Why measuring media value is more important than media cost

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 next 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.

Mega successful investor, Warren Buffet, famously said “Price is what you pay; value is what you get”. But when it comes to media the discussion is almost always about price – price and quantity such as GRP, CMP, Impressions, spots and the like.

These are all measures of quantity of media and quantity of audience delivery, but rarely is there a measure of quality. After all, quality of media is a much more difficult attribute to measure or validate.

But the lack of quality measure or at least the difficulty in creating one should not be the reason not to try. The lack of this quality measure is what contributes to the perception that media is simply a commodity that is to be negotiated and bought by the ton.

In fact it was only recently that a long term marketing procurement specialist tried to correct me on this, saying that media is the oldest commodity in advertising. But there are some major implications if you accept that media is simply a commodity to be purchased as volume at a price.

The first issue, which we are already witnessing, is the treatment of media as a commodity as evidenced by a procurement approach for media based on value and price. I remember the first time I was witness to a procurement process of a reverse auction on media buying with the buyer asking agencies to bid on supplying media with a committed cost per thousand (CPM) with the lowest CPM bid the winner.

Even as recently as the past month we have seen media agency contracts awarded based on a commitment to the lowest cost per volume, without consideration for the performance and relevance of that media being purchased.
Continue reading “Why measuring media value is more important than media cost”

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5 ways to further reduce the influence of marketing in your organisation

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.

Influence of marketing

Any marketer, obviously, would want to increase the degree to which their discipline infuences the organisation in which they work.

At least, you’d think so, wouldn’t you?

In fact, in our experience the best efforts of some marketing teams can sometimes have quite the opposite effect.

Here are five of the quickest ways we’ve seen to make a marketing team less influential. Have you and your team ever been guilty of any of them?

1. Be lazy with your budget-setting

We all know you can set your marketing budgets top-down or bottom-up.

Both approaches have strengths and pitfalls, and we’ve blogged about this plenty of times before (see here). Smart marketers usually do a bit of both.

But budgeting top-down often seems quicker and easier to many marketing teams. Especially for the ones having trouble measuring or proving the effectiveness of their marketing activity.

It’s not that hard to take last year’s budget and add 10% – or reduce it by 10% if there’s some cost pressure (responsible marketing team that you are).

It’s a lot harder to apply zero-based budgeting, and to have to generate a business case for every dollar you spend. All those presentations, data analysis, insecurity and uncertainty …well, it’s not for everyone, is it?

But be aware that, in most cases, if you budget top-down in isolation, you are probably setting marketing up as a cost rather than an investment. A luxury rather than a vital neccessity.

And you know what accountants like to cut when things are tight?

2. Use your customer data problems as an excuse

Almost every marketing organisation we’ve worked with over the last year alone has problems with accessing, analysing or applying their customer data. Usually all three. And the solution – the one where everything is migrated, silos are removed, integrated systems talk to each other, dashboards are on every desktop and everyone is a CRM expert– is always ‘about a year away’.

So if you’re a sensible marketing team (like most of the ones we work with) at the very least you use what information you have to produce the best result you can, and then capture data as you go to test, learn and optimise.
Continue reading “5 ways to further reduce the influence of marketing in your organisation”

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Who Can Join the Madison Avenue Makeover Club?

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 MakeoverThe Madison Avenue Makeover Club is an exclusive one.  Want to join?  If you have to ask, you’re not invited.  It’s more exclusive than the Bohemian or Belizean Groves, or the Alfalfa and Yellowstone Clubs put together.

Thinking about the Trilateral Commission? Bilderberg Group?  They’re a piece of cake. The Makeover Club (we’re insiders, and that’s what we call it) invented the word exclusive. It’s posh, privileged, swank, ritzy, respected — and open to the exclusive few who can qualify.  It’s not for the Madison Avenue Masses or the perpetual victims of Madison Avenue Manslaughter. Membership rules are very strict.  Want to know more?

We’re a club of partners, not of vendors and masters.  Let me explain.  Partners work hand-in-glove with one another on important matters. Partners are equals, as comfortable together in front of a spreadsheet as in front of the fire with a glass of Armagnac.

