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.