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Managing Marketing: The profession of advertising compared to management consultants

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Managing Marketing is a podcast hosted by TrinityP3 Founder and Global CEO, Darren Woolley. Each podcast is a conversation with a thought-leader, professional or practitioner of marketing and communications on the issues, insights and opportunities in the marketing management category. Ideal for marketers, advertisers, media and commercial communications professionals.

John Oldfield is the Ambassador for Worldwide Partners, a global network of independent agencies. He was also the Membership Director for the IPA in the UK. Here he discusses with Darren the difference between a trade and a profession and how as a Chartered Profession the IPA is providing a professional accreditation program for advertising professionals globally. They also compare advertising and management consulting identifying some key differences.

You can listen to the podcast here:

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Transcription:

Darren:

Welcome to Managing Marketing and today I’m sitting down with John Oldfield, who for twenty years was the membership director of the IPA and is now ambassador of World Wide Partners, an independent network of agencies, and you are joining us here in Sydney, welcome John.

John:

Thank you very much, pleased to be here.

Darren:

John, twenty years with the IPA, you must have seen some phenomenal changes, based in London there, because really London is one of the two main focuses of advertising in the world, isn’t it? After Madison Avenue.

John:

Twenty years in the IPA was a fantastic opportunity and experience but I ran my own agency for thirty years before that.

Darren:

Wow. Okay.

John:

Which I sold and then I was invited to come and help the IPA address some of the problems they were facing at the time and I, together with Hamish Pringle who was the Director General at the time, drafted a plan to move the institute from a very trade association laid-back kind of culture to a driving force in advertising and marketing communications globally.

Darren:

It really is quite dominant, because you’ve got the effectiveness awards and huge amounts of research, that they’ve done work on the quality and the financial or economic impact that advertising has with the economy in the United Kingdom. There really is an agenda there that is focused on building the recognition of advertising isn’t there?

John:

The thing with the IPA is that it is properly resourced. If you try to do that and it is not properly resourced, you end up with chaos and no one having any regard for the value of the outcomes/outputs it creates.

We are fortunate in the IPA that the members were prepared to pay significant subscriptions, but they could see terrific value. Although the subscriptions were considered by some to be high, in my view they were absolutely right because no one ever left.

The only people that ever left the IPA were those in financial difficulty. And we tried to help those in financial difficulty if we possibly could. So, the IPA’s whole culture was based on one simple premise that we wished to convert the industry from a trade to a profession.

We felt that would impact on talent recruitment and retention. We felt that would impact on the level of fees that clients were prepared to pay. We felt that would impact on the government’s willingness to listen to that which we had to say on behalf of the profession. And all that turned out to be absolutely true.

Darren:

Part of this is that we’ve seen the whole advertising industry begin to be disrupted, haven’t we?

John:

It’s become more complicated. I’m a big advocate of change, I love change.

Darren:

Well it’s inevitable.

John:

That’s right but some people try to slow it down and other people happily allow it to accelerate and I’m an accelerator not a decelerator of change. I believe it’s been good for our profession and will continue to be so. When things change very quickly the clients are in a less strong position where they are trying to keep up. They need people who are specialists, focused, and dedicated to help understand the changes in the market place.

Darren:

So, you call it a profession, advertising’s a profession which means it’s professional, right, what has made it not be a trade? I was on the board of the Australian Marketing Institute and Marketing is not even recognised as a profession in Australia so what makes advertising a profession because there’s not an acknowledged qualification. For you to be a Lawyer you need a recognised legal degree.

John:

You need more than a degree. You need a degree and then you need a qualification of the profession.

Darren:

But I’m talking about at the most basic level a profession is based around some recognised degree or qualification.

John:

Correct. Yeah, you are absolutely right.

Darren:

But what’s the degree of advertising, what’s the degree of marketing? I mean there’s marketing degrees, but they are not required to be a marketer.

John:

No, it’s not a degree but you can actually become a lawyer without a law degree, you can take other degrees as long as you get past the bar.

Darren:

It would be hard.

John:

Yeah, you’ve got a lot of learning to do. In the UK, marketing is a profession. There is a chartered institute of marketing and those individuals who are members who are qualified who undertake several years of training and qualifications can reach a position where they are deemed to be sufficiently qualified to become considered a chartered practitioner of marketing.

That royal charter was given to them I think about fifteen or twenty years ago. And they’ve made quite a lot of progress. The institute of practitioners of advertising was granted its royal charter a year and a half ago.

Darren:

Wow, that’s news I don’t remember seeing splashed around the world.

John:

It was splashed around the UK a little bit.

Darren:

I can imagine.