We’re equally competitive (not with one another) in wanting to destroy our competitors and succeed together.  We’re winners, with a track record of success and of making big things happen, both separately and together.  We create success for one another, and this includes making very comfortable amounts of money — a fraction of the value that we generate together.

What’s unique about our partnership is the shared belief that we can turn current brand underperformance into future brand growth in the marketplace.  Millennials?  They don’t scare us.  Amazon and e-commerce?  There are solutions.  Transparency?  Private label competition? Digital effectiveness?

Continue reading “Who Can Join the Madison Avenue Makeover Club?”

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If your marketing function is not driving growth you’re not doing it right

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.

One of the big issues facing marketing is the perception, commonly held in businesses, that it is nothing more than the ‘colouring in department’. It is a demeaning phrase and one I heard earlier this year when I was invited to participate in a CEO Forum in the City by one of the accounting firms.

Marketing Function

Is this how the CEO sees the marketing department in your organisation?

It was a breakfast meeting with a speaker presenting on how to drive business growth in low growth economies. There were about forty CEOs all enjoying pastries, fresh fruit and yogurt. Most were from medium to large private businesses predominantly with a business-to-business focus.

The presentation soon gave way to an open discussion between those present on the drivers of growth, with a heavy emphasis on the sales function as the real driver of revenue growth. Marketing did not get a mention until the speaker asked about the role of marketing and one of the CEOs delivered his knock-out put-down of marketing, which was met by the general consensus of the others in the room.

Reflecting on this, I considered how the marketing and sales function works seamlessly in our own B2B professional services business. It is a seamless and integrated approach that starts with defining the business requirements and the revenue and growth objectives and identifying the segments and services we believe will deliver this growth based on past data and informed by market changes and customer trends.

Six years ago we implemented a major change in marketing direction, moving from a traditional out-bound marketing approach to an in-bound marketing strategy. This meant we went from a sales support model for marketing to one under which content marketing, SEO (search engine optimisation) and social media drove customers to our website and content.

At that point automated marketing would help identify those customers and score their sales potential with encouragement to make an enquiry and become a lead. This lead would then be handled by sales to discuss the needs of the client, propose a solution and convert the lead to a sale.

Continue reading “If your marketing function is not driving growth you’re not doing it right”

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Managing Marketing: The impact of deregulation on the dramatically changing advertising industry

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.

Simon Canning is a well-known and highly respected marketing commentator who has worked on both the trade media and agency side for the past 25 years. Here he shares and discusses the changes, but more importantly the key decisions and their impact and implications on the advertising industry today.

Simon Canning

You can listen to the podcast here:

Follow Managing Marketing on Soundcloud or iTunes

Transcription:

Darren:

Welcome to Managing Marketing and today I get a chance to sit down with a long-term friend and colleague; someone who is highly respected in trade media as a terrific commentator and a journalist about everything in media, advertising, and marketing and that’s Simon Canning.

Welcome, Simon.

Simon:

Thanks for having me here, Darren.

Darren:

It’s great to catch up because it would be almost 25 years ago…

Simon:

Yeah, 22, 24 years ago – something like that.

Darren:

When I was a copywriter and creative director, president of the Melbourne Advertising and Design Club. What was the journal you were writing for?

Simon:

At the time I was editing ‘Adbrief’, which was the famous industry gossip sheet that we printed on a Friday afternoon and agencies would have couriers waiting outside the print shop waiting to pick up the first copy and race it off to the MD and the CEO to see what was pitching, what was happening, who’d been fired, and also it had lots of insightful analysis about what was going on and just a little bit of gossip.

Darren:

I remember within an hour or so there were photocopies with highlighter circulated right through the agency if you were either mentioned or you’d missed something. Because we’re talking the early days of email in a way.

Simon:

Email was barely a flicker in the eye and the internet didn’t exist to all intents and purposes so the channel we had was a print channel, a newsletter channel.

Darren:

And couriers.

Simon:

Couriers would race out and those who would get it mailed out to them would get it Monday morning in the mailbox and they would be ripped open. But if you’d really hit a nerve somewhere then that phone would be ringing straight away.

