Reading between the lines of the AANA/Adnews Interview

This post is by Nathan HodgesTrinityP3‘s General Manager. Nathan applies his knowledge and creativity to the specific challenges of marketing management, with a particular focus on team dynamics and behavioural change.

AANA media transparency

Image courtesy of Roger Harvey: www.rogerharvey.net

Finally, after over six weeks of careful consideration and extensive internal discussion, Matt Tapper and Sunita Gloster of the AANA broke cover and were interviewed by AdNews last week on the issue of media agency transparency.

You can be forgiven for missing it though, since the headline for the interview – ‘transparency isn’t where it should be’ – was an award-winning, no-kidding masterpiece of understatement.

But what a reassuring read it was.

At least, it was for those who were able to make it to the end. After all, it was a little long. And quite difficult to decipher at times.  

So, because I’m such a helpful sort, I thought I’d read between the lines of the published interview a little bit, and produce a slightly simplified version of the interview for those of us with shorter attention spans.

I only hope I’ve got it right. I can be notoriously unreliable at interpreting these things. Sometimes wilfully so.

Adnews:

How has the AANA gone about tackling media transparency in this market? Continue reading “Reading between the lines of the AANA/Adnews Interview”

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Why the Australian Association of National Advertisers (AANA) needs to review its membership

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.

I recently expressed concern over the apparent leadership from the AANA on the issue of media transparency and rebates. This is an issue that we have seen develop in the past four plus years and which we have recommended possible solutions to our clients and the industry during that time. But with the latest rebuff from the AANA I posed that the inaction could be due to a possible conflict of interest in their financial membership, which includes agencies and advertisers. Instead of a discussion on the topic there was a rebuttal and then silence.

But while it is convenient to believe that the interests of the advertiser and their agencies are aligned, the recent K2 Report into Media Transparency and Rebates, commissioned by the Association of National Advertisers (ANA) has raised questions over whether this is still the situation. Debbie Morrison, the Director of Consultancy and Best Practice at the UK Association ISBA is quoted as saying “I don’t believe that (the media agencies) have got the best interests of their clients at heart anymore”.

Debbie_Morrison_ISBA

But unlike the ANA and ISBA, along with around 60 other similar advertiser associations globally who are association members of the World Federation of Advertisers, the AANA in Australia has introduced no major initiatives to address this issue and also have agencies among their financial members. Could it be that the two observations are connected?

Not only are agencies members but some have board roles

Although only six of the AANA’s members are agencies, they represent some of the major holding company media groups including both WPP (AUNZ) and their media operation GroupM, which includes the media agencies Mindshare, Maxus, Xaxis, MEC and of course MediaCom. Publicis Media and Starcom MediaVest Group, the Publicis owned media operation are also members, along with media agency OMD Australia from the Omnicom Media Group, part of Omnicom Holding Company. Plus there are the creative agencies The Monkeys and VCCP.

AANA_Members1

Continue reading “Why the Australian Association of National Advertisers (AANA) needs to review its membership”

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What is the definition of Marketing?

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.

Earlier this year I was invited to guest lecture at the EMBA course at the Sydney Business School, University of Wollongong. The topic title was marketing today and I was interested to know how this group of business executives and tomorrow’s leaders defined marketing.

What is marketing

As Chair of the Australian Marketing Institute, I was surprised at the range of definitions often raised in discussions with members of the institute and the diversity of opinions even on the board.

A Google search of definitions of marketing led me to this collection of definitions by Heidi Cohen, that are quite comprehensive and I picked through these to identify particular themes on marketing definitions that I used as a stimulus for the participants in the EMBA course.

Please don’t get me wrong, I am not suggesting any of these are wrong, I am more interested in the diversity of views on what is the definition of marketing and one that as a profession we are able to rally around if there is any chance to have marketing recognised as a profession in the same way that we recognise lawyers, architects, doctors, accountants and the like.

Perhaps agreement on defining the profession of marketing will be a step in the right direction to answer Mark Ritson’s recent question “Shouldn’t an expert in marketing be trained in marketing?”.

