Consumer goods client reviews media agency performance, value and transparency without a pitch – case study

This post is by David Angell, TrinityP3 General Manager and Head of Media. David has extensive commercial and media experience gained through a fifteen year career in media agencies, which he uses to help drive optimal results for TrinityP3 clients.

Consumer goods

Challenging Problem:

The marketing team had experienced what it believed to be significant challenges with its incumbent media agency. However, the team was unsure as to the actual scale of its own findings:

  • How good or bad was the incumbent agency, relative to the market?
  • Was the incumbent agency being paid correctly, too much or not enough?
  • How transparent was the incumbent agency in its dealings, over the course of a long term relationship?
  • Was it really worth ‘going to pitch’ given that the same problems may end up simply being transferred to a new relationship?

This was a fast-moving team, under pressure to deliver on-going work and results, who had experienced significant internal change over recent months. There was also a necessary internal process via procurement and management required to demonstrate that the supplier needed reviewing.

Consequently, there was a nervousness expressed about trying to do too much, too soon.

Solution:

TrinityP3 recommended a two-stage approach:

STAGE 1: A Contractual Evaluation and Remuneration Benchmarking Exercise

STAGE 2: A Media Transparency, Performance and Value Assessment

The client was under no obligation to proceed with STAGE 2, until the outputs and relevance of STAGE 1 had been fully understood and internally processed.

Process:

STAGE 1: A Contractual Evaluation and Remuneration Benchmarking Exercise

  • Gathered a comprehensive set of data points, including current contract, new fee proposal, addendums detailing historical additions to scope, rate-cards detailing diversified revenue streams/non-scope charges, current plans for the next 12 month period.
  • Conducted a detailed evaluation of all data points, including contract inclusions and structure, resource structure and levels, and comprehensive financial benchmarking using our industry pool.
  • Structured, presented and discussed a written report demonstrating our findings and key recommendations against which the client could achieve short, medium and longer term value gains calibrated to improve agency and marketing performance in terms of efficiency and effectiveness.

STAGE 2: A Media Transparency, Performance and Value Assessment

  • Conducted in-depth stakeholder interviews with marketing team members and agency team members
  • Gathered all outputs from a nominated time period, including briefing material, agency strategy documentation, implementation and trading responses, annual trading contracts, post analysis details, process timelines and proof of systems/tools usage.
  • Conducted a detailed assessment of process, operations and outputs and presented a comprehensive report of findings.

Timeline:

The project was completed in two four week blocks.

Result and feedback:

STAGE 1 findings indicated the necessity to update practices when dealing with agency contracts and remuneration. The objectives of such updates were to improve the efficiency and effectiveness of the marketer/supplier relationship, and to ensure operation on a market-commensurate basis.

Our findings and recommendations indicated the following:

  • A recommendation to change the fundamental remuneration structure to better reflect the cadence and structure of the advertising strategy.
  • Key reductions in diversified services such as ad-serving rate-cards, to ensure a competitive cost against our market benchmarks. Adjustments to profit mark up and overhead recovery level to ensure competitive cost against our market benchmarks.
  • Inclusion of performance based financial at-risk incentive as part of core KPI delivery.
  • A raft of contractual amendments (new inclusions, areas to exclude or remove, changes to contractual structure) allowing the client leverage to understand greater financial transparency from its agency.

The core output of STAGE 1: whilst there were no huge stand-alone issues, there were a number of adjustments which, if made, could significantly improve overall value, whilst retaining a ‘fair’ market commensurate structure for the agency itself.

The question now became: is the effort to make such changes best made with the incumbent, or with a new agency? This led to our STAGE 2 Media Transparency, Performance and Value Assessment.

STAGE 2 findings indicated that, whilst there were some areas of strength, such areas were outnumbered by significant challenges across relationships, mis-aligned perceptions, inter-agency collaboration and quality of agency output.

Our report highlighted a road-map of recommendations to overcome these challenges with the incumbent agency.

We also provided a balanced set of considerations indicating the advantages and disadvantages of ‘pitching the agency business’ and what needed to be in place, in our opinion, before such a decision could be taken.

The client ultimately made the decision that a market review was the best course of action. TrinityP3 documentation was used to present the internal business case for this approach. The client also took learnings from STAGE 1 and STAGE 2 to ensure that a new agency relationship would be able to ‘hit the ground running’ with best practice in all areas.

The client is now thriving with a new, much improved agency relationship, with a better-suited agency team, a modern contract and remuneration structure and greater understanding of how to get the best out of its media agency.

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.

Why do you need this service? Click here to learn more

About David Angell

David has been a media agency practitioner for fifteen years, holding several senior positions in the UK and Australia. During this time, he has worked with a number of blue-chip organisations. David is the General Manager and Head of Media at TrinityP3. He lives in Melbourne with his wife and children.

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