How the advertising industry has changed since deregulation

Darren:

It’s amazing how in a relatively short time the industry has changed so much hasn’t it?

Simon:

Yeah it has. I’m in my third decade now of covering the industry and commentating on it and seeing how it’s changed and I’ve got to say the biggest thing that’s triggered it besides technology the thing that’s really affected the industry was the death of accreditation, the guaranteed income that agencies had through the fact that they were effectively the bagmen for the media companies, Fairfax, the News and the Networks etc.

Those big media companies were never exposed to the threat of non-payment because the agencies had a deal that had effectively been authorized by the ACCC at the time where they’d get in total 17.5% loading on their media buying for the fact that they would have the billings sitting in the bank waiting to be handed over to the media owners.

In terms of agencies it was money for jam. And it was the beginning of that whole accreditation system that had existed from the late 70s and was the reason creative and ideas were never valued.

And that’s something if you look back over the last 20 or 25 odd years it’s still something the industry is struggling to come to terms with: how do you value a great idea?

That real shift in the revenue stream of agencies – I get the feeling the industry is still yet to recover from. Continue reading “Managing Marketing: The impact of deregulation on the dramatically changing advertising industry”

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What Is Plan B for Ad Agencies and Holding Companies?

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 agencies holding companies

We’re all familiar with “Plan B.”  It emerges out of the haze when Plan A has self-destructed for one of a thousand reasons.  An unexpected snowstorm cancels our flight. We’ll have to scrub a key meeting.  Too bad.  On to Plan B.

If  there is no Plan B, we’ll have to improvise.  We’re usually unhappy with Plan B.  It’s a necessity, born of circumstance.  We shrug our shoulders, wistful and disappointed.  Oh, well.  Plan A was so much better!  But … it isn’t happening.

So it is for ad agencies and holding companies today.  Plan A is not working.  Money and growth are drying up, and it’s hard to recruit and retain talent.  Something has fundamentally changed in the marketplace.  Sigh.  Do we work harder on Plan A or do we need a Plan B?

For agencies, Plan A was born during the heady media commission days, when TV advertising was new and the consumer economy was accelerating in top gear.  Highly creative TV and print ads excited agency clients, who (encouraged by their agencies) spent vast sums on media, showcasing agency work.

The better the creativity, the more clients spent on media and the better their brands performed.  Creativity plus media spend generated positive results.  Creativity plus media spend made agencies rich and successful.

Plan A for the holding companies was different.  They acquired agencies that were commercially successful but poor at managing their operations. Agencies frittered away their high commission-based income.  Agencies overinvested in headcounts, salaries and overheads.  They underperformed in margin generation.  They could be squeezed for better profit performance through holding company-imposed budgets.

These two Plan As were colossally successful for decades, through the ’60s, ’70s, ’80s and ’90s, but they fell on their face in the 2000s.  Brand growth slowed, and no amount of Plan A creativity made the slightest dent in brand performance.  Globalisation, Millennials, e-commerce, procurement and fragmented digital/social media stopped Plan A’s success in its tracks.

Plan A cost-squeezing by the holding companies ran its course and surplus agency resources disappeared in 2005, leaving agencies with inadequate headcounts and underpaid resources to deal with their clients’ complicated brand stagnation problems.

Clients cut back on spend and invested in in-house agencies.  Holding companies innovated with holding company relationships, but agency squeezing remained their primary strategy.

Plan A has played itself out for ad agencies and holding companies.  Plan A strategies will not generate growth or positive returns in the future, and those agencies and holding companies that continue down Plan A pathways will pay a heavy price, indeed.

Oh, well.  Time for Plan B.
Continue reading “What Is Plan B for Ad Agencies and Holding Companies?”

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2017 in review and predictions for 2018 from the TrinityP3 marketing management consultants

How was your 2017? What were the highlights of the year for you? And what is your top priority for next year? What was the trend that affected marketing this year? And what will most impact marketing in the coming year?

