Managing Marketing: The incredibly complex choices facing marketers

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.

Liam Walsh, Managing Director of Amobee talks with Darren on the increased choice facing marketers today with technology companies, management consultants and agencies all competing for the marketing budget and why marketers are increasingly challenged in making these choices in the face of increasing complexity.

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 the managing director of Amobee, Liam Walsh. Welcome, Liam.

Liam:

Thank you, Darren, I’m glad to be here.

Darren:

I’m glad you’re here as well because otherwise I’d be talking to myself. But one of the things we’ve both seen over the last few years is this incredible explosion of consultants and technology companies; the landscape is changing, isn’t it?

Liam:

It sure is. It certainly feels like the consultancies are pretty enthusiastic about this space and having some success.

Darren:

It’ll be interesting to see how they roll out. There have been some high-profile agencies being purchased around the world, particularly by Accenture but there has also a huge amount of scepticism about their ability to integrate cultures isn’t there?

I know Ben Tolley at Clarity (who did the Adam and Eve–DDB purchase in the U.K. and the Monkeys with Accenture here) said culture’s not an issue. What do you think?

Do you think there is a cultural mismatch between consultancy firms and advertising agencies?

Liam:

Yes, I do. I would typify the consulting company, by definition, as doing consulting, which means a lot of looking inside a business or thing, doing a lot of diagnosis, a lot of interrogation and a lot of thinking, a lot of planning, a lot of recommendations.

If you look at an ad agency, it does some diagnosis (not a lot) and it does some thinking (not a tremendous amount) and it does tons of execution. Do those values and cultures align? Not really.

If you simplify that even further you’ve got a bunch of people who spend a lot of time thinking and a bunch of people who spend a lot of time doing.

Darren:

But in some ways, you could argue that’s the perfect linear arrangement. You’ve got all the big thinking at the top end and as it comes down it gets to the point where we need to hand it over to someone to actually implement this and make stuff happen and that’s where agencies come in. And if we own them that means more of that client’s money ends up in our pocket rather than someone else’s.

Liam:

I think from a PNL perspective—absolutely. I can’t remember the name of the car company—Ford or GM—one of them in the States basically bought the entire supply chain for all of the parts and ten years later all the parts became really expensive, really inefficient because they weren’t very good at running those businesses; they were good at building and selling cars.

When I think that from a P&L perspective that makes sense to have more of that chain.

Darren:

End to end integration it’s called.

Liam:

But can the culture survive it?

Darren:

And that’s the point, it’s about the culture. I love advertising agencies because they have the audacity to have this group of people called the creative department, which immediately makes me think that everyone else in the agency can’t be because they’re not in the creative department.

I was one of those people in the creative department for 15 years so I felt pretty good about myself because I was surrounded by all these blinkered, Philistine, non-creative types.

Liam:

Suits.
Continue reading “Managing Marketing: The incredibly complex choices facing marketers”

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The ethics of Client / Agency behaviour: What is acceptable and what is not?

This post is by Darren Woolley, Founder of TrinityP3. With 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.

At the inaugural Mumbrella Asia 360 earlier this month Julian Barrans, Asia Business director and I curated a session on client / agency behaviour based around real life examples of dubious incidents we had either witnessed or had heard about from reliable sources. We put these to the audience to gauge what is acceptable today and what is not.

The world of marketing, media and advertising is changing rapidly, especially driven by technology innovation, which is multiplying opportunities and options and magnifying pressure and demands. But has this impacted the way we work together? And if so how?

Client agency behaviour

To help us explore the behaviours, we recruited two experienced representatives from marketing and the agency world to provide their insights. Our marketer was Virginia Ng, former senior marketer at KFC and our agency leader was Susana Tsui, CEO at media agency PHD APAC.

Each provided their unique perspective to question and interrogate the scenarios presented and provide their insights and feedback on the behaviour before we put the ultimate judgement to the audience that attended the session.

