Organisational Mishmash: The Ad Agency’s Unaccountable Structure

This post is by Michael Farmer, Chairman of TrinityP3 USA and author of Madison Avenue Manslaughter: an inside view of fee-cutting clients, profit-hungry owners and declining ad agencies, which won the Axiom Gold Business Book Award for the best marketing / advertising book of 2016.

Agency Structure

The global ad agency has become a complex, unmanageable mishmash of organisational positions. Complexity reigns. Accountability is invisible if it exists at all. No wonder clients are able to take such advantage of their agencies, loading on unpaid out-of-scope work and cutting fees! Top agency executives, though aware of the problem, are unable to launch a management counter-offensive. No one has the responsibility for the problem or the authority to turn things around.

Existing clients.

Let’s consider the case of existing agency clients. They fall into two buckets: 1) single office clients managed by local GADs (Group Account Directors), and 2) multi-office global clients managed by ECDs (Executive Client Directors), who have local GADs on their extended teams to oversee local operations.

Single office clients.

A GAD is the point person for a single office client, planning / agreeing on Scopes of Work (SOWs) and fees, and organising the delivery of strategies and creative executions that ought to enhance client brand performance.

The GAD reports to an Office Head, the Office Head reports to a Regional Head, and the Regional Head reports to the agency CEO. There should be a straight line of accountability from the GAD to the CEO, with management reviews providing a flow of information that answers questions like “what kind of work are we doing for this client? How much work? Is it the right work for the brand problems? What level of fees are we receiving? Are the fees adequate to cover the required resources? Is the account profitable? What are our ambitions for this client in the future? What must we do to fix fee / workload problems?”

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The impact of economies of scale on scope of work cost

This post is by Darren Woolley, Founder of TrinityP3With his background as analytical scientist and creative problem solver, Darren brings unique insights and learnings to the marketing process. He is considered a global thought leader on agency remuneration, search and selection and relationship optimisation.

This is the second in a series of articles on agency scope of work management. Managing the scope of work for your agency is possibly the easiest and fastest way to increase the buying power of your marketing budget by removing the duplication and uncertainty as much as possible from the agency work. In this way you are able to get more for your agency budget without simply driving down the rates and prices. Read the first article here

Agency scope of work cost

There has been a dramatic increase in the outputs agencies are producing for their clients these days, especially due to content marketing, social media and digital advertising. The multiplier effect on the scope of work can inflate the agency fee without the allowance for economies of scale. But economies of scale must be applied carefully to avoid undermining the process.

The impact of content and digital on the scope of work

The real time, always on capability is driving agency scope of work. Sure it was possible for a major retailer to have advertising each week, but social content and digital advertising can require tens and hundreds of thousands of pieces of content every year.

In a recent scope of work we identified the need for the agency to produce more than 200 pieces of content per week (that is more than 5000 outputs per year) and that is for one brand and just for Facebook alone. Expand this to all of the other social media platforms and digital advertising, plus throw in the owned media such as website landing pages for each campaign message and we hit more than 25,000 outputs for the agency on one brand.

But consider that if you informed the agency that you needed 5,000 Facebook content pieces the agency would calculate an allowance for resources to produce one and then possible multiply it by 5,000. Or having seen the resultant cost they will probably discount it, but by how much and why? Continue reading “The impact of economies of scale on scope of work cost”

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Discovering your strategy with a business strategy story

This post is by Shawn Callahan, author of Putting Stories to Work, and one of the world’s leading business storytelling consultants. He helps executive teams find and tell the story of their strategy. When he is not working on strategy communication, Shawn is helping leaders find and tell business stories to engage, to influence and to inspire.

Business Strategy

Companies often mistake planning for strategy. This seems to be particularly true of large organisations.

A few years back, we got a call from a large company headquartered in the Netherlands. Their head of strategy felt that their people didn’t understand the company strategy – a common concern across most big businesses. The strategy group consisted of 20 people, which is a lot by any measure. When I asked them to describe their strategy, they could spell out initiatives but were unable to put their fingers on the strategic choices the business had made to win.

