This post is by Nathan Hodges, TrinityP3‘s General Manager. Nathan applies his knowledge and creativity to the specific challenges of marketing management, with a particular focus on team dynamics and behavioural change.
There’s an old saying. If it swims like a duck, and quacks like a duck, then even if it’s not 100% duck, it’s certainly been ducking around.
Last week’s ANA report on media transparency, and whatever follows in Australia, means that this issue is going to run and run.
Maybe it’s the refreshing clarity of the ANA report that has finally made the problem impossible to ignore. But it cannot be a surprise to anyone in the industry for more than five minutes – agencies, marketers or publishers – that the issue itself has finally come to a head.
It’s been the elephant in the room for years. Every time we’ve blogged about it or raised it on platforms or panels the reaction has been nervous laughter, dead silence or a rapid offer to call a taxi.
But let’s get practical. What do you do, tomorrow, if you’re a marketer with 2017 marketing objectives to meet, a brand to protect and a communications strategy to implement?
Your life as a marketer just changed
Because whether you realise it or not, your life as a marketer just got a whole lot more difficult.
Your CFO has just read an independent report into potential fraud on a substantial scale, and has then heard some of the media buying groups react with the sensibilities of Michael Corleone in front of the Senate Committee in Godfather II.
CFOs, being the rational types they are, are going to be rather less likely to sign off your expanded 2017 budget (with its new, improved programmatic element) without some serious questions. And your current answers to those questions may not be nearly good enough.
Your CEO has more than likely just heard about the ANA report from the CFO. But CEOs, being the eclectic types they are, have probably come across snippets of Mark Ritson’s presentation of a couple of weeks ago.
They may have some curly questions to ask about your proposed 50% increase in digital spend for 2017. And the answers you had ready may not sound as convincing now as they did when you first got them a month ago from the media agency.
So, what can marketers do? What step can marketers take to protect their brands and businesses while this self-inflicted storm rages for the next 12 months or so? How can marketers liberate all the good, professional, talented people in agencies, with whom they have been working for so long, to keep doing the right thing by their clients?
The simple first step
In part, it’s very simple. As a starting move, marketers need to stop paying agencies and publishers for input, and start paying for output. In other words, results. Stop focusing solely on price, and start focusing more on value.
Marketers need to align their agencies’ KPIs with their own KPIs, and pay for performance. And pay generously for performance achieved – not some token 5% here or 10% there depending on a raft of soft measures including how nice everyone is to each other. Proper, motivating performance-based remuneration.
Implement this, and in one fell swoop you sidestep so much of the ongoing debate about price, rebates, mark-ups, value banks and bonus inventory. That issue can run at its own pace and resolve in due course. But for you and your marketing effort right now, the emphasis turns to results instead of costs – and so everyone becomes far more focused on results. Including your CEO and your CFO.
ROI becomes centre-stage. Media recommendations live or die by their effectiveness and nothing else. Your on-the-ground media agency teams – who incidentally are set up to operate in exactly this way – are incentivised to start working with your data, you, your team, your stakeholders and the rest of your roster to build your brand, your business and your profitability.
Just like it always should have been. Zero-based, solution-neutral, ROI focused. Just like proper marketing, in fact.
The practical challenges
It sounds simple. In practice, of course, it’s not so easy to do. Whenever we’ve implemented or proposed robust payment-by-results remuneration models, the tendency from marketer and agency is to water them down, either immediately or over time.
Agencies object to being held mostly accountable for results over which they claim only to have a partial influence. Marketers set the agencies different KPIs from their own, and then wonder why the agencies are not working alongside them.
Sometimes the agencies look like they might succeed wildly against the KPIs set – at which point the marketers balk at paying the money and find another way to do the agency down. Other times marketers kick the whole issue of KPIs into the long grass – they become a nice-to-have, for next year – and they refocus on price.
A chance to lead
So it can be complicated. But how complicated it becomes is largely up to you, the marketer. It requires dexterity with data, consumer insight, organisational management and tolerance of ambiguity to succeed. It’s a challenge and a huge opportunity.
Of course, it’s not going to remove concerns around transparency completely.
But as a marketer you now have the chance to lead, to make a move that helps to set things right once more and allows the talented, dedicated people in the industry to do their jobs unimpeded once again.
And if you need any extra incentive, just take another look at the mess created by the current way of doing things, and ask yourself how well that’s worked out for you and your agency partners.
TrinityP3’s Media Transparency, Performance and Value Assessment takes a holistic look at the operation of your media agency, assessing against best practice at every stage of the journey. It aims to give you the tools to improve the output of your media agency.
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