Here we present the same scenarios presented on the day at Mumbrella Asia 360 in Singapore, along with the points and viewpoints raised on the day. But more importantly is for you the reader to provide your thoughts to what is acceptable today and what is not?

Only by the industry considering and discussing these issues can we encourage positive and productive behaviour and discourage the negative and destructive behaviour.

Scenario One – Charitable Mark Up

A marketer has a charity they support as part of their marketing and corporate strategy. But at a fund raising event they realise they have no way to make a charitable donation to the charity on the night so they ask the agency to make a sizeable contribution of $50,000. The agency CEO agrees. Later that month the Marketer receives an invoice for the $50,000 donation along with the agency 10% commission and the 7.5% service fee as per their contract”.

Is this acceptable or not?

Considerations and Findings

There was 100% agreement from the audience that this was unacceptable on the part of the agency, but some of the audience believed that it was also unacceptable for the marketer to put this on the agency. One agency said that worse than this scenario, they had a client ask them to make the donation as an agency with no intention to recoup the fee at all.

Interestingly much of the discussion was about the commission and even though the agency has the ability to charge both a commission and a service fee on external costs, which this definitely qualifies as, most comments indicated that the service fee or handling fee was acceptable, but where the agency had stepped over the line was in charging the 10% commission as well.

Continue reading “The ethics of Client / Agency behaviour: What is acceptable and what is not?”

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How to know if you need to pitch your agency

This post is by David Angell, TrinityP3 General Manager and 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.

pitch your agency

I often get asked by our clients to see them ‘about running an agency pitch’. The decision to pitch, for whatever reason, is generally already taken by the time they speak to me.

Yet sometimes, based on what I hear, my advice is ‘actually, don’t pitch’, for a number of reasons.

Reviewing an agency can often be an intuitive reaction to a given situation, change or perception. But, of course, this doesn’t always make ‘pitching’ the best option.

Loss of IP, disruption to your BAU communications, internal stress and diversion of resource, and the risk of ‘new relationships with the same problems’ are all challenges associated with making the decision to go to market for something shiny and new.

However, on other occasions, pitching is certainly the optimal route to take. Here are ten indicators that tell you that now could be the right time.

1. The agency has failed to follow through on performance KPIs designed to avert a pitch.

In my opinion it’s never fair to pitch an agency that has not been performance managed. Or at the very least, given fair warning and opportunity to discuss issues, and agree on KPIs designed to fix the problems. But if you’ve already taken this approach, and the agency has failed to respond at more than one key milestone – the pitch option is relevant.

2. You’ve taken improvement advice from your agency, yet nothing has changed.

Sometimes, the fault is yours; self-awareness is critical. Listening to an advisor either inside your agency or externally, and implementing steps to improve things on your side is good agency leadership.

Without this due diligence, you can go through a pitch and emerge with a new agency and the same set of problems. However, if you’ve implemented improvement advice without result, there may not be much more you can do with the existing partnership.

3. Consistent dissatisfaction exists through the line, not just at one level.

Make sure you talk to your team and identify red threads of dissatisfaction, from the ground up. Understanding this can help to pinpoint the degree of ‘solvability’ that might exist, before a pitch becomes necessary. One jarring member of agency staff could be swapped out – but if the problems exist through the whole team, it’s obviously indicative of something more challenging. Continue reading “How to know if you need to pitch your agency”

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The Importance of (good) stakeholder engagement in any marketing transformation project

This post is by Zena Churchill, a Senior Consultant at TrinityP3. Over the past 20 years, Zena has worked for some of the biggest international and national brands. Having worked both agency and client side, Zena has strong insight and experience across most facets of marketing, specialising in media, strategy and BTL.

Each year at TrinityP3 we work on many large strategic marketing projects. Ranging from marketing performance solutions to technology solutions to roster alignments, most of what we do will often involve a lot of people across quite complex organisation structures.

