The 105th thing on your ‘to do’ list may be the most important…

This post is by Adrian Jenkins, Founder and Director of Financial Progression, a firm of Chartered Accountants that specialises in marketing contract compliance.

Marketing agency audit

So imagine the scenario: you’ve got a set marketing budget that seems to be squeezed year-on-year; new opportunities arise that need to be tested; old, well-trodden routes to market need to be sustained; constant evaluations need to be done to ensure you’re nimble and maximising the opportunities; and your parent company has just issued the (annual) email to say that it’s putting a stop on spending any uncommitted budget at the end of the month.

Sound familiar?

Why add more stress to your day?

Then there are the usual pressures of hitting lead targets, forecasting and fighting for budget for the following year. Throw in the long, onerous process of agency pitches every three or so years, why on earth would you want to burden yourself with a self-elected, marketing agency audit on top?

Are you mad?

No. You’re anything but.

A leaking budget

With budgets being stretched as much as they are, can you really afford to let any of it ‘leak away’ needlessly? And it’s not necessarily anything sinister or underhand that’s being done.

More often than not, it’s just an oversight that the reconciliation for a project hasn’t been carried out yet, that something has been charged to you which shouldn’t have because it sits outside the agreement, that the wrong hourly rate or commission rate may have been selected by accident etc etc. Whatever the reason, it’s worth spending a bit of time and a little bit of hard-earned budget to ensure you’re only paying for what’s been agreed and no more.

It’s hard enough reconciling invoices against estimates at the best of times, but do you ever have the time to dig any deeper to check the time sheets, the expenses or even the third-party production, media and even old-fashioned print costs? I suspect not. An estimate is received, a PO is raised, an invoice is paid, the three match and voila, job done.

Catch the drips

Continue reading “The 105th thing on your ‘to do’ list may be the most important…”

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Cost benchmarking and value benchmarking your agency, which one gives the best results?

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.

Advertising agency value benchmarking

In response to the question of “What is a cynic?” Oscar Wilde wrote “A man who knows the price of everything and the value of nothing”. When it comes to agency benchmarking it is hard not to be cynical. Recently Michael Farmer, author of best seller industry book “Madison Avenue Manslaughter” and Executive Chairman of TrinityP3 published an article highlighting the shortcoming of agency benchmarking, specifically agency cost benchmarking: Why cost benchmarking is the waterboarding of the advertising industry.

How do we stop the manslaughter and increase agency productivity and performance? The first step is to stop cost benchmarking and move the focus to performance. Here is why.

What is Agency Benchmarking?

The majority of what passes for agency benchmarking is simply cost benchmarking. The focus on agency salaries and the elements that are used to calculate the effective charge out rate such as overhead, profit multiple and billable hours per annum are simply required to validate the cost charged by the agency per hour or day or as part of a retainer per resource or full time equivalent (FTE).

Continue reading “Cost benchmarking and value benchmarking your agency, which one gives the best results?”

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Why cost benchmarking is the waterboarding of the advertising industry

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.

Advertising industry cost benchmarking

Procurement and benchmarking rose to corporate prominence once “increased shareholder value” became the advertiser’s mantra. Marketing declined in importance, from an investment to achieve brand growth to a cost to be optimised. Benchmarking consultants jumped on the bandwagon. 4As shamefully accepted the ANA benchmarking trend with hardly a whimper, leaving its members to fend for themselves.

Benchmarking is the waterboarding of the industry, enhanced interrogation that weakens its subjects but develops no useful information. Although benchmarking has become commonplace, it has had no positive long-term benefits. Indeed, the opposite is true — advertiser brands are still not growing, CMOs last in their jobs only half as long as CEOs and agencies have been compromised and weakened.

For those who do not understand benchmarking practices, I have prepared a special guide for readers by rewriting an advertisers’ RFP and putting it in plain English. See below.

Plain Language RFP by Big Brand Advertiser for a New Agency

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Managing Marketing: The role of innovation, creativity and technology in driving change

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.

Annalie Killian is the Director of Human Networks at Sparks & Honey and was the Founder and Curator of the AMPlify Festival. Here she talks with Darren on the role of creativity and innovation in driving change through organisations and the importance for organisations to embrace change and technology to stay relevant.

You can listen to the podcast here:

Follow Managing Marketing on Soundcloud or iTunes

Transcription:

Darren:

Welcome back to Managing Marketing. I’m in New York today and I’m meeting with an old friend, Annalie Killian, who’s the Future-maker and Director of human networks at Sparks and Honey. Welcome.

Annalie:

Hi. Thanks, Darren, it’s great to see you.