John:

Because the first thing the IPA needs do is to ensure it’s got the resources in place to deal with demands that fall upon it in that role. Most people don’t understand charter anyway.

A royal charter, which has been granted by the Government in the UK, has a condition attached to it. The members of the chartered body shall have a Code of Ethics, and that Code of Ethics shall insist that every individual.

Darren:

Sorry John, John you’ve already lost half the audience because ethics in advertising? Ethics in marketing? (laughing)

John:

Yes, it’s a professional thing. People working in advertising have to fulfil.

Darren:

I’m being facetious.

John:

I have difficulty in understanding this bit, it’s true. The thing is the Code of Ethics says the practitioner must have regards to the needs of the customer before themselves. We talked earlier about transparency, we’ve talked about all kinds of things like trust.

Do you trust your advertising agent? Do you trust your doctor? Do you trust your lawyer, and do you trust your accountant? Do you trust any of your advisers who are professional advisors who have a chartered qualification? You can because if they don’t comply with their Code of Ethics they are removed from the register.

Have you ever heard of Bell Pottinger?

Darren:

Yes, I read about that.

John:

Right well there’s a very successful global PR business that was a member in the UK of the chartered Institute of Public Relations. And there were various nefarious activities undertaken in South Africa which were accommodated by the holding company in the UK.

When they were investigated, and the Institute did investigate them, they hired a law firm to investigate. They determined that their behaviour was totally unacceptable and contrary to the code of ethics, so they removed them from the register (this is a quoted company on the London Stock Exchange).

It was insolvent 10 days later. Size is not an issue. The fact that they had their registration removed.

Darren:

It was a significant sign to people that they were no longer to be trusted.

John:

Correct. Trust; that’s what you come back to each and every time. You can trust a professional to ensure that he looks after you. That’s what you’d expect from a doctor.

Darren:

Because they’re held accountable by the charter, which is established to set a code of ethics.

John:

Yes.

Darren:

Why is this not more widespread outside of the U.K?

John:

Other governments, for whatever reason, don’t issue them. The IPC certificate training, which is the first step to becoming an MRPA.

Darren:

Which is offered through the Communications Council in Australia.

John:

It is and it’s offered through the AAAA in America. They took it in January in New York.

Darren:

Right, so that’s getting some global traction.

John:

There are more people with IPA qualifications outside the U.K now than inside the U.K. 200 people took it in Dubai earlier this year (and I’m not sure of the numbers) but I’m sure people are taking it here in Australia.

But it’s a global qualification; the certification to become a member. It takes three years and the learning log of each individual is retained by the IPA in London on the file servers. So, every piece of learning that every individual undertakes is logged.

Darren:

Beyond the three years to become qualified is there also a requirement to constantly update your certification?

John:

CPD – continuous professional development is part of the agreement. And they have to continue doing (I still think it’s too few) 24 hours in a year. I think it should be 50. I wouldn’t go to a brain surgeon who only spends half an hour a week learning the latest brain surgery techniques. Would you?

Darren:

And especially because we do work in a (and I’ll jump on-board here) profession that is undergoing significant transformation and expansion in complexity that would require a significant investment of time just to keep abreast of.

John:

Advertising, marketing communications is a knowledge-based profession.

Darren:

No argument.

John:

If you are operating in a knowledge-based profession I think you will fail if you do not possess a learning culture within the business, be that agency or marketing side of the client’s business.

If you adopt a learning culture you should put in place measurement. Qualifications are evidence and measurement of learning. So, the whole concept of the professional qualifications that are available globally from the IPA, to independent agencies as much as networks, they are designed to ensure that anybody can keep up to speed, at the cutting edge, whatever discipline they specialise in.

And have clients recognise that fact that they are differentiated from individuals who just enjoy the job that they do but do not possess any qualifications and cannot evidence their learning.

Certainly, it’s not unusual for an agency in the U.K to go on a client pitch and say, ‘the team of people working on this project have between them 4800 learning hours logged on the IPA. They’ve taken 27 examinations of qualifications and none of them are members of the Institute.’ It’s important that you ask the credentials of the individuals who will be working on your account from the other agencies that you’re talking to.

Darren:

So, it is an individual-based certification; it’s not a company-based certification?

John:

You’re correct and the reason for that is moral compass is something that is vested in an individual. It’s very difficult to vest moral compass in a corporate entity; people change, things get ignored, things happen, you’ve got Facebook, all those sorts of things.

But if a person sticks to the moral compass they possess then you’re on safer ground.