Depending on the brief we will engage with CEOs, CMOs, CFOs CTO’s or procurement, as well as pretty much everyone in between. And at times it can, quite rightly, feel like everyone in the business is invested in or involved with the brief we are answering.

stakeholder engagement

Mostly, things run relatively smoothly. We will engage from the outset with a project lead (or two) and be introduced to other stakeholders as the task at hand progresses, or it is deemed necessary. Sometimes, when asked, we will advise up front on who the stakeholders should be, based on the brief and our experience in answering similar business issues.

Life is good. Until those times when it doesn’t run smoothly, and we are left to answer a brief whilst jumping through hoops to please a myriad of stakeholders armed with different and conflicting agendas. When this happens, it can feel like we are performing in a circus without a ringmaster (and the lions are circling).

You see, stakeholder management is a bit like running a circus. There are many people involved, a lot of moving parts and things can quickly go awry if someone does not understand their part in the action. From our experience, we know very quickly from the start of a project if the internal stakeholder management is going to run well. This means we can also tell quickly when it is not going to run well, and we will be dealing with internal obstacles caused by stakeholder disarray.

So, if you have a large-scale project coming up here are 5 tips to help you nail stakeholder management and make sure you end up feeling like a ringleader instead of a trapeze artist without a safety net.

5 signs stakeholder management will run well

1. Trust has been established

Good stakeholder managers build trust across the business, quickly. Ideally, as consultants, we should walk into a business environment that is already on board with the brief at hand, is confident in the person leading the project and is excited about the impending outcome (well, as excited as anyone not in marketing gets about marketing).

A project lead that does not have the confidence of the stakeholders involved is guaranteed to be marred by unnecessary delays, politicking and second guessing and, in some cases, brief abandonment as it all becomes too hard to push forward.

Tip: Before you start the project, spend time communicating the purpose, process and outcome for the brief and how it will benefit the business (and the stakeholder).

2. The stakeholders are the right stakeholders

It is imperative from the get-go that the right stakeholders are included in a project. If this is not done, or not done properly, projects will inevitably be delayed, impeded or at the very worst, cancelled. It is the nature of the organisational beast that not all stakeholders will benefit equally from the outcome of the work we do, for a multitude of reasons.

Nevertheless, the best-case scenario is to have all stakeholders identified and engaged before a brief is signed off and implemented. Worst case scenario is a stakeholder cohort that is complex and many when it doesn’t need to be or stakeholders appearing suddenly from the sidelines staking a claim in the project outcome. Continue reading “The Importance of (good) stakeholder engagement in any marketing transformation project”

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What happens when the best agencies are no longer interested in pitching for your business?

This post is by Darren Woolley, Founder of TrinityP3. With 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.

Recently we have read reports from the CEO of WPP, Sir Martin Sorell and even our own Executive Chairman, Michael Farmer, talking about the almost irrational motivation of agencies to pitch for and win business at any cost. Certainly, with so many agencies in the market, you would think there is no shortage of candidates to pitch for an advertisers business.

But the fact is that not all agencies are equal, yes, some are more equal, or perhaps more desirable than others. In any market there are a handful of agencies that are considered outstanding and then there are the others and behind them the ‘also-rans’.

The fact is this crème of the crop are in high demand and are increasingly more selective about what business they will pitch for and what they are passing on. In quite a few recent pitches we have undertaken a market search brief for some global advertisers operating in local markets.

In each case one of the key requirements was to find an agency that would drive innovation and creativity in marketing, advertising and media. We would develop the long list and as always check in with the agencies on the list to ensure the agency was available without revealing the advertiser, just usually the broad category they belong to. On approval of the agencies to be included in the tender, we contacted the selected agencies and invited them to participate, with up to three of the agencies declining the invitation.

Pitching for your business

Usually the agency would state that they were busy and did not want to stretch their resources. Interestingly none of the agencies were from the big four holding companies in any of these examples. In fact the agencies most inclined to decline the tender invitation have been either ‘hot’ independent agencies or agencies from the smaller boutique networks.