Darren:

It’s been interesting because we actually met quite a while ago at the foreshore at Nielson Park, didn’t we?

Annalie:

Was it there or was it through James Welsh?

Darren:

Yes, it was actually on the foreshore there on Australia Day, I remember it very well because at the time you were introduced by a very interesting title, he said something about magic.

Annalie:

Yeah, ‘catalyst for magic’.

Darren:

You were the catalyst for magic, which I thought was a terrific title. That’s because of your role of being the founder and executive producer and curator of the Amplify series, wasn’t it?

Annalie:

That’s right, yes. So, that was while I was at AMP in Australia.

Leading an innovative culture through accelerated learning

Darren:

Now one of the things that Amplify seemed to be all about was bringing an interesting network of people together and then sharing new and innovative thoughts, that’s right isn’t it?

Annalie:

There was actually a very purposeful design; the bringing together of the people was a consequence of the design. But essentially what I saw when I was asked to lead innovation culture by the CIO who hired me for this role was that I found that organisational learning was way too slow and really not plugged into the edge where the change was happening.

And so, what I wanted to do was create the mechanism for accelerated learning and the people that I brought in were hand-picked for their edge-dwelling capabilities. Then brought together in an experiential learning environment where also we applied the same kind of principle of emergence; let everybody come and learn and then work out what they do with it themselves.

So, it was very much around presenting people with change that was happening at the edge in a way that was accessible and that they could process and then take back to the office.

Darren:

So it’s exposing people to these new ideas, new concepts, new principles?

Continue reading “Managing Marketing: The role of innovation, creativity and technology in driving change”

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Meeting the Global CEO of TrinityP3 Marketing Management Consultants

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.

A month or two ago I was interviewed by Amana Hart from The Big Smoke in my role as Founder and Global CEO of TrinityP3. In the interview we discuss the rapidly growing digital space, and the importance of marketing being aligned to business strategy and the role of marketing in delivering business growth. The interview is part of The Big Smoke ‘Meet the CEO’ series. 

TBS: Hi, Darren. Can you first of all tell us a bit about your background and how you came to lead TrinityP3?

Darren:  I graduated from university with a degree in Applied Sciences and worked in the field of Medical Research for five years before embarking on a 15-year career in advertising. In 2000 I founded TrinityP3 marketing management consultants. As Global CEO, I lead marketing consultants around the world through all phases of the marketing optimisation process to improve the performance of our clients marketing.


CEO of TrinityP3

TBS: What do you think are the biggest barriers marketers face when trying to understand the digital space?

Darren: I think marketers need to understand that digital is simply another opportunity to be considered in the overall marketing strategy of a business. It is an effective channel that shouldn’t be viewed as being separate, but rather as a part of a system of ways to approach and engage with potential customers.

Digital, in the form of paid, owned or earned media, advertising evolution, or data and technology, is now threaded through everything that a marketer touches, yet legacy-based structures place ‘digital’ into silos. This forms a huge barrier against the development of fully integrated marketing strategies.

In addition, the requirement for multi-disciplinary teams to be involved in areas of the digital marketing space can prove challenging. Implementing a digital technology stack, to take just one example, requires not just CMO endorsement and compliance, but endorsement and compliance of the CIO, CCO, Research and Insights, and often the CFO. The same can be said for other areas such as web-based asset development, social media strategy, CRM and integrated customer journey mapping.

TBS: This year, Facebook has finally agreed to an independent metrics audit and Marc Pritchard called for all publishers to comply with MRC-accredited third party verification. What impact do you think that will have on Australian media agencies?

The digital media/publishing industry is in many ways an adolescent in business terms, but I think the introduction of these independent metrics will see a major shift in transparency and accountability, which will force the market to mature very rapidly.

Agencies and advertisers will need to reconsider their overall strategies for engagement with their audiences and the most effective of these will be the ones who provide a solid mix of media to increase marketing performance. Rather than rating performance on the maximum number of eyeballs reached, or on the cheapest cost of reaching those eyeballs, businesses will realise that as always it’s about targeting the right eyeballs through their strategies that lead to growth.

TBS: As TrinityP3 is a global operation, what is the biggest difference in regards to expectations from brands when measuring the ROI from their campaigns?

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Agency Remuneration: A Loser’s Game

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 remuneration

Chief Marketing Officers and their colleagues in procurement have been driving down agency remuneration for more than a decade. Simultaneously, they have been growing Scopes of Work, experimenting with digital and social marketing.

Is marketing getting something for nothing, or is it playing a loser’s game?