Darren:

One of the things, John, we’ve seen in the last few years is the move of management consultants into marketing and advertising and some of them are doing that by acquisition, some by recruiting, some of them are just moving into the area and hanging up a shingle saying ‘we’re marketing and advertising experts or consultants’.

Has there been a growth of interest amongst the management consultants in becoming certified?

John:

I think there is a charter issued to management consultants.

Darren:

Which is different to marketing and advertising.

John:

Correct. My view is they will respect the institute and what it does for them. They’ve had a good run. Management consultants are by and large successful. You might expect it. They are successful organisations. If you’re going to spend your life telling other people how to be successful you won’t last very long unless you too are successful.

So, you expect them to make the right decisions and they do have a charter.

Darren:

Yes, there is a chartered institute.

John:

So, I think they will participate in the IPA’s programme with enthusiasm. I have absolutely no qualms about management consultants widening their service remit to include advertising and marketing communications if it’s an important part of their advice to that client on how to restructure and reappraise their business models. I think that’s perfectly reasonable.

I think agencies should take a leaf out of their book and should start looking at the measurement of results and outcomes rather than just the delivery of a particular campaign.

So, I look forward to the day when agencies are hiring management consultants to work inside as head of their planning and strategic insight operations, and the difference between the two may not be as great as you might imagine in a few years’ time.

Darren:

You’ve brought up a very good point because one of the things that we’ve noticed is that the advertising industry/profession is very focused on creativity, and management consultants are very focused on financial results.

Now, there is an unspoken part of that, which is creativity as the tool of financial results but the industry often doesn’t get past that do they? Creativity often appears, not as a means to an end but an end itself.

John:

I think it’s inevitable that creative people often spend a great deal of time extolling the virtues of that which they contribute to the party because of the character, style, ego of those people—that’s how they’re built.

And that’s less likely for someone who is a highly detailed, analytical right-brain thinker.

Darren:

There’s a website online that gives you a list of all the creative awards that you can enter and globally it’s about 700 awards. And it always cracks me up because do you know the history of the Academy Awards?

I think it was actually started by Louis B. Mayer—one of the movie moguls of Hollywood. He was having union trouble getting his house built so he got together with all his chums (movie moguls of the time) and they said, ‘we’ve got to distract these unions—let’s form the Academy of Motion pictures, Arts, and Sciences and have an awards show and while they’re so busy worrying about who’s winning what we’ll be able to get all these changes made so that the ground is better for us’.

John:

Distraction theory.

Darren:

Yeah and I’m wondering if all these creative awards aren’t a bit of a distraction because, as you’ve just said, creative people naturally want to champion and talk about, and celebrate and be acknowledged for the thing they directly contribute to. But has the industry almost created this focus, this obsession with creative awards?

John:

Yeah, interesting, the leading institute for advertising, in my view, in the world; the IPA has no creative awards.

Darren:

No but they do spend a lot of money proving financial effectiveness of creativity.

John:

Yes, we do. We’re famous for our effectiveness awards. I must stop saying ‘our’ – I’ve retired. The IPA’s effectiveness.

Darren:

It’s O.K.; you can feel naturally proud of about 20 years invested in the IPA.

John:

Although the Effie’s are a step in that direction they are not as robust as the IPA’s awards, which will take a team of 5 people three months to produce. It’s a significant investment.

But those agencies that can demonstrate the effectiveness of that which they do are generally very successful. Les Binet and Professor Peter Field, all of the work they’ve done with the IPA, all the data that they’re analysing and extracting is IPA data (and they work very, very closely with the IPA) that proves that creativity is very important but consistency is just as important.

Changing the campaign every two minutes might be alright for a new marketing director when he turns up and wants to change everything and take credit for it but it’s often the worst thing to do.

Darren:

That’s an interesting thing that you raise there because we talk about the golden era of advertising. The 60s, 70s, even the early part of the 80s was an era of brands and campaigns that were built over time and they became so well-known and trusted because of that consistency.

Yet it’s often hard to think of campaigns today that have that same longevity and therefore the same level of trust.

John:

That’s right, it is. I’m biased; I come from an agency background but my view is that’s absolutely the fault of the clients for changing things far, far too often. In those golden days that you referred to the agency head used to deal with the chief executive of the client and they agreed what they were going to do and then they let everyone get on with it.

And they didn’t turn up thinking of something to change because they had other things to do. But the marketing director has nothing else to do but think what can we do today to change something to try and make it better?

But change in itself can actually have negative impact. Leaving things alone to grow and naturally develop is often a far more successful strategy but that isn’t how marketing officers are rewarded.

They’re rewarded for launching new campaigns, and doing new things, and new products and making everything change.