Disappointed that we had up to three of a list of eight agencies decline to participate I thought it worth following up with the CEO of the agencies that declined to find if there were any underlying reasons for them not participating in a new business opportunity.

Of course none of the agencies wanted to speak out on this as it could potentially damage future opportunities when the marketers involved would invariably move on to other roles. But confidentially the agencies did not decline because they were too busy, but declined for a number of very pragmatic and tangible business reasons.

The frustrating part is that the people who could potentially address these issues will never know the real reason they were not attracting the best agencies to their tender. So by way of illumination, here are the real reasons great agencies will be declining your invitation to pitch for your business.

1. “They regularly change agencies and use an expensive pitch process”

No matter the size of the market, from relatively small to enormous, advertising is more like a cottage industry, where everyone knows each other or at least everyone worth knowing but more importantly they know what accounts are available and when they are in play.

This means that if you have a corporate policy that states you go to market with a tender every three years, then every agency CEO and New Business Director will have the date of your next tender in their calendar.

Continue reading “What happens when the best agencies are no longer interested in pitching for your business?”

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Do You Really, Truly Want to Transform Your Agency?

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.

transform your agency

 

Are you tired of being shoved around by clients?  Worried about your fees?  Missing your budgets?  Is your creativity undervalued?  Are your best people quitting for better jobs?  Do benchmarkers set your fees?

Do you remember the good old days, when you trod the gilded C-Suite corridors?  When you were treated with respect?  When your work was award-winning and it really mattered?  When what you did made a difference?  Friend, you need a transformation.  A real transformation.

I don’t mean a get-rich-quick, lose-20-pounds-in-one-month, regain-your-sexual-potency-with-this-simple-herb type of transformation.  Those are fake, and they’re talked about all the time, with zero results.

I don’t mean the kind of transformation that your junior folks or project managers can fumble around with while you’re out beating the new business bushes.

No, friend, this is your transformation.  It requires personal leadership.  Leadership.  Putting your neck out — perhaps for the chopping block.  Taking a position.  Staking your reputation on it.

Here’s what you have to do:

Continue reading “Do You Really, Truly Want to Transform Your Agency?”

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Managing Marketing: Agencies, consultants, mergers and acquisitions

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.

Ben Tolley, Partner at Clarity talks with Darren on advertising industry mergers and acquisitions and the increased activity of consulting firms in this category. And we discuss not just the challenges but also the benefits to advertisers when creativity and management strategy comes together in the resulting entities and the possibility that soon it may be a holding company that is acquired.

You can listen to the podcast here:

Follow Managing Marketing on Soundcloud or iTunes

Transcription:

Darren:

Welcome to Managing Marketing and today I am sitting down and having a chat with Ben Tolley, who is a partner at Clarity, probably one of the big shakers and movers in the advertising industry at the moment because of some significant deals that have gone on, so welcome, Ben.

Ben:

Yeah, good to be here, thank you for having me.

Darren:

Thank you for making the time. There’s been some great headlines in the past 12 months with the industry looking at mergers and acquisitions and that is core business, isn’t it of Clarity.

Ben:

Yes that’s right. We specialise in advising mid-market companies, so companies valued up to a couple of hundred million dollars on mergers and acquisitions mainly focused around advising people on selling businesses and the agency land is kind of a very big part of what we focus on. We’re technology and media focused as a firm and there is a lot of activity in the agency space.

Darren:

Just to put it into context for people, I’ll just mention it was Adam and Eve being acquired by DDB in the UK and the Monkeys being acquired by Accenture here, would probably be the two high profile acquisitions deals that Clarity were involved in for the advertising industry. I’m sure there’s more, but just to put that into context.

Ben:

Yeah, we’ve worked on the buy side as well with people like Dentsu and Havas acquiring the agency businesses in the UK, we are a UK HQed business, and our US partners (interesting for this conversation) advised on the sale of Resource Emirati into IBM interactive experience which is a very similar type of rationale in a way to the Monkeys-Accenture transaction.