Strategy involves choice

In his seminal book on strategy, Richard Rumelt makes it clear that unclear choices make bad strategy: ‘Strategy involves focus and, therefore, choice. And choice means setting aside some goals in favor of others’.* The 20 people in the strategy group were planners. There was a portfolio of things to do, goals to reach, stretch targets to make, but as Rumelt says, when the hard work of making clear choices isn’t done, ‘weak, amorphous strategy is the result’.

Choices are the grist of strategy stories. When the leaders in a business decide to offshore certain services rather than keep them in-house, they have made a choice. The strategy story can help them explain why that choice has been made.

Because companies don’t always make clear choices, it’s often necessary to first get everyone on the same page when it comes to strategy. We’ve found that working with an executive team to craft their strategy story helps their choices to emerge and then clarifies them, so that everyone around the table not only understands what choices were made, but also why they were made. Most importantly, after working on the telling of that story, they will be able to relate it to anyone face-to-face, without a PowerPoint crutch.

The benefits of the business strategy story

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Managing Marketing: The business challenges facing marketers and their brands

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.

Mahesh Enjeti, Managing Director of SIA Marketing Counsel discusses with Darren the issues facing marketers today and the important role of brand in not just providing a customer promise or proposition but to define the purpose of the business or organisation for all stakeholders and to support the value proposition of the business through tangible financial contributions to the business success.

Mahesh Enjeti podcast

You can listen to the podcast here:

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Transcription:

Darren:

Welcome to Managing Marketing and today I’m catching up with a long-time friend of TrinityP3’s and mine, Mahesh Enjeti who is the Managing Director of SAI Marketing Council. But Mahesh I notice that you’re also a self-proclaimed brand developer, architect, builder and restorer.

Mahesh:

Thanks, Darren. I suppose that’s what I’ve been doing all my 40 plus years in marketing. I’ve lived with brands, breathed with brands. I’ve created brands, nurtured them, rebranded them, re-launched them, re-positioned them so I suppose I could claim the title of being a developer, being a builder, being an architect, and all that, yeah.

Darren:

Well I’m glad because one of the things that I’m getting particularly agitated and irritated about is that a lot of people seem to be forgetting what brands are and how important they are.

Have you noticed the same trend?

Mahesh:

I think that’s probably more as a result of confusion between brand and branding. A lot of people seem to  mistake branding for brands. And I look at brand as something more fundamental, deeper in terms of who you are and what you stand for, and what’s your purpose. But more importantly (something which is not often discussed) how do you behave?

How do you behave with your customers, with your suppliers, with the environment, with the society, even with the tax office? I think all that goes into who you are and what your brand is.

Darren:

Because you do quite a bit of speaking, especially lecturing, how do you describe brands to someone that’s coming into the industry for the first time or a brand?

Defining the concept of brands

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How to define an agency scope of work to deliver increased value

This post is by Darren Woolley, Founder of TrinityP3With his background as analytical scientist and creative problem solver, Darren brings unique insights and learnings to the marketing process. He is considered a global thought leader on agency remuneration, search and selection and relationship optimisation.

This is the first in a series of articles on agency scope of work management. Managing the scope of work for your agency is possibly the easiest and fastest way to increase the buying power of your marketing budget by removing the duplication and uncertainty as much as possible from the agency work. In this way you are able to get more for your agency budget without simply driving down the rates and prices.

Agency scope of work

But why is specificity so important? Anyone that is involved in manufacturing, construction or technology knows, by clearly defining and specifying the actual requirements upfront you are better able to plan and execute the construction/manufacturing process more efficiently and effectively.

What is required for a high quality scope or work

While in a dynamic market it may be difficult to specify all of the marketing requirements for the year ahead, that does not mean you should not specify the requirements that are known and even include those requirements that are most probable.

It is too easy to say that it is not 100% definite and postpone the process, but this comes at the expense of either having the agency allow for, in their retainer and fees, what ever you may throw at them later, at a premium cost.

This is why marketers need to prepare agency scopes of work that are detailed, defined and specific in a way that allows the agency to be able to estimate resource requirements, scheduling and costs. It also allows marketers to review and manage their requirements in a more strategic way with a scope of work providing the basis of the plan.