Darren:

Well, I think there’s a belief that being busy is part of being essential because if I’m so busy, I’ve got back to back meetings all day, and lots of projects happening that must mean that I’m essential to the process.

John:

Well I’ve seen a lot of activity which does nothing else but destroy shareholder value. Too much activity, in my view, almost inevitably destroys brand value and shareholder value.

Darren:

One of the issues we have is that clients will often brief us, ‘we want an agency that is really focused on results and effectiveness’ and when we go to the agencies and have the conversations about what they can present as far as effectiveness of the campaigns, they’re often left short in being able to supply that.

And the three reasons are the client didn’t brief any of the work based on an expectation or measure of performance—please do this because this is what we want. So, there were no KPI or objectives set—that the campaign ran and the client didn’t have any measures that they could share with the agency.

And the third point is that the client didn’t feel that they could trust the agency enough with the confidential results of the campaign.

Now, they seem to be three incredibly flawed pieces of thinking.

John:

I have a very simple philosophy when it comes to how clients and agencies should choose one another. There are two criteria, in my view, that have to be satisfied. Satisfy these and then you can go onto the creative and the strategy and everything else. But the two things you’ve got to get right first. And this is about how clients shortlist.

The first is you’ve got to find agencies on your shortlist who can prove they understand your business. The second is you like them. No client ever gave business to an agency they didn’t like and therefore did not understand their business.

If a client can find an agency that they get along with, there’s some synergy there, they speak the same language, and it’s apparent from their experience and knowledge, their insights, and their conversations that they do understand their business then let’s look at the creative and everything else.

But if you don’t have those two in place I think the rest of it is a complete waste of time.

Darren:

Personally, from 18 years of match-making, it’s chemistry, that alignment of culture and expectation, it is more important than getting your business because I will get your business if you allow me in to actually get your business.

I think the biggest mistake is that a lot of clients we’ve seen have said, ‘we want an agency that understands our business’. Now an agency can make the mistake of going in and playing ‘we know all this about your category and your business’ and all they have to do is wrong-foot one thing, misinterpret one thing and the client will immediately think of them as arrogant or misinformed.

Going back to management consultants they never go in with a ‘here’s what we think about your business’. They go in with a series of questions about the business. Now those questions are informed from their knowledge of the category. Do you have a problem with this? Do you have a problem with distribution? These are the five big issues in your category; which one is causing the most pain?

They prove they know the category of the business.

John:

That’s what I’m talking about demonstrating you understand the issues facing the client.

Darren:

John, I’ve seen so many agencies who’ve said, ‘what’s your category knowledge?’ And they’ll go in and start telling the client in the chemistry meeting exactly what’s wrong with their business and it’s crash and burn. It’s like walking into the firing squad wearing a target on your chest going ‘shoot me’.

John:

It’s alright asking questions but those questions have got to be relevant, informed questions about the issues the client is facing or is about to face. And it may well be that the client, at the level you’re dealing with, may not be aware of some of the issues that are coming down the pipe.

So, you’ve got to be careful not to tread on people’s toes but at the same time you need to earn the respect of the client that you as an organisation do have a contribution to make to its business. And that you do know things that he may not know.

Darren:

That could be incredibly valuable. I always say the smartest person in the room is not the one with all the answers but the one with all the good questions because they’re the ones that actually understand what’s going on. You don’t need the answers you just need those questions.

John:

The most powerful person in the room is the person who says nothing.

Darren:

Exactly. It’s not very professional though is it to go in and start telling someone what’s wrong with their business?

John:

I’m not encouraging anybody to tell them what’s wrong with the business. That’s foolish beyond belief.

Darren:

But it happens.

John:

I’m sure it does but it is extremely foolish. They need to identify the issues, ask questions about those issues, and they need to demonstrate that they know the right questions to ask.

I go back a long time and before I went to the meeting I used to a bit of telephone research. I used to talk to people on the phone in that sector –people that I didn’t know that I rang up. I rang a few executives at a few other companies and asked them a couple of questions. I’m doing a bit of research; can you help me?

You find out an awful lot about how the potential client is perceived; whether they’re frightened of that particular business, whether they can make an impact in the sector or whether they’re dismissive of them. That’s the sort of thing I would always want to know—how they’re perceived by their peers in their own sector.

Because that’s the shorthand for finding out exactly where the potential and the problems lie. If you find the client you’re talking to is universally feared because they are brilliant at everything they touch then you know how to deal with it.

Darren:

One of the other differences we’ve noticed from management consultants to agencies is that even in a world where marketers are not sharing growth objectives or performance or whatever they’re briefing activity in without the context of framework or growth—agencies are always thinking about activities to grow the business.