Darren:

So let’s talk about that because I know you did an interview recently in the UK where you were talking about the culture between the traditional consulting firms in advertising. Twenty years ago, in advertising I was approached by a consulting firm to come and work for them and I said ‘no’ because I just didn’t see me personally fitting into that culture.

What’s happened in say the last ten to twenty years that makes consulting firms seriously look at agencies as a business opportunity where there won’t be a culture problem?

Ben:

Yeah, that’s a big question. I think in regards to the commentary around the culture clash, it does feel a little bit to me like the James Bond DB5 with the little switch on the dashboard with the smoke that comes out the back. It is a bit of a smoke screen and that is not to say that there is nothing in it but I obviously have enormous respect for people like Martin Sorrel.

And Mark Reeves came out saying a very similar type of thing the other day so these are super smart accomplished people and there is something in it that is worth talking about.

The first thing when you hear people reacting to deals like The Monkeys and Karmarama as well and Accenture and they talk about culture, I think the first thing is to step back and think about is what am I not hearing?

These are very very bright people, Martin Sorrel and Mark Reeves, and they are saying, ‘a bit of a culture clash–I can see that being a problem there’, so what they are not saying is that the service offering that they are able to deliver in combination is unattractive.

Darren:

Or perhaps is superior to what’s already in the market.

Ben:

Exactly, so that’s the first thing on it, these are very smart guys and this is the most negative plausible thing that they can come up with.

Continue reading “Managing Marketing: Agencies, consultants, mergers and acquisitions”

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How TrinityP3 helps measure the performance of marketing – 3 case studies

After more than 15 years of downward pressure on marketing costs, the majority of traditional businesses are struggling to deliver growth and yet marketing provides one of the most successful drivers of business growth and performance when properly invested and measured against performance.

The problem is that in many organisations marketing is treated as a cost of business with little or no focus on the return on that marketing investment. No wonder the strategy of cost cutting to profit has had such a major impact on marketing and subsequently the marketing agencies and suppliers.

But with a trend to Zero Based Budgeting (ZBB) in marketing, especially in Consumer Packaged Goods, but increasingly other categories, and an increased expectation of proving efficacy and delivering return on marketing investment (ROMI), more marketers are looking at how they set and apply their budgets against performance metrics than ever before.

But in a world of overwhelming data, marketers are often unsure of which metrics are the best for measuring performance. This is compounded by the fact that many of the marketer’s agencies, suppliers and vendors will be recommending metrics that are directly attributable to their performance, but are often irrelevant to the performance of the organisation.

Performance of marketing

In our role as completely independent marketing management consultants we bring a holistic view to performance that integrates business metrics with marketing metrics to provide a balanced score card for the organisation, the marketing team and their agencies and suppliers.

Here are three recent case studies of that approach to marketing performance metrics and measures.

Case Study 1

Financial Services – Marketing Performance Measurement

Challenging Problem: A major financial services advertiser had invested heavily in sponsoring entertainment events and products to add value and encourage their customers to participate in high value entertainment products and therefore increase customer transactions and engagement.

This had become a cornerstone or pillar of the company offering as it was seen as a marketing investment for both acquisition and retention. But budget constraints and decreasing customer participation had made the advertiser question the investment.

Creative Solution: TrinityP3 proposed to undertake an independent marketing performance assessment and effectively try and replicate the business case for the program to see if the available data still supported the investment.

It was important that the assessment was empirically measured and evidence based as there were strong emotional ties to the program internally and political support, which had prevented this being undertaken previously.

Process: TrinityP3 was provided with full access to the financial performance of sponsorship, the costs and the performance along with market and customer research to understand the role and impact the sponsorship program had on driving financial performance. Continue reading “How TrinityP3 helps measure the performance of marketing – 3 case studies”

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Ad Industry’s Talent Crisis is a Symptom, Not a Disease

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.