Here are some of the definitions collated by Heidi Cohen for your consideration. But more importantly I would like to hear your definition by leaving a comment at the bottom. Mine is here too. Right at the end.

What is marketing? from TrinityP3 Marketing Management Consultants

The AMA says marketing is

Continue reading “What is the definition of Marketing?”

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Retailer undertakes an assessment of their media agency – case study

This post is by David Angell, General Manager of the fast growing Melbourne market and National 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.

Media agency assessment

Challenging Problem:

The marketing team had a strong and long-term relationship with the incumbent media agency, but had noticed a drop-off in quality across the past 12 months.

Additionally, contract material was out of date. The marketing client was unsure about whether or not to pitch the agency business in order to test the market.

Solution:

Rather than going to pitch, TrinityP3 recommended conducting a Contractual Evaluation and Remuneration Benchmarking Exercise, concurrent with a Media Transparency, Performance and Value Assessment.

Process:

The 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.

The 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 four weeks.

Result and feedback:

Our findings revealed the following:

  • Dedicated agency resource was significantly low, exacerbated with a recent rise in volume of work. Furthermore, the balance and composition of resource was sub-optimal.
  • Consequently, the fee paid to the agency, relative to size and scope of business, was also too low.
  • The outdated contract ensured that in other areas, the agency was not competitive.
  • Whilst the quality of the agency output was generally good, it was in some areas not delivered in language or style that the client could engage with. In addition, the marketing client needed to improve internal expectation management at C-Suite level.

Our recommendations demonstrated how to achieve the following:

  • A market-commensurate fee for the agency in return for a higher and more balanced resource. Whilst the fee increased in dollar terms, it was more efficient from a cost per FTE perspective.
  • Fee increase offset by significant reductions in the cost of ad-serving, which was uncompetitive in its current state.
  • Several changes to contractual inclusions and structure which generated greater transparency, and also unlocked potentially hundreds of thousands of dollars in additional value, over time.
  • Process changes on both sides designed to generate higher effectiveness and cut-through in agency output.

Our report allowed the marketing team to make internal improvement recommendations that benefited both the marketer and the agency.

It allowed the relationship to become both more efficient and more effective.

It also ensured that the marketing team could continue with the agency with confidence, and without the stress and cost of a market pitch.

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

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There are great production deals, but here’s why you the advertiser are not seeing them

This post is by Clive Duncan a Senior Consultant at TrinityP3. As a Director and DOP he has an appreciation for the value of great creative and outstanding production values, while also recognising the importance of delivering value for money solutions to the advertiser.

Commercial production rates

If you believe some of the headlines there is no one advertising on television and yet the 13 and a half minutes of advertising every hour on commercial television appears to be full of commercials.

The trade media are busy showcasing the latest campaigns from the major brands with the latest 60 second or 90 second director’s cut of television commercial on YouTube as the headline visual for the story.

So clearly television commercial production is still happening, but perhaps not at the volume seen in the golden years of advertising and not with as many multi-million dollar budgets.

But that doesn’t mean that advertisers are getting great value for money or even getting everything they are paying for and here is why.

Commercial production market is depressed

The production industry is complaining about budget pressures and the volume of work has fallen for television productions. Certainly some of the production houses and directors are focusing on more long form and content work in the face of declining television production projects and spend.

But you would think that in a highly competitive market, with a large number of production suppliers, there would be significant pressure on prices. And you would be right.

There is a high level of discounting happening across the market, sometimes by up to 50% of the past fees as companies compete for the increasingly smaller number of projects and spend in the market place.

There are great deals on a whole range of services

These discounts are not just from the production companies, but right across the production process.

Production crews, who traditionally found the advertising production revenue lucrative, with significant loadings on their day rate, are under pressure to accept longer shoot days for less money.

Those crews with a significant investment in equipment such as grips, gaffers and sound recordists are particularly under pressure as they work to recoup their investment.

Even the equipment hire companies are under pressure and many have responded with significant deals to avoid day rate discounting. The most common is that traditionally, where a production company could rent the equipment for a week for the cost of 3 days, this has dropped to two days, making longer shoots even more cost effective.