As this year comes to a close it is time for reflecting on the year that was and looking towards the year ahead. We put those questions to the TrinityP3 Marketing Management Consultants and here are their answers plus some advice for marketers for the year ahead.

2018 marketing predictions

We would love to hear your thoughts on the past year and the year ahead. Join the conversation here on our LinkedIn company page and our Facebook page.

(In alphabetical order by first name)

2018 marketing predictionsAnita Zanesco, Senior Consultant –High Performing Team Coach 

What was the highlight of 2017? 

Seeing my youngest child off to Kindergarten and watching both my “babies” grow into thoughtful, happy, kind children.

What is your top priority in 2018? 

To get more involved in new business and strategic consultancy projects.

What trends did you see affecting marketing during 2017?

Quantity and quality of data available and knowing how to use it – impacting marketing positively when data is used properly and negatively when marketers get “bogged down” in the data and forget to step back and look at the bigger picture.

What do you think will have the biggest impact on marketing in 2018? 

Using customer data more effectively to target communications more precisely to reach the right people at the right time.

What advice do you have for marketers in 2018?

Go back to the core of what marketing is all about and the difference it can make to business and brands. Importantly, senior marketers take responsibility for training younger marketers to get the basics right – they are the future. Most of all be brave and find ways to stand out from the pack.

What’s your New Year’s resolution?  Continue reading “2017 in review and predictions for 2018 from the TrinityP3 marketing management consultants”

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When is the right time to set an Engagement Agreement? Three case studies

Engagement Agreements are an effective way of defining the ways of working between advertisers and their agencies. One of the best times to undertake the process of defining the relationship and the expectations of both parties is at the beginning of the relationship, rather than waiting for things to either go wrong or for poor practices and misalignments to become major issues.

It is therefore interesting that many advertisers, having gone through an extensive selection process to select a new agency do not then embrace or implement a structured on-boarding process to establish the relationship quickly and efficiently.

It is understandable that having appointed a new agency many want to immediately get on with working together, but nevertheless there is still the need to successfully transition in the new agency and transition out the old. This transition process is important in setting up ways of working and establishes expectations on both sides to minimise the opportunity for misalignment and miscommunication.

agency engagement agreements

Also the appointment of a new agency is not just about establishing a new relationship, but depending on the role of the new agency, it increasingly impacts on the way the roster of agencies work together. Changes in either the agency of record (AoR) or the lead agency or any one of the core strategic agencies can create changes in the way the marketers and their agencies work together.

Therefore the appointment of a new agency appears to be the ideal time to undertake the Engagement Agreement process as a way of re-aligning the roster and the new agency to the ways of working together.

Here are three case studies of ways the Engagement Agreement process have been used immediately on appointment of a new agency and where delays in establishing the ways of working have led to issues further into the relationship. Continue reading “When is the right time to set an Engagement Agreement? Three case studies”

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How To Transform Your Agency Relationships!

This post is by Stephan Argent, President of Agency Search and Media Management Consultancy Le Riche Argent and a member of the Marketing FIRST Forum, the global consulting collective co-founded by TrinityP3

This week, we thought it would be worthwhile looking at some ideas to help transform your agency relationships. And we don’t mean just make them ‘bearable’ – we’re talking about making a transformative shift in the overall relationship and yes, better business results.

How To Transform Your Agency Relationships!

As a general rule, the earlier we’re brought into to help identify and resolve client / agency issues, the more likelihood there is of being able to help clients avoid triggering a search, and instead getting their agency relationships not just back on the track – but transformed into positive, business building partnerships.

Sounds good, doesn’t it?

Well, not only does it sound good, but a positively transformed agency relationship doesn’t require a huge amount of effort to be readily achieved. Here are eight ideas to help transform some of your agency relationships:

Define Goals

Does everyone on your team and at your agencies clearly understand your business goals and objectives? If you’re not sure, the answer is (emphatically) ‘no’ they don’t and your first step in any transformation process should be to ensure your team and your agencies are completely clear on the objectives they should be striving for.  Anything less and you’re setting both yourselves and your agencies up for failure.

Encourage Directness

Continue reading “How To Transform Your Agency Relationships!”

