This case study post is by Stephen Wright, who has recently returned to TrinityP3 to head media consulting after 2 years at a specialist programmatic agency. This case study demonstrates the value derived by both advertiser and agency from the Media Commercial Review process.
The complexity of the new media and marketing landscape places increased pressure and demands on the role of the Media Agency. Media Agencies can now be required to craft intricate strategies for complex customer audiences, develop and manage dynamic automated trading models, work with data-driven modelling, deliver content creation and manage integration with other marketing service suppliers beyond the area of Paid in the Owned, Earned and Shared (POES) environments.
Activity across all areas of the POES spectrum needs to be seamlessly aligned to ensure optimum value, impact and presence for the marketing budget. There is considerable pressure on the Advertiser/ Agency partnership to manage this complex matrix of variables.
In our role as completely independent marketing management consultants, we bring a holistic view to the veracity of the current relationship and performance of the agency partner. We benchmark and balance all of the factors that provide a platform for performance potential and delivery.
The assessment examines structure and processes for efficiency, resourcing and remuneration for value, media planning and buying delivery for value and performance and assesses the contract to ensure it delivers relevant protections for both parties.
Regardless of the state of the relationship, there is always room for improvement and additional value to be derived from an external review. TrinityP3 has a market-wide perspective working with different agency groups across multiple categories that allow for fresh thinking and innovative approaches.
The current contract was approaching the end of a 3-year term and procurement were canvassing going to market for a competitive review.
The advertiser had been with the same agency for over 8 years. In that time their needs and the media marketplace had changed considerably.
The nature of the business required the agency and marketing team to operate at a local level in every state. In most markets, the advertising team were happy with the service provided however the incumbent agency didn’t have an office and local in one market which was an increasing concern to the local marketing team.
In light of an impending review, all elements of the media service required market calibration and independent validation, but matters of particular note identified by the advertiser were the following:
- The quality of the service provided in one state without a dedicated media agency office.
- High turnover of agency personnel in general but most particularly in one of their largest and most important states.
- The perceived level of transparency within the contract in general and in digital areas in particular.
- The pricing of digital services – Search, Social and Programmatic.
TrinityP3’s evaluation already covered all of these areas but it was noted that the report should specifically address these matters and potential solutions in greater detail.
Discovery and Learnings:
TrinityP3’s assessment uncovered the following across the 4 areas of analysis:
Resourcing and Remuneration
- The resourcing and remuneration terms for core services were higher than TrinityP3 standard benchmarks.
- This was anticipated based on complex state by state servicing requirements however the current system of setting remuneration based on agreed tasks and head hours showed a tendency to overestimate resourcing and resultant remuneration.
- The terms for Search were 2.5 % higher than benchmarks due entirely to an unusual client-specific technology fee agreed 6 years ago that remained in place.
- The current head-hour/ task-based model was time-consuming and complex to manage for both agency and advertiser.
- There is a loss of value through the structure in place at the Agency that requires coordination of multiple state-based teams and specialist digital divisions to service the advertiser’s full media needs.
- A review and re-crafting of structure and processes had the capacity to deliver improved productivity and a stronger ‘platform of potential’ for performance delivery.
Media Value Benchmarking
- The trading service provided by the agency was competitive (particularly in digital) but would benefit from review and improved reporting in the delivery and composition of added value. There were healthy levels of additional ‘no charge’ inventory but limited additional initiatives.
- For all 5 campaigns analysed planning scores were very good, relative to industry benchmarks. The planning service provided was thorough and of a consistently high standard.
- The integration of digital and non-digital activities was good given the fragmentation of service teams across states and specialist digital disciplines.
- The current contract lacked critical elements in today’s new media marketplace particularly given the growth and increasing reliance on digital.
- Key areas of concern that were either missing or inadequately covered were:
- Holding Company Acknowledgement, the use of Sub Contractors and ‘Rights to Audit’
- Agency Rebates – Definition and Disclosure
- Brand Safety and Ad Verification
- Data Compliance/ Usage and Ownership
- A more detailed contract covering these areas with a recast structure and revised remuneration terms was recommended.
The following actions were proposed, agreed and undertaken:
- Moving to a new retained resource model that better-reflected resource requirements and was simpler to manage.
- Revised terms for Search that brought them in line with current market benchmarks.
- Workshops to review and refine structure and processes nationally with specific discussions to establish resourcing needs state by state.
- Greater consideration of innovative, alternative options for the delivery of Added value (other than additional no charge inventory).
- A new contract that reflected the revised remuneration model based on FTE’s rather than head hours and newly negotiated remuneration terms.
The agreed programme of changes was undertaken across the 3 months following the review via a combination of workshops and consultation. TrinityP3 assisted wherever we were able to facilitate discussions and add value to the process.
Results and feedback:
‘TrinityP3’s Commercial Review has recast our relationship with the agency and we are forging ahead with a new team structure and improved processes. The independent validation of high-quality media planning and buying was excellent news. We have clarity across all aspects of pricing and the value received from our media agency relationship. Newly negotiated terms within an improved contract are in place and the agency’s appointment for a further term has been agreed.’
‘ Confirmation we are delivering a high-quality planning and buying service was great to hear. Collaboration and dialogue with TrinityP3 throughout the review provided a perfect forum for self-analysis and to address important client concerns in some states. There were legacy based contracts for some areas of digital that needed to be revised. The new contract and remuneration structure affords greater transparency and is far easier to manage. Workshops and extensive discussions state by state have better aligned us with local marketing teams, there is renewed enthusiasm and improved working partnerships are now in place.’
Independent external analysis identified improvements to the structure of teams at both advertiser and agency and more efficient processes between the two. These changes have provided a significantly improved platform for performance potential. There is now improved communication between the states and better dissemination of learnings and initiatives across markets.
The current strengths of the agency service and quality of the media outputs were recognised with additional value achieved in the trading area through a greater focus on alternative initiatives.
Advertiser and Agency are better aligned, working together more effectively and efficiently as a unified national team against key performance measures and business based KPI’s.
Are you concerned about the value you are obtaining from your media investment? Find out about our comprehensive media assessment service here