But it is not just the shooting process that is under pressure. Many of the post production houses including editing, visual effects and audio are under pressure and offering significant deals. These could be volume discounts like the equipment hire companies, or rebates for volume spend, or simply discounts on the hourly and daily rate.

These deals are not being passed on to the advertiser

Continue reading “There are great production deals, but here’s why you the advertiser are not seeing them”

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Managing Marketing: Putting the value back into agency remuneration

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.

Mike Duda, Managing Partner of Bullish, explores the role of agencies in creating business value for their clients and yet the business model of the majority of agencies is cost recovery centric and not value based. They discuss the role of performance based models and incentives and the need for agencies to transform their compensation models to thrive.

Mike Duda

You can listen to the podcast here:

Follow Managing Marketing on Soundcloud or iTunes

Transcription:

Darren:

Welcome back to Managing Marketing. We’re here in Florida for the ANA Advertising Financial Management Conference and I have great pleasure at the moment to sit here with Michael Duda who’s Managing Partner at Bullish.

It’s an opportunity for me to catch up with someone I first met about three years ago in New York and has been doing some really interesting things. So thanks Mike for making the time.

Mike:

It’s great to be here and it’s good to see you again Darren.

Darren:

Look, one of the reasons that I was really wanting to catch up with you is because I read in the news that you’ve started a new business, you had Consigliere which was sort of the trusted advisor for marketers and you’ve started this new business called Bullish and it has a consumer investment fund. Give me the concept.

Mike:

Yeah, you know, forgive the fore score and seven years ago, this might be ramble. But what I realised back at the end of the 2000 crash is that clients aren’t really the clients. It’s the CEO and the CEO’s clients are Wall Street and if you don’t make your numbers, heads roll.

And it’s not just the CMO as we talk about in our world but it’s the CEOs as well too and things go kind of downhill. I saw something amazing at a 2003 conference with Goldman Sachs.

Walmart went up there and they said they saved 15% in global procurement in 2002 by doing cost-cutting. That was the first time I saw the word procurement. And then if you look, at least in the States, like over the next ten years, procurement people became the new rock stars.

What Bernbach and Ogilvy were in the sixties, procurement was in the advertising industry and I wish that was funnier than it sounds but that’s the God honest truth as you might say.

Darren:

Especially when we’re here surrounded by about 700 of them.

Mike:

Isn’t that amazing?

Darren:

And agency people.

Mike:

Isn’t it amazing? And quite frankly, I got a little bit ticked off that these bloody people on Wall Street looked at my breed as an expense.

Darren:

Yep.

Mike:

Advertising has done well, we’ve seen the stats if you’re listening to this podcast that if you invest in times of downturn, you will reap unbelievable benefits in terms of ROI.

Tough to do. Because you can control the causes but you can’t necessarily fire a plant that makes Pepsi on there but it’s like, you can cut the marketing back.

As you know, the agency model’s predicated on getting paid for the time it takes to create stuff and something just seemed really wrong to me in that we have such an unbelievable talent to combine the left and right side of the brain.

Identify business problems and how brand can do it and then some of the best creative minds in this business to solve business problems and we get paid for the time it takes to solve them, not for the outcomes.

Continue reading “Managing Marketing: Putting the value back into agency remuneration”

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Book Review: Disrupted, My Misadventure in the Start-Up Bubble by Dan Lyons

This post is by Trevor Young, a keynote marketing speaker, strategist and adviser who helps companies and individuals harness the power of owned, earned and social media to build public recognition for their business or personal brand. 

Disrupted is one man’s account of working at HubSpot, a fast-growing start-up enterprise based out of Cambridge, Massachusetts, and a brand well-known in global marketing circles.

Disrupted Book

HubSpot is a marketing software company; its founders, Dharmesh Shah and Brian Halligan, coined the phrase ‘inbound marketing’, and in a genius move to ‘own’ the phrase in the marketplace, they also wrote a book of the same name.

The author of Disrupted is Dan Lyons.  According to his bio on the book’s dust jacket, Lyons is a novelist, journalist and screenwriter. He is currently a writer for the HBO series Silicon Valley.