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Something about Facebook all marketers who care about the environment need to know

This post is by Chris Sewell, Business Director at TrinityP3. Chris has a wide ranging knowledge of all areas of the advertising and procurement world and specialises in helping companies understand the environmental impact of their marketing spend. 

Recently we were privileged to have a research project accepted and undertaken by the University of Sydney under their Post Graduate Masters of Sustainability Program.

TrinityP3 has been advocating a pivot to a more sustainable approach to marketing and also supplying carbon emission measurement using the CO2counter for over 8 years using our own developed and verified methodology. We felt it would be good to get some up-to-date research from a highly recognized source.

social media advertising

We posed the question ‘What is the carbon impact of both the production and consumption of internet advertising’?

TrinityP3 in conjunction with The Gaia Partnership acted as the sponsor and workplace mentor for two students and we helped narrow the research criteria to focus on social media advertising. This is a condensed paper from the students where they examine the GHG emissions from Facebook.

Below is a summary outlining the extensive research carried out by the students.

Is Social Media an Environmentally Sustainable Marketing Strategy?

By Yao Yang & Wanting Fu of University of Sydney as part of their Masters of Sustainability Programme Capstone Research Project 2017.

The Interactive Advertising Bureau (IAB) online advertising expenditure report (2016), indicated that the Australian online advertising market grew from $1.6 billion in 2015 to $6.8 billion for the full financial year ending 30 June 2016.

Online advertising is developing into the main method employed by the advertising industry. To achieve their marketing goals efficiently, companies are expected to create and produce more and more online advertising content, utilise the latest technology which in turn increases the amount of data in the market.

In a survey we conducted of customers’ attitudes towards online advertising, the results show that a lot of people have negative emotions about Internet advertising, such as traditional banner advertising, static banner advertising, and pop-up advertising.

However, respondents have a more neutral attitude, even positive attitude towards social media advertising. Therefore we observed an increasing number of marketers focusing on social media marketing.

Nevertheless, the environmental effect of online advertising, particularly Greenhouse Gas (GHG) emissions, remains uncertain. Additionally, many customers and marketers believe that internet advertising does not release GHG emissions; however, this is a false assumption.

The question that needs to be asked is will social media advertising be an environmentally sustainable marketing strategy? To attempt to answer this question let’s examine two of the elements: data usage and electricity usage.

The Formula for Calculating Carbon Emissions in Social Media Advertising

Facebook is the world’s foremost social media platform; it enjoys higher usage time per person than any other social media application. Therefore, this project will use Facebook’s advertising business for this research (Facebook, 2017).

In 2016, according to Facebook their total carbon footprint was 718,000 metric tonnes of carbon dioxide equivalent. Offices and other business activity accounted for 28% of the carbon footprint. The other 72% is from the data centres (Facebook, 2017).

Facebook currently offers several different advertising formats, such as photo, video, slideshow, carousal, collection, canvas and lead advertising. The most popular format is photo advertising, which takes the form of one image plus text. The size of the image is 1200628 pixels, the text limit is 90 characters and file size is approximately 154 KB (Social Media Image Sizes Cheat Sheet, 2017). We calculate that when customers see the photo advertising, the end user will consume 190 KB of data.

Continue reading “Something about Facebook all marketers who care about the environment need to know”

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Madison Avenue Moneyball: Insights About the Game of Advertising

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 Moneyball

By now, we know what “Moneyball” is:  The best-selling book about baseball by Michael Lewis (2003), the Academy Award-nominated movie with Brad Pitt (2011) and — most importantly — the underlying concept that obscure metrics reveal the truth about how the game of baseball works.  Moneyball general managers, like Billy Beane of the Oakland A’s, could consistently win games despite payroll disadvantages that prevented the A’s from hiring expensive talent.  Lewis asked, “How’d they do it?  What was their secret?”

Is there a moneyball strategy for the game of advertising?  Is there a secret way for beleaguered agency CEOs to compete and become “winners” again?

