every day. What that says to me is that the world is full of a lot of content and white noise and ultimately brands have to compete in this space.

The craft of creating the hook

With the odd exception, it takes a great deal of talent to ensure that content is seen, shared and talked about.  Whether we’re considering feature movies, television dramas, reality TV shows, TVC’s, branded content, native advertising (I hate that term) or any other form of content – there is a craft skill behind each medium that is often under-valued and it’s often only when you look at content that has failed to engage an audience that this craft can truly be appreciated.

The piece that is usually missing is the craft of creating the hook to engage the audience in the relevant channel and too often in today’s environment I’m finding that clients are looking for short-cuts and often bypassing this critical phase of content development.

Consumers (audiences) are clearly harder to reach than ever before and as such it has become even more important for content creators to use their craft skill to engage these audiences.

In my view there is no better time to be in the business of ‘content creation’ – as content has the ability to reach and engage people. However, as brands increasingly look to diversify beyond traditional forms of communication (e.g. a TVC) and as they are being challenged to ‘do more for less’ – I’m concerned that too many brands are relying on their traditional agency partners (e.g. advertising agencies) to create and execute these new forms of content.

The result is often either:

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Why agency CEOs are giving away their profits

This post is by Darren Woolley, Founder and Global CEO 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.

I remember very clearly the look on the marketer’s face when we benchmarked the proposed scope of work and had received the financial proposals from the three shortlisted agencies. Two of the agencies were within 10% of the benchmarks, but the incumbent agency was proposing a fee 55% below benchmark.

Man throwing money

The procurement team were questioning our benchmarking. But it was clear to us that the incumbent agency was trying to buy the retention of the account. “Why would they do that?”, queried the marketer. The answer to that is complex. But let me take you into the mind of an agency CEO.

Ultimately, it comes down to the fact that for many agency CEOs they find themselves in a quandary. While they should be acting in the best interest of their clients, in fact they are incentivised and encouraged to act in the best interests of the agency owners. Increasingly these interests are no longer aligned, as I will explain.

Facing the loss of a client

For the CEO of an agency, facing the loss of a client is a critical time. Retaining the business is paramount, even in the face of certain loss. We have written previously on the difficulties of being an incumbent in a pitch.

Yet many marketers wrongly insist on including the incumbent even if they have no intention of appointing them again. This creates an expectation and an opportunity for the incumbent agency CEO to pull out all stops to avoid losing the account. But at what cost to the agency and to the advertiser’s business?

The personal consequences

It is difficult to separate these, but the fact is that senior management in multinational agencies at a local, regional and global level are increasingly incentivised to grow revenue. These incentives mean that they face a personal financial loss if they do not meet their targets. On the flip side they will also be replaced if they underperform and the loss of the account could be fatal to their career.

On a local market level, there is also the personal cost of firing staff following the loss of an account to maintain head count to billing ratios set down by the company. This is not a task anyone wants to face.

The business consequences

The business consequences are similar to the personal ones, except wider reaching. In losing an account the agency has to make up the revenue either by winning new business (hard and potentially costly) or increasing billings from existing clients (usually at the expense of other agencies on the roster).

The agency also faces challenges with the salary bill because while they will need to balance the salary cost to revenue by laying staff off, they may be also under pressure to make further cuts meaning they will have little leeway to increase salaries to keep desirable staff.

Also, they will be managing office morale and the loss of a client will mean that unless the agency has a win, staff will potentially begin to feel the agency momentum is slowing or even going backwards. This can lead to key valuable staff leaving, especially if they do not get the pay rises they expected.

The best worse case scenario

It is far better for an agency to keep an existing client, even for a lower fee, than to lose the client completely. While a lower fee may mean lower profit margins, they will take a smaller hit on the revenue than if they lost the whole account. Besides, it is only the agency fee or retainer. It could still be possible to make up much of the shortfall in production charges over the next 12 months because as we have highlighted, these have less cost management rigour.

The agency CEO will also be able to manipulate the seniority and quality of the personnel and therefore the cost of the people on the account and they can also spread the loss of staff across multiple accounts to lessen the impact of running your account short staffed.

To illustrate:

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2 major impacts for marketers and agencies due to our obsession with speed

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.

Twitter reduced information and conversation to 140 characters in 2006. So we can all…

blablablablablablablablablablablablablablablablablablablablablablablablablablablablabla
blablablablablablablablablablablablablablablablablabl

… to our hearts content.

A cheeky glance

The new Apple Watch has simplified smart interfaces to ‘glances’. Apparently, just the right amount of information to view content on a watch. Well, at least until the next technology.

