Why performance based payments need to be an incentive not a disincentive

How do you create high-performance teams? Well if you look at what often passes as performance based compensation, you would think it is about taking money away from the agency before then setting an unreasonable and unrealistic performance metric, and then asking the agency to work at getting their money back. Talk about all stick and no carrot. Is it any wonder that so many marketers report that their agency performance remuneration efforts failed? Let’s be honest for a minute and admit that most of these performance models were really about reducing the agency fee and had very little to do with truly wanting to encourage performance. The technique would be applied usually as a way to get the agency to reduce their overall fee by 10% to 15% by placing it ‘at risk’ for an opportunity of earning back perhaps a maximum of 20%.  Continue reading

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How long payment terms impact client / agency relationships

Let me be completely up-front here, this is not just an issue for advertising agencies, it is also an issue for consulting companies like mine. There are many major companies who will put you through a detailed and protracted procurement process, negotiate your tendered price down and then inform you that they have payment terms of 90 days or more.

Others are less obnoxious in that they state their payment terms up front, which, depending on the type and size of the project being tendered, allows us the opportunity to politely withdraw from the process because there are plenty of other more reasonable companies willing to pay for our services on 30 days and sometimes less so that we do not need to waste our time on companies who basically expect their smaller vendors and suppliers to act as their source of free cash. Continue reading

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The Ad Industry at War with Itself

This month marks the one-year anniversary of the publication of ANA’s “media transparency” recommendations, which followed a major investigation of media agency practices. Lest we forget how central media transparency is to ANA, Bob Liodice (President and CEO of ANA) and Doug Wood (outside legal counsel) published a MediaVillage article in mid-July reminding us that “if the allegations against the [media] agencies are true, the behaviour is reminiscent of past high-profile financial scandals.” Continue reading

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The danger of confusing best practice with common practice

Many of the challenges marketers are facing are new. Digital technology has had major impact in disrupting all aspects of business and particularly marketing because it has disrupted consumer behaviour too. Therefore, while we agree that the foundations of marketing and marketing strategy are still essential, there are new challenges arising in the implementation because of the increased complexity and constant change. In the face of these new challenges and complexity, many of the old tried and true solutions no longer work. Yet it is human nature to stick with what you know or what has been tried and tested, rather than trying something new. Continue reading

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Who’s Guilty and Who’s Innocent in the Industry’s Transparency Wars?

Bill Duggan recently penned a piece in MediaVillage.com continuing the ANA’s attack on ad agencies – this time over production transparency, which is the code name for unethical and possibly illegal bid-rigging activities conducted by some agencies to secure production contracts at favourable rates. A previous transparency issue, media transparency, was investigated by ANA in 2016, and it confirmed instances of media agencies enriching themselves at client expense through rebates, kickbacks and other “non-transparent” practices, many of them not forbidden by existing contracts. Continue reading

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ANA and 4As Duke It Out in a Complete Mismatch

ANA, ever-faithful and aggressive on behalf of its advertiser members, struck a second blow to 4As recently — a right uppercut to the chin — with a new ANA study of advertising production practices. The report detailed “a range of improper behaviour, including allegations that some agencies have steered production contracts to their in-house production and post-production outfits by urging other companies to inflate their prices during the bidding process,” as reported in WSJ. Continue reading

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Managing Marketing: The importance of an insightful and robust agency search & selection process

Kylie Ridler-Dutton is a Senior Consultant at TrinityP3 and a specialist in agency search and selection. Here she chats with Darren regarding the agency search and selection process and the considerations required when planning and managing a successful pitch process for a wide range of agency types including creative, media, digital, social, PR, technology suppliers and more. Continue reading

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Ad Agencies: Prisoners of a Creative Past

Who needed “hands-on management” when revenues were high and automatic, workloads modest, TV dominant, creativity celebrated, brands growing, agencies respected, employees well-paid, parties outrageous and clients long-lasting? Creativity was the foundation of agency success, and to nourish creativity, management got out of the way, lest its intervention destroy the magic. “A creative agency needs to operate like an ant colony,” declared Kevin Roberts, former CEO of Saatchi & Saatchi, “where every ant knows its job and has the freedom to do it. As long as we hire and inspire the right people, to do the right thing … our agency should grow and our creativity should flourish.” Continue reading

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Managing Marketing: Reviewing the ANA Advertising Financial Management Conference in San Diego

Lyndon Brill, Senior Consultant at TrinityP3 and Darren discuss the sessions and topics that captured their attention at the annual Advertising Financial Management Conference, this year in San Diego, USA. Covering everything from Block Chain, to Transparency. Bot Fraud to Compensation and more. Continue reading

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Do you remunerate or compensate your agency?

This is the second in a series of one minute videos that address 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. Continue reading

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Ad Agencies are Just Like Cruise Ships

We don’t see many Big Ideas any more. Content may be king, but content is forgettable, millions of tiny ideas in a million different places. Can anything new be said about a product? Or an industry, like the advertising industry? Well, I’m not a creative — more like a dreaded management consultant. Nevertheless, here’s a cross-industry Big Idea, free for the asking: Ad agencies are just like cruise ships! Don’t dismiss this out of hand. Read on! Continue reading

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When is the right time to apply the Golden Rule in marketing?

This is the first 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. Continue reading

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Agencies Struggle with Declining Prices

Since 1992, the average price for creative agency deliverables has declined by 70% in today’s dollars, according to my research [1] for Madison Avenue Manslaughter.
Nevertheless, agencies have managed to deliver growing profit margins for their owners throughout this 25-year period. How was this possible? Are agencies still “fat,” as many procurement executives believe, or have they starved themselves to generate profits in the face of declining prices? Continue reading

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Is there nothing fair or reasonable about agency remuneration?

During more than 15 years of agency benchmarking and negotiations two words I have heard often repeated in these discussions is fair and reasonable. Marketers, procurement and agencies all agree that the remuneration model should be fair and reasonable. It is no wonder these words are so popular, after all they sound fair and reasonable. This is why so many guidelines on agency remuneration, including ISBA in 2006, ACASA in 2009, ISBA and IPA in 2012 and the recommendations of competitors and even ourselves, have all stated and restated that agency remuneration should strive to be fair to both advertisers and their agencies. Continue reading

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What are the biggest challenges facing marketing today?

Back in February this year we had our twice yearly get together in Sydney will all the TrinityP3 consultants from around the world, including Michael Farmer, our new Executive Chairman and the author of the best selling book “Madison Avenue Manslaughter”. Every six months we get the gang together to review and discuss the business and plan the future. Last February this conversation led to the changes you see on the TrinityP3.com site today. It was started with a conversation with Michael around the trends and challenges facing CMOs and their organisations, which could be summed up in one word – GROWTH – or more specifically the lack of it. Continue reading

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