Baseball fanatics had, for many years, raised questions about the relevance of the statistics gathered by the Elias Sports Bureau, which kept the score sheets for Major League Baseball.  Hits (singles, doubles, triples and homers) were lumped together in batting averages, but walks were completely ignored.

A batter with high RBIs was evaluated as a hero, even though the batters before him made it possible by getting on base.  If batting averages and RBIs were maximised through high player salaries, would a team always win? Not at all.

Beane used a full set of baseball statistics, sabermetrics, to identify how to put together a low-cost team that maximised on-base percentages and runs.  His success challenged the assumptions about what it took to win in baseball.  It wasn’t all about money.

The game of advertising is less clear-cut than baseball, but many of the fundamental questions are the same.  What is the nature of competition?  What defines “winning?” What are the generally accepted metrics of the game?  How are teams put together?  How well are game strategies working?  What “hidden” metrics give a different picture of what matters?  Is there a Billy Beane strategy for creative agencies? Continue reading “Madison Avenue Moneyball: Insights About the Game of Advertising”

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Managing Marketing: The challenges and changes in automotive 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.

Peter Anderson is an Automotive Journalist and chats with Darren about the changes and challenges facing the automotive industry and how the category is adapting to the changes including autonomous motor vehicles, alternative fuel, falling motor vehicle ownership amongst the Millennial Generation and addressing the needs of women buyers.

You can listen to the podcast here:

Follow Managing Marketing on Soundcloud or iTunes

Transcription:

Darren:

Welcome to Managing Marketing and today I get a chance to sit down with an old friend (not old but a friend I’ve known for a long time), Peter Anderson, who is a freelance automotive journalist of quite some renown. Welcome, Peter.

Peter:

I hope I’m of some renown.

Darren:

Yes, you get your name out there quite a lot attached to a whole lot of stories about motor vehicles.

Peter:

Well I’m an attention-whore, so that probably helps.

Darren:

But it’s interesting because it’s one category of business that is really going through some disruption as they say.

Peter:

Huge transformation.

Darren:

Because one is technology. The other is the way technology is impacting on the way people think about cars.

Peter:

Everything from start to finish about tech including sitting on a train watching car videos right through to what’s in that car? What powers that car? Do you plug this car in or do you fill it with fuel? Right across the range the second someone wakes up and says I want to buy a car it’s completely different to the way you or I bought our first cars 20 or 25 years ago.

Darren:

Well, I bought mine off my father and he was going to trade it in and he said, ‘if you pay the trade-in price’. I bought a lovely type 3 Volkswagen station wagon off my father.

Peter:

Oh nice. It’s probably still going somewhere.

Darren:

It is. In fact, he was very disappointed because when I sold it about five years later I got more money than he sold it to me for and he tried to get me to pay the difference.

Peter:

Are you sure that’s not my dad, is it? They sound like the same.

Darren:

I think all dads are the same. What was your first car?
Continue reading “Managing Marketing: The challenges and changes in automotive marketing”

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Spielberg or Ridley Scott, who is the right director for your TVC?

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.

director for your tvc

If you had the budget which director would you choose? and why?

Most advertisers leave the selection of a TVC director up to the agency. And rightly so, it is often very difficult to recognise what a director has actually brought to a project apart from management and communication skills (or is this all that is required of a great director?) And the agency, especially the Executive Creative Director, will remind you the selection of the director will make or break the production and no advertiser will want to put the whole production budget at risk.

Let’s face it, making an audio-visual communication whether it’s a 2 hour long narrative or a 30 second TVC is a team effort. So not only do you have to be mindful of who the director is but who his or her team is, is just as important.

Of course the TVC budget will often have a bearing on the director. I have worked on many TVCs where the agency put forward directors that were way over the advertiser’s indicated budget and the agency has had to go back and find more affordable directors. This means the agency has wasted their own resources and the advertiser’s time (money) all because the agency thought they could talk the advertiser into the more expensive director.

Personally, I applaud these advertisers for standing firm, after all, what is a target budget for? When I see the cheaper director’s result I often wonder what the more expensive director would have brought to the table because if the TVC is tightly scripted and storyboarded the director has very little room for improvement.