A quick snap

The world’s fastest camera, The Sequentially Timed All-optical Mapping Photography (STAMP) camera, is capable of capturing 4.4 trillion frames per second. It’s able to record chemical reactions that have previously been impossible to capture, as well as the movement of light and heat conduction, which occurs at a sixth of the speed of light.

A super fast download

The fastest broadband download data rate occurs in South Korea.

Fastest broadband download - Seoul-South Kroea

Food gets faster

And Fast Food is getting faster with pre-ordering and mobile App usage on the rise. In the U.S., mobile payments are expected to triple to nearly $9 billion in 2015, according to eMarketer

So it’s no surprise that McDonald’s, Starbucks, Chipotle, KFC, local cafes and many more are jumping rapidly into mobile marketing.

Starbucks has stated that 32% of in store transactions occur through pre-paid cards, and 16% are now through their App.

And closer to home, 365Cups, a Wagga Wagga coffee pre-ordering small business has gone global. They’ve had 634,000 coffee orders since their launch in January 2011.

Footballers at speed

And on another level, do you know who’s the fastest man in Premier League Football?

It’s not Arjen Robben (he’s 9th at 30.4km/h) or Wayne Rooney (7th at 31.2km/h). It’s Man U’s Antonio Valencia crowned the fastest player at a speedy 35.1 km/h, according to FIFA.

Super slick wheels

But Antonio pales when compared to the fastest car, the Texan made Hennessey Venom GT which has clocked 270 miles per hour or 434.5 kmh.

Hennessey Venom GT

Photo: Hennessey Performance/HPE Design LLC

So why are we transfixed, obsessed, addicted to speed?

Why do we need everything quicker?

Were we unhappy with letters taking a week or two to arrive?

Were we so unhappy with a morning tea break where the whole company actually stopped and chatted with the boss and each other over a cuppa and some cake?

Well I’m starting to sound old now. So I don’t want to be misjudged for preventing progress.

But I do want to challenge the notion of speed or quantity, versus quality.

What do you make of this obsession with speed?

My feeling is that with digital technology we have sped life up to a point where it’s actually reaching a major tipping point.

It feels like it is only going one way. Faster. And if we’re all going faster then what will happen to the quality of human output? In particular to focus this post, what will happen to the quality of marketing output?

Will it diminish to a point of quantity and bombardment?

Some would say that we’re pretty close. We see thousands of marketing messages a day, most of which we simply ignore or don’t even consciously see. How on earth are we expected to absorb, judge and act on all these messages?

Yet the conundrum is that the communications industry is moving towards greater levels of sophisticated targeting, automation, and programmatic activity to stop consumers supposedly in all their tracks.

So I’d like to pose 2 major marketing impacts, and some actions, that marketers and agencies could collectively take when operating in this warp speed landscape:

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3 predictions for the future of digital in creative agencies

This post is by Zoé Freeman, a Senior Consultant at TrinityP3. Zoé  is a dynamic professional with 15 years of experience in digital marketing and a unique combination of technical knowledge, business acumen, marketing and management skills. 

Having moved from digital agencies to creative agencies I find the phenomenon of having “digital” in every job title rather quaint. There was no Head of Outdoor or Radio Account Manager. Yet anyone from a digital background gets this word tacked onto their title.

Little boy with a laptop

Here are my 3 predictions for the future of digital in creative agencies:

1. The death of the ‘digital’ job title

Smarter agencies are skilling-up their “traditional” teams and dropping these job titles. At the same time they are realising that sometimes they need additional areas of expertise to handle the multi-faceted nature of digital.

A few examples seen recently:

Digital Producer > Account Manager

Why shouldn’t the account management team be managing all projects regardless of medium?

Digital Creative > Creative

Good copywriters now write for all mediums, but the rise and rise of Search and Content Marketing has necessitated additional expertise here.

Any Art Director worth their salt should now know the fundamentals of good digital design and ideally be across UX/UI as well. However a UX/UI expert may also need to be on hand for trickier jobs.

The Digital Strategist

The Digital Strategist or Head of Digital continues to act as change manager, jack-of-all-trades and client-facing subject matter expert, and is likely to be the last to go. But as a generation of digital natives enter the workforce they too will need to adapt or perish.

Client Side

Every brand and his dog seem to be currently recruiting a Digital Marketing manager. But where do their jobs end and the rest of the marketing team’s begin?

Continue reading “3 predictions for the future of digital in creative agencies”

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