Is your marketing function centralised, decentralised or distributed?

It is interesting that when you are talking to business people about marketing, the majority seem to think of marketing in the context of marketing communications, or what was not long ago considered Promotions or Advertising, one of the Ps in what was the 4Ps of marketing. This is probably not surprising as promotions and advertising are certainly the high profile and public end of the marketing process and certainly where a significant component of the budget is spent, especially on paid media, but increasingly on owned and earned media too.

But the fact that many organisations think of marketing as the marketing communications area, leaves the question of where are the other traditional marketing functions located within the organisation? The reason for asking is that often when we are what marketing structure do you have the most common answers are either centralised or decentralised. Only to find out that even when it is centralised it is usually only the marketing communications function that is centralised and typically marketing is actually distributed across the organisation.
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How To Improve Briefings To Your Agencies

We often hear complaints about weak marketer-side briefings – both from agencies who receive them and (surprisingly enough) from marketers who admit their briefings aren’t as good as they could be. Even more surprising perhaps is that clients are forthcoming about acknowledging they’re ‘part of the problem’. What’s perplexing perhaps is that when asked, ‘why don’t you fix your briefing process?’ they ask, ‘sure, but how…?’. For anyone asking, we run training workshops for marketers looking to strengthen their internal resources and create stronger working relationships with their agencies, from providing feedback to agencies, to evaluating creative and yes how to write better briefings. But for the purposes of this post, here are a few questions worth asking to help set your teams up for success and writing better briefings: Continue reading

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When “Best Practices” are Worst Practices

Did you hear about the infamous Army briefing during the Vietnam War? “We had to destroy Ben Tre in order to save it.” The briefing referred to a terrible act, the annihilation of a Vietnamese village by overwhelming American firepower, carried out during a terrible war that was lost in any case. So it goes when tactics, rather than strategies dominate a conflict. Less gruesome, but relevant is the bungled tactical war between advertisers and agencies. Well-meaning tactical “best practices,” used extensively and nearly universally by marketing procurement departments, are worst practices that destroy agency capabilities and annihilate partnerships. Unfortunately, agencies are equally complicit in their destruction.

The Relationship War began, like many wars, with a skirmish and a few opening shots. In the ’90’s, media commissions were giving way to labor-based fees, and advertisers were clueless about agency headcounts, salaries, overhead rates, and profit margins (let’s leave aside the stupidity of adopting this labor-based approach). Advertisers asked their agencies to provide the necessary cost details. Agencies demurred, offended by the request, failing to recognize that procurement folks had been used to knowing intimate details from their manufacturing and distribution suppliers, and they expected the same transparency from their marketing communications suppliers. The agency refusal to cooperate infuriated procurement. As one exasperated executive told me in 2003, “Who the hell do they think they are, anyway? A bunch of prima donnas. I’m going to whack their fees by 10% — maybe that will send them a message.” Agency fee cutting became procurement’s raison d’être, and over the decades fee-cutting took on many sophisticated forms: Continue reading

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Six reasons why you may have many more agencies and suppliers than you need

We provide a very popular solution called Agency Roster Alignment where we analyse and map the current roster against the advertiser’s strategic needs, spend and satisfaction with the incumbents. Some of the really common responses when we report back on the current rosters is, first, many are surprised at the number of agencies and marketing vendors on the roster and, second, how they could have ended up in this situation with so many agencies and suppliers. Let me deal with the first response and then expand on the second in the observation points below.

First off, when we take about rosters we are not simply talking about the major agencies such as creative, media and digital, plus perhaps a PR company, a design studio, and that sales promotion firm you use occasionally. We are talking about all of the agencies, suppliers and vendors that you spend your budget with, including market research firms, event companies, mail houses, technology solutions providers, and everyone in between.

Just as marketing has become more complex, the number of vendors, agencies and suppliers has grown too. But the fact is there are some very solid reasons as to why you may have more agencies and suppliers than you need. And that is not a good thing, as each extra one on your roster is consuming time and money by just being there. Continue reading

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17 ways advertisers can make their advertising production more transparent

In light of the recent ANA Production Transparency Report in the US, and the growing trend for the ‘Big 6’ Networks to establish separate brands for production services, here is a list of key considerations for your current agency contracts. TrinityP3 believes terms and conditions should be transparent, and not support hidden agendas, especially where an agency may engage a related production supplier. So here are our seventeen areas or principles when reviewing your agency and production contracts:

Review your agency contracts regularly – The contract should contain transparent terms, which are clearly understood by both parties, and reviewed at least every third-year due to technological advancements and process efficiency within industry practices. Do you know exactly what the terms and conditions are of your agreement? If not, you should, transparency is paramount.