Advertiser-agency relationships have devolved over the past several decades. What was once the strongest of strategic relationships during the golden age of the Creative Revolution has become lopsided and imbalanced.

It’s become a buyer’s market for advertisers, who change agencies with regularity and drive down remuneration with every pitch. Advertisers seek “best in class” agencies who specialise by media, and the definition of “best in class” is a fluid one. It cannot be based on “who delivers the best results,” because agencies do not hang around long enough to deliver improved results.

Their relationships with their clients last no longer than the tenure of the CMOs for whom they work — and CMOs, per research by Russell Reynolds, have the highest turnover among executives in the C-Suite.

Advertisers never made a conscious decision to marginalise agencies. Marginalisation was the outcome of the shift from media commissions to labour-based fees; the rise of brand globalisation; the adoption of “shareholder value” as the corporate mantra; the empowerment of procurement to drive down costs, and the digital and social revolutions, which fragmented agencies into specialised suppliers and led to astounding increases in marketing SOW workloads. Continue reading “Agency Remuneration: A Loser’s Game”

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Managing Marketing: The challenges facing the advertising agency business model

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.

Andrew Reeves is the Founder and CEO of ARC Limited with a lifetime of experience as an agency CFO. Here he chats with Darren on the current agency remuneration and business models and the challenges facing agencies in finding ways to make this work in rewarding agencies for the value they create.

Andrew Reeves on the advertising agency business model.

You can listen to the podcast here:

Follow Managing Marketing on Soundcloud or iTunes

Transcription:

Darren:

Welcome to Managing Marketing and we’re coming from downtown Shoreditch in London and today I’m spending some time with Andrew Reeves who is the founder and CEO of ARC Consulting. Andrew’s a long-time agency CFO and CEO. Welcome, Andrew.

Andrew:

Thank you very much, Darren; it’s a pleasure to be here.

Darren:

It’s interesting being here in what feels like the new hub of London creativity: Shoreditch.

Andrew:

Yeah, it used to be Soho and I think in the last five years it moved spectacularly towards Shoreditch, which is where all the best gigs are from an advertising perspective these days.

Darren:

Well, probably also because of the real estate cost, isn’t it? Soho became quite expensive.

Andrew:

Yeah, it certainly did. I think Shoreditch, at one stage, was one of the cheapest parts in town; £34 per square foot or something but as soon the marketing folk moved in here they’ve done it all up to suit the market and it’s gone literally through the roof. It’s gone from about £34 per square foot to 60 in the last year.

The role of finance in the creative industries

Darren:

Look, the reason I bring that up is because one of the things I want to discuss today is the role of finance in accounting in the creative industries because it’s one of those areas that people have really quite diverse views on.

Andrew:

Absolutely. I’ve been in the industry for about 20 years now and it’s funny because even working for some of the big brands like WPP, which is headed by some of the most astute financial people in the industry, finance and operations always seems to come way down the chain in terms of priorities for owner-managed creative businesses.

Darren:

That’s one of the issues isn’t it, where does the balance get struck between running a sound business and investing in things like creativity? If you listen to some people it’s impossible to manage the creative process. But they’re still businesses, aren’t they?

Andrew:

It’s funny the amount of times that I’ve been into agencies and they talk about it being a creative business but the business element of it is the weaker part. As an industry we pride ourselves on the creativity but we’re not very good at the business side.

And I think that comes from both how we look at our client’s businesses, which is why we’re in business in the first place, and the input that we have and the impact that we have on their top line and bottom line as well as how we run our own businesses. I just don’t think we’re particularly astute at it.

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5 questions to help charities drive a greater return on marketing investment

This post is by Anton Buchner, a senior consultant with TrinityP3. Anton is one of Australia’s leaders in data-driven marketing. Helping navigate through the bells, whistles and hype to identify genuine marketing value when it comes to technology, digital activity, and the resulting data footprint.

Return on marketing investment

In the highly concentrated charity sector*, charities must evolve from making people feel sorry to give money, to being truly people centric in approaching their mission.

So with clutter being the constant, the world’s best charities and not-for-profit organisations are transforming their organisation and marketing strategies around actionable data insights. Aimed at helping them inform the direction and stories that people are interested in when it comes to a relevant mission.  

For example The Cure Brain Cancer Foundation has become the 25th most innovative organisation in Australia and has been named the 2016 Australian Charity of the Year.

It has focused on delivering actionable results, by taking part in a world-first global adaptive clinical trial. The trial puts people onto real treatment options, and tests drugs based on people’s bio-markers and their type of tumour.