Agencies focus on top-line growth, yes? Because they feel like they’re the value creditors as opposed to management consultants who look at profit increase by reducing cost. And I’ll share with you a terrific story.

Zero-based budgeting—we’ve had a number of marketing clients that have phoned us up and have said, ‘our company is working with management consultant X who is coming in with zero-based budgeting’ and you can tell by their approach that they’ve said to the CFO, ‘I’m going to reduce your marketing spend by 30% by introducing ZBB’.

And it’s not what ZBB is about, which is investing in growth. It’s purely about cost reduction. They say things like, ‘oh, you’re working to non-working ratios seem to be wrong’ and we’re talking about website development. And I’m going,’ there is no media component to the website’.

Is that also something that agencies have got to be aware of? That there are two parts to this: top-line growth and cost reduction.

John:

The short answer is, ‘yes, they’ve got to get a grip on both’. But I’ve always been struck that whenever a management consultancy submits a recommendation report, the last number of the last page is the profit figure in five years’ time.

Darren:

Because that justifies their fee.

John:

That’s right, of course it does. The last number on the last page of an advertising agency’s report is the cost of the campaign and that is in essence why agencies have to modify their thinking, the profile of the services they deliver, and change the client’s perception that they’re not here, in the short term, to make money off the campaign.

They’re here in the long-term to build shareholder value for the client.

And there are lots of independent agencies that do that, that have that philosophy, and they’re very successful but it’s a changing environment. Ten years ago it was very rare. Five years ago it was emerging. I know from experience there are a lot of agencies who do presentations where they talk about the outcomes in years 2, 3, 4 years.

And it might be in terms of bottom line or brand share and they’ll do comparisons on share price.

Darren:

Well, it’s called framing isn’t it? It’s actually framing the service that you’re providing in the context of the benefit that you’re aiming for delivering.

John:

Yeah, I remember Crispin Porter who, many years ago, had a new business philosophy that said, ‘whatever you want, in terms of success, we’d like to be paid the same’. And there was a client who came in (I think it was Mercedes) and asked what the fee was.

And he said, ‘I’ll show the cost of running the team + 4 or 5% to cover then we want $30 per registration—every Mercedes registered we want $30. And the first part is non-negotiable. Let’s negotiate whether it’s $30 or $27.’ And they were getting the business.

And there was another guy who turned up, from the energy company. He’d been brought in on a 2-year contract to move the share price from point A to point B. So they went in and said, ‘when you get the share price to point B down the road you get to vest $4 million to cover our costs.

On that day we will work hard to achieve that with you, we want to vest a million. So we want payment in shares’.

Darren:

This is a conversation you can only have with the CFO.

John:

Correct. CEO or CFO?

Darren:

CEO and CFO because the CFO will absolutely get return on investment but the CFO’s representative in these conversations at the moment is procurement. And procurement is incentivised to reduce costs.

The reason I say that is that I know of a similar deal—a new product launch where the agency said we’ll do it at cost and then once you hit your breakeven point we want incremental cents in the dollar.

And procurement worked out the numbers and said, ‘oh, you’ll get paid too much’. And yet the agency was taking all the risk.

John:

But it’s the mind-set. You can’t blame procurement, the people who work in procurement for that mind-set.

Darren:

But that’s what they’re incentivised for if they don’t deliver savings. They’re not often incentivised for growth because that’s the role of marketing. Marketing and sales are there to grow.

John:

If they step back for a moment and ask themselves, ‘do I use the same criteria for buying something really, really important at home?’ And 9 times out of 10 they don’t buy the cheapest. I’m sure there are some.

Darren:

You’re right.

John:

If you’re choosing a brain surgeon for your daughter do you choose the cheapest brain surgeon in town or the one who’s got the great success rate who might be a lot more money.

Darren:

You always use the best person for the job not the cheapest.

John:

And yet, when they’re choosing agencies do they choose the cheapest or the best? They pretend that the cheapest is the best person for the job.

Darren:

Because a part of that is commoditisation, which is a whole separate conversation. I’ve just noticed the time. Thank you for sitting down and talking to me.

I have got a final question. Over that 20 years as the IPA as membership director and seeing all of those fabulous campaigns, do you have a favourite?

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Darren is considered a thought leader on all aspects of marketing management. A Problem Solver, Negotiator, Founder & Global CEO of TrinityP3 - Marketing Management Consultants, founding member of the Marketing FIRST Forum and Author. He is also a Past-Chair of the Australian Marketing Institute, Ex-Medical Scientist and Ex-Creative Director. And in his spare time he sleeps. Darren's Bio Here Email: darren@trinityp3.com

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