Ad industry talent crisis

 

ANA was brave to issue a “scathing report” (per AdAge) on the lack of talent in the advertising industry.  Certain outsiders were fingered as contributing to the talent problem: universities that “aren’t keeping pace with the industry’s changing needs” and consultancies and tech giants that are offering “more generous salaries and perks.”  (Shame on them!)

On top of this, Millennials remain an enigma — why aren’t they more eager to enter the industry?  What ANA did not describe were the day-to-day operations of advertisers and agencies that have turned the advertising working environment into a relatively unattractive one for job-seeking graduates, a trend that has been in swing and gaining momentum for the past 15 years.

Blame the universities and consultancies if you will, but advertisers and agencies need to take personal responsibility for some of the industry’s talent crises.

Before I proceed further, some full disclosure:  For nearly two decades, I was a strategy consultant with The Boston Consulting Group and a Director of Bain & Company.  During the more recent 25 years, I have been consulting to ad agencies and their clients (as Farmer & Co.) and I have observed a deterioration in agency-advertiser working relationships that is a clear source, in my view, of the talent problem.
Continue reading “Ad Industry’s Talent Crisis is a Symptom, Not a Disease”

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Managing Marketing: The importance of brands and branding in the digital age

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.

Simone Bartley, co-founder and CEO of Together Co discusses with Darren the concept of brand and brand promise and its increasing importance to business in the digital marketing environment and why brand is core to any business requiring the leadership of the CEO.

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 Simone Bartley who is the co-founder and CEO of Together Co. Hi, Simone.

Simone:

Hi Darren, how are you?

Darren:

I’m good but thanks for joining me because we had a conversation about three or four weeks ago about brand.

Simone:

We did, on the couch.

Darren:

It was really interesting because a lot of people seem to be confused about brand these days. Do you find that?

Simone:

I do.

Darren:

Or the role of brands?

Simone:

Well the role of brands: digital has become the focus, hasn’t it? So, everything is lost in marketers trying to understand digital and what it means for their business and how to maximise the nirvana of data and accountability and so forth.

So, brand has taken a back step to a degree but I think there has always been confusion around brand.

Darren:

It’s become more confused because they’ve now got more ways than ever before to articulate and reinforce what the brand is but I think it’s got to the stage where they’ve lost sight, in some cases, of the fact that there is a need to have a brand.

Simone:

I would say that there are enough companies that still understand brand but it’s those that are really not willing to invest in brand that are the ones that choose not to understand it.

Because it is an investment. If you think about great brands and the value they have sitting on balance sheets around Apple, Coca-Cola, Google, all the top brands in the world—brand valuation is important at the end of the day.

Darren:

It’s interesting that you should say that because I’ve had quite a number of discussions with CFO’s that go, ‘there’s no brand on our balance sheet’ and I go, ‘it’s probably called goodwill’ and they go, ‘oh, ok’.

Goodwill is a big part of it and in a way brand actually is the encapsulation of good will, isn’t it? Because that’s the way your customers who bring value to your business perceive your business. Goodwill is all about their perception of your business and brand.
Continue reading “Managing Marketing: The importance of brands and branding in the digital age”

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Can management consultants teach ‘value’ to the advertising agencies?

This post is by Darren Woolley, Founder of TrinityP3. With 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 to see how the advertising industry has reacted to the recent acquisition play of the management consultant firms like Accenture and PWC. Some people embrace the trend while others are sceptical as to the efficacy of the strategy.

Will Accenture be able to leverage the value of their investment in Karmarama and Monkeys on opposite sides of the world? Or will what is seen as fundamental cultural differences cause it to fail? Time will tell.

But of course other management consultant firms are not acquiring these skills through acquisition, but building them in house such as Deloitte and their digital practice, PWC and even KPMG. Likewise, we are seeing many of the agencies, particularly IPG MediaBrands now offering technology and digital consulting services as part of their media offering and Ogilvy and M&C Saatchi competing with business consulting offerings too.

advertising agencies value

But as Michael Farmer recently pointed out there is a fundamental difference in the approach between advertising agencies and management consultants when it comes to fees. To paraphrase Michael’s point, management consultants focus on improving bottom line results and charge accordingly, while agencies are focused on improving marketing and brand metrics such as awareness and desirability, which is valued less by marketers and their organisations.