I have seen expensive (often touted as more “creative” than the alternatives) directors bring extra content into the TVC that needed a well scripted 30 second TVC to be extended to a 45 second TVC thus playing hell with the media buy. The 45 sec TVC gets a few spots on air to comply with the eligibility for award entries and then the media schedule goes back to the originally scripted 30s.
Continue reading “Spielberg or Ridley Scott, who is the right director for your TVC?”

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Why Agency Makeovers are Difficult

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 makeover

Organisational stability is what we seek.  We struggle to make order out of daily chaos.  We yearn for the illusive: understanding and respect from clients, the successful management of deadlines, the creation of effective work, the achievement of personal satisfaction, the comfort that comes from knowing that we and our organisations are valuable partners — that we fit in and, for better or worse, that we successfully occupy a little corner of the world.

Isn’t that what our daily efforts are all about?

We accept the imperfect hierarchies in which we work.  There are those above us, some of whom are inspiring, and others below us, some of whom get the job done.  We hope to move up, through recognition and luck, and if we’re human, we hope our enemies and the dopes that drag us down will fail.

Stability is what we seek, and change, when it is thrust upon us, is the enemy of stability, much to be feared and resisted.  Change looks a lot like chaos.  With change, our corner of the world may be wiped out.  Our skills and experience?  Devalued or forgotten.  Our network of relationships?  Altered in uncertain ways.  Our sense of confidence about the future?  Shaken.  Our economic prospects?  At risk.

Ever since “shareholder value” became the dominant corporate mantra and C-Suite salaries went through the roof, change has been ever-present.  In manufacturing, domestic supplier relationships were ditched, as lower-cost global suppliers were identified and secured.  This gutted domestic manufacturing employment in permanent ways and destabilised the lives of skilled and unskilled workers.

Downsizings are routine, and corporate loyalty seen as a quaint concept of the past.  Companies in lower-growth industries boost earnings and margins to maintain the inflated expectations of Wall Street and the extraordinary C-Suite salaries that they support.

Marque advertising agencies have been particularly hard-hit by downsizings, caught as they are between fee-cutting clients and performance-demanding holding companies. Fewer agency people are now left to deal with growing Scopes of Work. This has been a feature of agency life for more than two decades. It is neither good nor bad. It just “is,” and the imbalance among fees, workloads and resources has reached crisis proportions.

There are changes that cannot be avoided.  Globalisation of brands, the rise of procurement, the innovation of digital and social media, the demographic take-over by Millennials, the rise of e-commerce (Amazon in particular) and the success of Google and Facebook scream at the advertising industry: Change or die!  What you’re currently doing is not working!
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How many billable hours are there in a year?

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 next post 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.

If you are still working with agency retainers then the issue of billable hours per person will definitely be an issue. Too high and too low both have impacts on the retainer calculations and the result. But what is the right number of billable hours per year? Well it depends and in my time working with advertisers around the world it has varied from a ridiculously low 1,200 per year up to a mind-blowing 2,080 hours per year. But why is this so important?

The number of billable hours is used by the agency to calculate the hourly rate or the day rate to recover the cost of the agency resource including the overhead cost and the profit margin. The methodology for calculating this is fully explained here. If the number of billable hours allowed per year is high, like the 2,080, then the rate per hour will be lower. If the number of billable hours per year is low, like the 1,200, then the rate per hour will be higher.

It is for this reason that some procurement people and consultants will encourage the annual billable hours to be high so that the hourly rate is low. And many agencies will want the annual billable hours to be low so that the rate per hour is high.

So what decides the number of billable hours per year?

The consideration is what is the accepted working week? This will vary from market to market, often set by government or the labour authorities or simply cultural practice. The working week is made up by the number of hours per day and the number of working days per week.

Based on the eight-hour day and the five day working week the weekly working hours is forty. But in some markets the working week is six days or five and a half days. Others work a seven-hour day and so over five days you have a 35-hour week. Of course people can work overtime, but this is only a consideration if the agency actually pays overtime. Unpaid overtime has no impact on calculating billable hours per year.

Continue reading “How many billable hours are there in a year?”

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