Outputs can be tangible and intangible

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The natural fear of driving blind with your advertising media budget

This post is by Darren Woolley, Founder of TrinityP3With his background as analytical scientist and creative problem solver, Darren brings unique insights and learnings to the marketing process. He is considered a global thought leader on agency remuneration, search and selection and relationship optimisation.

Since the release of the ANA K2 Report on Media Transparency  and now with Marc Pritchard, CMO of Procter & Gamble and Chairman of the ANA calling on the digital media industry to sort out their industry,  many advertisers are in the difficult situation of knowing the need to address this issue but equally confused as to what to do first.

Part of this is due to the complex nature of the digital media buying value chain, but it is also a fear of any changes revealing where they were possibly getting it wrong.

Just as FOMO (Fear Of Missing Out) will often drive marketers into action when it comes to embracing new technology like Virtual and Augmented Reality, FOBFO (Fear Of Being Found Out) is often paralysing some advertisers from making the changes they need to make in the context of the very public statements of where digital media is failing.

Advertising media budget.

Beautifully summed up in a conversation with one marketer who said “It’s like I’m driving a car at night with the lights off, I cannot see the road ahead or even where I am going. But all I can hear is the voice of the agency coming from the back seat telling me to go faster”.

Lets look at what is creating this darkness and fear and more importantly what can marketers and advertisers do to take control of the situation and get it sorted out.

Lack of transparency

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Cut through the clutter in your marketing technology stack

This post is by Kylie Ridler-Dutton, Marketing Management Consultant at TrinityP3. Kylie is a discipline neutral specialist with consulting and implementation experience spanning across retail, alcohol, utilities and telecommunications.

Marketing technology Stack

The technology transformation era has caused businesses to sit up and take note that in order to sustain your brand for future growth and profit you need to invest in the latest technology to keep up with….what exactly?

This question, and often panic, has led to businesses investing in multiple technology solutions and internal marketing departments facing restructure to manage the investment, which ultimately leads to more (poor) investment.

Sometimes businesses get it right investing in technology and sometimes it can lead to dormant software and marketing divisions not really achieving results. Which leads to the big question that often cannot be answered, or in most cases is not even being asked ‘What has the ROI been on that investment?’

Technology and Resources Audit

Recent client engagement has seen TrinityP3 initiate the evaluation of a company’s technology resources and internal team structures. Our first question is always;

Do you have an integrated marketing-technology strategy?

Our evaluation process:

  1. A technology audit – what is there currently under licence, what is actively being utilised and how is it utilised throughout the business?
  2. Review of technology resources and who accesses them.
  3. How does it link back to the strategy and therefore the marketing plan. The plans should both consider internal evaluation and acquisition of technology.

Technology and the potential ROI in business

Often, we uncover that the technology is the right fit for the client’s business except it is not being used to its full potential. Continue reading “Cut through the clutter in your marketing technology stack”

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Which comes first, the media plan or the creative?

Bill Merrick has more than 20 years experience in international business, gained in marketing, advertising and PR – from packaged goods to infrastructure. He is now, from London, partnering with Darren Woolley to launch TrinityP3 UK – to bring all of their combined experience and insight to clients in Europe.

Sometimes, using a story can help put things into context; here’s one for this idea.

A chicken and an egg meet in a dimly lit bar in New York. After a few drinks, it’s clear that they’re heading for romance. They get a room and feathers fly.

Later, in the warm afterglow of the street lights and the hotel neon blinking gently into the room, the chicken lights two cigarettes, hands one to the egg and says, “Well, I guess that settles that.”

Media plan or creative

My apologies, but the debate in the industry over which comes first, the media plan or the creative – is an almost certain way to fall fowl (pardon the pun) of good practice. But it does seem to me that more and more people are asking this (especially with all the new shiny toys and technology)– and it’s a great way of sorting the pros from the cons (The professionals or the people trying to con their way through).

In the way that the opening story has a beginning middle and end, but no defined resolution, the real question is what really comes first? Continue reading “Which comes first, the media plan or the creative?”