Be clear on the type of relationship your contract defines

Contracts are generally one of two formats. This is either one of Principal and Agent, or alternatively Principal and Contractor. Where the Agency is acting as an Agent, the Agency has a fiduciary responsibility to act in the best interests of the client, and procure production at the best possible price. However, where the contract engages the agency as a Principal and Independent Contractor, often terms allow for the agency to mark-up or provide less disclosure and transparency over the sourcing of external production services.

There has been a recent shift towards these agreements where the Agency acts as the Principal with production suppliers, to limit the ‘risk’ of audit and potential compensation in the case of a breach of terms of the agreement. The Agency engages suppliers, which are often deemed external 3rd parties (although often related), which are not subject to the terms and conditions of any Master Services Agreement.

Investigate contracting third party production companies directly

A direct Production Services Agreement with the related 3rd party production house is always recommended, which should include the same transparent terms as the Agency agreement, and especially include the right to audit. This supports the move away from ‘fixed price’ and ‘non-auditable’ external production agreements, which are common within the industry. Continue reading

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Do Clients Get The Agencies They Deserve?

You’ve likely heard David Ogilvy’s famous words, ‘clients get the advertising they deserve’ but when it comes to their agencies… do clients get the agencies they deserve? Over the last seven years or so, we’ve done enough marketer problem resolution work and agency searches to be able to answer that question with some conviction. The answer is unequivocally, yes. Invariably, agency relationship challenges can be traced back to their marketing masters and are a reflection of how the agency is being managed. But if you’re reading this with some scepticism and thinking, wait a minute, this is like saying dogs look their owners – consider these behavioural attributes: Continue reading

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Take the Pledge! End Madison Avenue’s Manslaughter!

Madison Avenue’s self-destructive practices need to come to an end!  In the wake of a decade or more of marketing cost reductions, CMOs have lost credibility and power; procurement departments have confused benchmarking with marketing, and demoralised agencies have seen their capabilities severely compromised through downsizing, juniorising, and Scope of Work inflation. Cost reduction programs have run their course. They were never a credible substitute for brand growth as a way of delivering shareholder value. Continue reading

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Why performance based payments need to be an incentive not a disincentive

How do you create high-performance teams? Well if you look at what often passes as performance based compensation, you would think it is about taking money away from the agency before then setting an unreasonable and unrealistic performance metric, and then asking the agency to work at getting their money back. Talk about all stick and no carrot. Is it any wonder that so many marketers report that their agency performance remuneration efforts failed? Let’s be honest for a minute and admit that most of these performance models were really about reducing the agency fee and had very little to do with truly wanting to encourage performance. The technique would be applied usually as a way to get the agency to reduce their overall fee by 10% to 15% by placing it ‘at risk’ for an opportunity of earning back perhaps a maximum of 20%.  Continue reading

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Managing Marketing: Dealing with the rapidly increasing complexity of the media market

Scott Hagedorn, CEO of the world’s fastest growing agency, Hearts & Science talks with Darren on the important relationship between science and intuition in advertising, especially for marketers dealing with an increasingly complex world. The similarities and differences between agile marketing and the scientific method and role data play in decision-making. Continue reading

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How long payment terms impact client / agency relationships

Let me be completely up-front here, this is not just an issue for advertising agencies, it is also an issue for consulting companies like mine. There are many major companies who will put you through a detailed and protracted procurement process, negotiate your tendered price down and then inform you that they have payment terms of 90 days or more.

Others are less obnoxious in that they state their payment terms up front, which, depending on the type and size of the project being tendered, allows us the opportunity to politely withdraw from the process because there are plenty of other more reasonable companies willing to pay for our services on 30 days and sometimes less so that we do not need to waste our time on companies who basically expect their smaller vendors and suppliers to act as their source of free cash. Continue reading

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The challenges facing Automotive marketers in selecting new agencies – Three case studies

Share59 Tweet68 +1 Share10Shares 137The automotive industry is being disrupted globally. Electric motor vehicles like the Tesla are providing a viable and desirable alternative to the fossil fuels of the past. Diesel technology has been shown not to be as … Continue reading

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The Ad Industry at War with Itself

This month marks the one-year anniversary of the publication of ANA’s “media transparency” recommendations, which followed a major investigation of media agency practices. Lest we forget how central media transparency is to ANA, Bob Liodice (President and CEO of ANA) and Doug Wood (outside legal counsel) published a MediaVillage article in mid-July reminding us that “if the allegations against the [media] agencies are true, the behaviour is reminiscent of past high-profile financial scandals.” Continue reading

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Managing Marketing: The importance of understanding culture to stay relevant in a changing world

Sharon Foo is the Client Partner at Sparks & Honey and she talks with Darren on the importance of diversity, data, and technology in understanding the cultural changes occurring in society and staying relevant to your audience, allowing you to change to meet the future needs of the market. Continue reading

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