This was recently sharply demonstrated by a recent conversation with a Board Adviser in the middle of a merger, and their story reminded me of a similar story from a few years back, which highlights how agencies need to change their focus and their understanding of value if they want to compete.

Pricing yourself into profit

A recent conversation with a board adviser for a company going through a merger / acquisition was enlightening in regards to the role of the management consultant firm.

The consultants were providing board and management advice on the process including legal, financial and accounting advice in a major merger. But at a critical point in the process, a question arose on the brands of each of the merging companies and the best strategy for either rationalising or managing the resultant large portfolio of complimentary but potentially duplicated brands and their services.

The management consultants immediately offered to provide this advice and provided a proposal to provide a full review of the brand portfolio with recommendations on the best strategy for managing the resulting brand portfolio. The work would need to be delivered within 2 – 3 weeks and the management consultants did not blink when they tabled their $670,000 proposal for the work.

Continue reading “Can management consultants teach ‘value’ to the advertising agencies?”

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Let’s Hear It for Madison Avenue’s Makeover!

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.

Madison Avenue Makeover

Social media has turned us, I regret to say, into relentless, dour critics. In the advertising industry, every misstep is pounced on and amplified. Dove, Pepsi, McDonald’s and their agencies are pilloried for trying and failing. Misjudgments, mistakes and tone-deaf efforts are treated as capital crimes.  I’m as guilty as anyone, having written a long critique of ad agency management in my recent book, Madison Avenue Manslaughter, and in writing these weekly pieces.

Whatever my (and our) good intentions might be, non-stop criticism is soul-destroying. It makes us tiresome and grumpy.  At a certain point in time, we need a shift of focus, from the negative to the positive — from Madison Avenue’s Manslaughter to Madison Avenue’s Makeover.

Let’s hear it for those who are grappling imaginatively with today’s brand problems and solving them quickly and effectively!  Let’s follow the fortunes of tomorrow’s potential winners!

Top of my list for this week is the newly-launched effort by Vaughan Emsley and Cliff Francis, two seasoned ex-Saatchi & Saatchi hands, who are going to market as Clean Up on Aisle 7.

Don’t be fooled by the company name — Emsley and Francis are senior brand strategists and creative thinkers who handled Saatchi & Saatchi P&G business for more than a decade, and they are less in the business of cleaning up messes than finding new directions for brands that have lost their way.

We don’t compete with a client’s roster,” said Emsley in a recent interview.  “Clients want to continue to work with their existing agencies.  This does not mean, though, that their agencies can solve all their brand problems.  Many brands have lost their purpose in the marketplace, and the existing campaigns and initiatives do not work effectively.  Clients need quick and insightful work that redefines a brand’s foundation so that effective campaigns and initiatives can be planned and implemented.  That’s where Cliff and I come in.

Clean Up on Aisle 7 works on projects that last no longer than three to five days.  Period.  Emsley and Francis immerse themselves with the client’s brand teams to review brand data and positioning.  “The problems and insights come very quickly,” said Emsley.  “We uncover the answers that the organization has always known … but never articulated.  Drawn-out strategic processes are the worst way to solve fundamental problems.  It’s the opposite of ‘many hands make light work.’  It takes short, intensive sessions to deliver insights.”

“Doesn’t this repudiate the need for big data,” I asked?
Continue reading “Let’s Hear It for Madison Avenue’s Makeover!”

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Why working / non-working ratios no longer work for advertising

This post is by Darren Woolley, Founder of TrinityP3. With 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 ninth in a series of one minute videos that address one of the many complex challenges facing marketing, media and advertising today. The Golden Minute series is an attempt to prove Albert Einstein right when he said “The definition of genius is taking the complex and making it simple”. But he also said “Everything should be made as simple as possible, but not simpler”. So we will leave it for you to judge. Please let us know here if there is a topic you would like us to cover in a Golden Minute.