Previously, Lyons was technology editor at Newsweek and the creator of the groundbreaking blog The Secret Diary of Steve Jobs.  Lyons has written for New York Times Magazine, GQ, Vanity Fair, and Wired.

It would be fair to say Dan Lyons is no mug; he most certainly is a fine writer with an incisive eye for detail coupled with a sardonic, world-weary view of the technology business (others might say he’s simply downright cynical).

Has Hubspot’s reputation been tarnished?

Continue reading “Book Review: Disrupted, My Misadventure in the Start-Up Bubble by Dan Lyons”

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The flawed economics of falling agency salaries and falling overhead rates

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.

It is interesting that when you listen to some marketing procurement and consultants there appears to be a consistent story regarding agency fees that goes like this, “Agency salary costs and overheads are decreasing”.

Falling agency salaries

For marketers wanting to get more agency services for their marketing budget this is a terrific trend because it means that agency costs are falling.

In fact this trend is well documented in Michael Farmer’s book “Madison Avenue Manslaughter” where he demonstrates that agency productivity had been improving since the mid 1990s for ten years when it hit bottom and further cost reductions have been at the cost of talent quality and quantity.

But for procurement and consultants to explain this continued price reduction as reductions in overhead and salary is most likely confusing cause and effect.

Calculating agency overheads

Continue reading “The flawed economics of falling agency salaries and falling overhead rates”

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Five common traps when assessing or defending agency value

This post is by Nathan HodgesTrinityP3‘s General Manager. Nathan applies his knowledge and creativity to the specific challenges of marketing management, with a particular focus on team dynamics and behavioural change.

Assess agency value

Benjamin Graham famously wrote ‘Price is what you pay. Value is what you get.’ He was a smart guy, and one of Warren Buffet’s favourite teachers.

(No doubt though, twenty far less smart people will still be posting his quote as a LinkedIn meme five or six times over the next ten days. Probably alongside yet another fake picture of a pack of wolves, with a trite exhortation to vote or breathe deeply or something. Jeez. What did they do to LinkedIn?)

Anyway. Back to price and value.

Some procurement people, most marketers and almost all agencies prefer to say they concentrate on value over price. Quite right too. Price is pretty useless without knowing what value is being acquired.

Yet so often, the methods clients and agencies use to assess and defend value are, in reality, only measuring price – and not even doing that very well.

Here are five of the pitfalls we come across most often. Continue reading “Five common traps when assessing or defending agency value”

Posted in agency remuneration / compensation, agency solutions, interesting observations, marketing process optimisation, marketing procurement, media planning & buying | Leave a comment

Marketing Directors: are you spending your time on the right things?

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.

Marketing Directors time

 

In my rather long career, I’ve been back and forth on the marketing and advertising sides and have learnt a great deal about where to spend my time and what to spend it on.  

I’ve also learnt a lot about the relationship between time and money. When you get the time right, it makes spending the money so much more enjoyable, targeted, accountable, much more effective and much more inclusive.

All of which means that you’ll lose less sleep, make more friends, be a success in your role and have more time and money – both personally and professionally.

As a marketing director, The Holy Grail really is where you focus your efforts.

The six best places to spend your time (in order of importance)

  1. With your team.
  2. In your company’s channels.
  3. With the team you lead.
  4. With your researchers.
  5. With your end market purchasers.
  6. With your agencies.

Why in this order?

Oh my!….. I didn’t put agencies first – please let me quickly explain why.

Another great thing about having had a long career in both marketing and agency roles in many, many countries is – evidently – that you meet a great many very good marketing and agency people.  You get to see them going about their routines and observing how they manage priorities.

Oddly enough, it all came down to where and how they spent their time.

The really successful marketing directors spent very little time with their agencies.

The very successful agency management I met spent as much time as possible with all of their clients.

The least successful marketing directors spent most of their time with their agencies.

And the least successful agency management spent most of their time in the agency.

Let’s go back to the list and go through it one by one. Hopefully, this will clarify why this makes sense. Continue reading “Marketing Directors: are you spending your time on the right things?”

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