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How to optimise your agency roster and increase your budget value

This post is by Darren Woolley, Founder of TrinityP3With his background as analytical scientist and creative problem solver, Darren brings unique insights and learnings to the marketing process. He is considered a global thought leader on agency remuneration, search and selection and relationship optimisation.

Optimise agency roster

The industry is talking about agency rosters, with companies like McDonald’s, consolidating their roster with one agency or holding company to create a single entity roster.

Other advertisers are choosing to move away from the Agency of Record (AoR) to a more collective roster of agencies (or a Village). This trend was so prevalent in the past 2 years that some industry commentators were calling the death of the Agency of Record.

But many advertisers are yet to significantly review their roster of agencies and marketing suppliers, even though for many their marketing strategy and plans and therefore their requirements have significantly changed in the past five to ten years.

What I am talking about here is not an agency review or a pitch to replace an under performing agency, but a total review of the roster to determine the ideal structure, composition and size. In our experience this process will deliver for most advertisers a significant increase in agency productivity, reduced costs and an increase in marketing performance.
Agency roster optimisation

1. Defining your agency roster

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Managing Marketing: The transformation of Higher Education marketing

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.

Chief Marketing Officer, John Chatterton talks with Darren about the challenges facing marketers, particularly in the Higher Education category, which is undergoing significant transformation due to the changing expectations of students and industry. He shares some of the opportunities for marketers in the category to help manage this transformation leveraging strong brands with agile customer experience management.

John Chatterton on Higher Education marketing

You can listen to the podcast here:

Follow Managing Marketing on Soundcloud or iTunes

Transcription:

Darren:

Welcome to Managing Marketing and today I’m joined by Chief Marketing Officer, John Chatterton, to talk about marketing and Higher Education. Welcome, John.

John:

Thank you, Darren, great to be here.

Darren:

Look, John, I’m really interested in the fact that you’ve got a terrific career and very senior roles both in product and now services marketing. But obviously a lot’s happened in the last ten years with marketing and I’m wondering what do you see as the biggest challenges now facing senior marketers like yourself?

John:

I think there’s a huge tension between the traditional way of marketing where I was trained by the global FMCG companies and digital marketing. And there’s a lot said by marketing pundits around which way we should be focused and should we even refer to digital marketers.

But I think there is also a lot forgotten, which is we’re having this debate because we haven’t actually made that change as an industry.

Those who are actually marketers day to day are struggling, genuinely struggling to evolve from the traditional approach to marketing to be fully digitally orientated and that’s why we continue to have this debate about which is more important.

Darren:

Yeah, I just noticed recently we’ve had Coca-Cola who raced out into digital marketing and content marketing and now it’s almost like they’ve pulled right back to the traditions and re-examined what they’ve been doing. The rushing into these areas without really integrating it has not paid off for them has it? Is that what you’re talking about?

The Importance of Experimentation

John:

Absolutely, because we’re all trained by the big global companies to market one way especially product marketers and then digital came along and we felt the need to experiment. Coca-Cola are a great example with their 2020 approach and they would put money aside to try things just to see if it would work.

I think a lot of marketers feel that way. We see a new bit of technology come along, a new approach and we think well we need to give that a go. But we don’t really know whether it fits our strategy or not. We don’t know if it’s going to work and so people are experimenting.

I think now increasingly, having had time to experiment, people are coming back and saying well those experiments aren’t really delivering.

You see Mark Ritson challenging content marketing in its entirety as to whether it’s relevant. That’s probably a bit extreme. But it’s a good example of where people are questioning what they’ve actually been experimenting with.

Darren:

Yeah, I’m a big fan of experimentation; I have a science background. But I think it can be a slippery slope can’t it because you can start saying, ‘well I’m going to experiment here’? But unless you bring a rigour or framework to that experimentation it can quickly become a shopping basket of all the things I should do.

Virtual reality and augmented reality are the new things and suddenly you’re doing that and you’re still doing your experiment on social media and how are the Snapchat filters going, you know? How do you, from a CMO perspective, give some rigour or structure to that experimentation? Continue reading “Managing Marketing: The transformation of Higher Education marketing”

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