 

As an industry we, love our terms. Usually they are TLA (Three Letter Acronyms) like ATL, BTL and TTL. Or RFP, RFT and RFIsMarketing technology digital buzz words are making this even crazier.

But there is a concept which has recently made a prominent return to the industry and yet it is totally outdated and no longer relevant. That is Working and Non-Working Spend.

The reason for the sudden resurgence is a combination of management consultants who are pushing Zero Based Budgeting, not so much to drive marketing performance and return on investment, but more as a marketing investment framework to reduce the marketing investment and therefore budget.

The second source is the increased activity in investments in traditional consumer package goods brand companies by private equity and venture capital. Their use of the term is to inform the market that they have magically discovered the investment strategy to turn the flagging performance of these entities around by simply reducing non-working spend and improving the working to non-working ratio.

In fact, as I write this, it seems so self-evident that you wonder why the schmucks that owned the business before it was bought by these clever investors had not done this already.

Why wouldn’t you reduce non-working spend. After all, if it is non-working why are you spending anything on it anyway?

What is Working and Non-Working Spend?

That is until you understand what working and non-working spend actually represents. Working spend is traditionally considered to be a media-related expenditure. That is the cost of the media that places the message into the sight of the potential customer, and hopefully persuades them to take an action such as buy the product or service of the advertiser. Clear?

So what is non-working you ask? That is all the other costs associated with this process. It includes the agency fees, the production fees, and the costs of producing the content that runs in the media advertising.

The working to non-working ratio for a long time was considered 10%, being that for every dollar you spent on the media, the other costs associated with that spend should be no more than ten cents.

Continue reading “Why working / non-working ratios no longer work for advertising”

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The dangers of pitching your agency on a regular basis

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.

Pitching your agency

Do you work for a company that routinely has you take your contracted agencies to pitch every three years? Is this mandated by finance or procurement? Or is this something that the marketing team believe is the best option? We know that many organisations have a habit of going to pitch every three years, just as we know that in every switched on agency there is a new business person who marks down the date of your last pitch with a note to call you in two years and six months hoping to get on your next pitch.

But here is the thing you are missing. It is highly likely that while you have justified this practice as being good governance and due diligence, it is possible that you are wasting significant amounts of money and possibly doing damage to your corporate reputation, along with the performance of your brand and business.

Now you may think this is counterintuitive advice coming from a company that you may associate with pitching, but the fact is pitches are less than 10% of the strategic management consulting we do and secondly it is the other 90% of work on marketing and agency roster performance that has informed this opinion. But let me explain as to what we have observed.  Continue reading “The dangers of pitching your agency on a regular basis”

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The Other Opioid Epidemic: The (Brief) High from Chasing New Business

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.

The agency CEO asked me not to use his name.  He wanted to talk privately over breakfast.  “You know, this new business thing is getting to be a problem, he said.  “We’re addicted to falling in love with our next new client, and the one after that and the one after that.  They will solve all our problems.  We’ll do great award-winning work, be well paid, and loved in return … and all the industry crap will disappear.  We’ll pour our heart and soul into winning them.  They’re coy; both flirtatious and distant, making us want them even more.  We’re no better than lovesick teenagers.  And when it goes our way, and we get together and have a wonderful first year, it’s true love … before it turns to crap.  We hate the crap.  We would rather be in love.  That’s why we love new clients and everything it takes to win them.”

Are agency-client relationships becoming loveless marriages that end up on the rocks?  Do the divorced partners, free of the ties that bind, become serial daters, falling in and out of love so often that “commitment” sounds boring and dated — something that was done by their parents in another creative era?  If brands are the children of agency-client relationships, what will happen to them as they’re shuttled from one relationship to another? Will they grow and make positive contributions?  Or, more likely, will they underperform (as they are today)?
Continue reading “The Other Opioid Epidemic: The (Brief) High from Chasing New Business”

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