This is creating a wealth of data that is being fed into an algorithm that is delivering insights into what works for one person but not for another. Treatments are then adapted for new patients that enter the trial. Hence results are achieved in a much faster time-frame, versus traditional trial methods that can take up to 12 years:

The foundation has refocussed its marketing strategy by humanising the benefit of the trial, ensuring that people affected by brain cancer are the story.

And The Starlight Foundation is also transforming its technology and digital capability with the appointment of an IT advisory board. This is helping improve the way that it connects people. It is also making it more efficient in delivering its wonderful experiences. Insights are being gleaned from the mass of data that they collect with the 360 degree view of their supporters.

The above are just two examples. However, these organisations have identified that a lot more work is required in identifying the true trends and more meaningful metrics that underpin people’s activity in and around a cause. Thus achieving more emotional engagement and a greater return on marketing investment.

Here are our top 5 questions to focus on when transforming to people centricity

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Learn how CEOs & CMOs are restructuring their marketing teams for success – Infographic

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.

Some of the more interesting work we have been undertaking at TrinityP3 in the past five years is designing new marketing structures for our clients. This work arose from the projects where we would restructure their external roster of agencies and suppliers to their strategy, only to have them ask if we could do the same with their internal structure, which they had realised through the process, was often aligned to the business silo structure and not the customer strategy.

This work has been done for a wide range of companies and categories including Financial Services, Automotive, Higher Education, Property & Construction and more.

Late last year I was interviewed by Lara Sinclair from Simple.HQ on the trends in marketing structures we had observed beyond the centralised and decentralised dichotomy typically seen in the past.

This was along with her interviews of other market experts including Mark O’Connor, Managing Director, Perceptor; Kobie Fuller, Investment Partner, Accel Partners; Grant Pattison, Senior Manager, IAG Commercial; Anthony Kennada, VP Marketing, Gainsight; Ryan Bonnici, Marketing Director, Hubspot; Jenny Wilson, Head of Customer Strategy & Insight, Deloitte Australia; Tien Tzuo, CEO, Zuora and more.

The report and insights based on this market review; “The Changing Structure of Marketing in the Age of Disruption” can be downloaded for free here at Simple.HQ

It is also beautifully summarised here in this infographic developed from the report. Continue reading “Learn how CEOs & CMOs are restructuring their marketing teams for success – Infographic”

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It’s more than the agency roster and the scope of work. It’s the relationship, stupid!

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 roster and remuneration

The disappearance of AOR relationships between advertisers and their creative agencies was not a good thing for either party. Both are at fault for letting this happen, and now both parties have suffered the consequences.

Advertisers have to manage complex portfolios of specialised agencies who compete for a portion of the total fee.  Advertisers have to take the responsibility for planning the detailed Scopes of Work and decide which agencies will be briefed for which deliverables.

These briefing decisions are now made project by project, and individual agencies have to be prepared to bid project by project in order to secure their piece of the action.  This competitive bidding pits client agency against client agency — even though the portfolio of agencies is supposed to be working harmoniously on behalf of client brands across the media landscape.

Further complicating this picture is the overwhelming number of deliverables that now make up client Scopes of Work.  Marketing departments experiment aggressively to see what kinds of digital and social deliverables will have a positive effect in the marketplace.

They treat this kind of experimentation as cost-free for their agencies, so they load on the work without matching it with proportional fees. One agency office I worked with saw its 2015 workload increase from 3,600 deliverables to over 11,500 deliverables in 2016. The fees for this work increased by only 25%.

In today’s project-based relationships, individual agencies have less voice and less influence over their clients’ brand strategies — and not very surprisingly, agencies are putting fewer seasoned account management and planning resources on their accounts.  Poor fee economics drive this decision, along with the ongoing need to deliver profits to their holding company owners. Agencies are becoming more junior and transactional rather than experienced and strategic.

In the meantime, their clients’ legacy brands languish in the marketplace, and CMOs are replaced regularly as a result of their failure to deliver improved results.

This relationship pattern has weakened the branded agencies and increased the logic for holding company relationships, where WPP, Omnicom, Publicis Groupe and Interpublic organise their company-wide portfolio of resources in an effort to re-establish exclusive AOR relationships with large clients.

Publicis Groupe, in particular, under CEO Arthur Sadoun, has been aggressive about this transition. “I am committed to breaking the silo,” Sadoun told Campaign last September, noting that this integrated way of working was the future, and that the group had to remove any barriers such as financial silos. “It’s the only way to bring the best of our services to our clients,” he said.

Continue reading “It’s more than the agency roster and the scope of work. It’s the relationship, stupid!”

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