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

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’. Continue reading

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Let’s Hear It for Madison Avenue’s 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. Continue reading

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The dangers of pitching your agency on a regular basis

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

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

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

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How TrinityP3 is helping optimise marketing performance through technology – 3 case studies

Technology platforms, both martech and adtech, provide marketers with the opportunity to be more effective and efficient in their marketing. But technology is said to be moving at click speed and the investment is significant. It is important when investing in marketing technology solutions that the marketer has defined objectives and has a clear view of what success looks like. But, more than this, it is important to take into consideration the current processes that the technology is intended to support and the cultural appetite for change.

We have been involved in helping companies select new technology platforms and tender for new vendors, but we have also worked with organisations that have legacy systems and platforms that are under-performing or not performing at all, and have provided a diagnosis and options for consideration. Also, we have reviewed our clients’ current technology stack to identify optimisation opportunities and assess the organisation’s technology transformation. Each time we bring a totally independent and expert perspective to the process. Here are three case studies of the work we have undertaken providing solutions to marketers’ technology challenges. Continue reading

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Managing Marketing: The importance and the difference in marketing to women

Kylie Rogers, Managing Director of Mamamia Women’s Network, and Lauren Joyce, Head of Broad, their strategic consultancy, talk with Darren on how women are driving commerce today, and why marketers may be missing out on this dominant audience by not marketing specifically to them in the way they want to be engaged.
Transcription:

Darren:

Welcome to Managing Marketing and today I’m here at the Mamma Mia Women’s Network with Kylie Rogers, Managing Director and Lauren Joyce, who’s Head of Broad, which is the strategic consultancy here at Mamamia. Welcome.

Kylie:

Thank you so much for having us, Darren.

Darren:

In actual fact, I should be saying thank you for having me because coming here to Mamamia, as soon as the lift doors open and I saw all of the pictures on the wall and all of the people and the energy I could tell that this was a very different place to work.

Kylie:

I appreciate your saying that. Sometimes in the furore of your working week you forget the energy that really does exist in this place; it’s very progressive. It’s almost tangible.

Darren:

It’s palpable when the doors open. I think that’s why I walked in a bit confused; it was like being hit with this energy and noise. There are workplaces where there are people screaming but it was just this energy that is happening here. It was very exciting. Continue reading

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Are you benchmarking or butchering your agency fees?

Benchmarking has quite rightly earned a poor reputation. Recently Michael Farmer, Executive Chairman of TrinityP3, expressed this opinion in an article in Media Village republished here. This poor reputation is primarily because it is used by many in the industry to simply reduce agency fees and not as a way of obtaining a reference point for comparison, which was the original purpose of a benchmark.

I have shared this opinion with him and the industry way back in 2011 when it became obvious that many in the industry (including many competitors) were simply using benchmarking to reduce advertising agencies to the lowest common denominator. This is because many are simply benchmarking one dimension of agency being costs, such as hourly rates or day rates. In this case, they are relying on titles and position descriptions as a measure of quality, or ignoring value completely, then simply butcher the fees paid for those resources to the lowest in the market. It can certainly deliver cost reductions, but usually at the expense of the quality of those resources.

Very early on we acknowledged that the rate or fee per resource was flawed and often criticised those who used cost per FTE resources as a benchmark for being the same type of people who would buy books by weight or choose a movie based on the length expecting it to represent better value. Instead, we set about developing benchmarks that better represented a benchmark of value rather than cost.

It is not benchmarking, but the misuse of benchmarking that is the issue.

Misapplication of agency remuneration benchmarks

I participated in a meeting of a Marketing Leadership Team (MLT) and was presenting the results of the agency benchmarking we had undertaken on a number of their agencies. The various agencies had different roles in the roster of agencies in regards to the type and quality of work they were expected to produce. They also had different specialist knowledge and skills that made the roster complimentary to the capabilities required by the marketing team.

Using low, medium, and high benchmarks, and benchmarks specific to the category in which they operated, we were able to provide significant insights into the current remuneration models and how well they were performing for both the marketers and the agencies. It was not a surprise for the MLT that the lead agency was at premium to the market overall, even though the organisations procurement team had achieved a significant reduction in the agency hourly rate at the contract negotiations three years earlier, the agency was effectively working at the high benchmark because of the additional hours, particularly in creative, they were investing in delivering the scope of work.

While the procurement team had reduced the premium agency to midlevel benchmark fees the agency had managed to recover by inflating the resources required for the scope of work to make up the shortfall that would have resulted in the retainer. The marketers were comfortable with this and were also happy to know that they were getting what they were paying.

On the other hand, a second tier agency who worked on project fees were priced on an hourly rate card similar to the lead creative agency (clearly the benchmark provided at the time) and slightly higher than their market position and expertise, but were managing on a project by project basis to add incremental margin to each project quote as a way to improve profitability. Interestingly it was this second tier agency that was perceived as more cost-effective even though they were effectively more expensive overall for delivering the scope of work.

The reason for the difference in perception turned out to be that being on a project fee and being able to incrementally increase margin the second tier agency were more attentive and more available than the retained creative lead agency.

If the purpose of the original agency negotiations was to reduce cost to the organisation, the procurement team had used a common benchmark across all agencies, but in a very one dimensional manner, being rate or resource cost. In the process they had encouraged or at least allowed the agencies to game the system procurement had created by increasing resource hours in the retainer to make up for the shortfall, or allow a project system were the agency could incrementally increase costs without anyone noticing. In both cases the cookie cutter approach to benchmarking failed. Continue reading

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Do Clients Get The Agencies They Deserve?

You’ve likely heard David Ogilvy’s famous words, ‘clients get the advertising they deserve’ but when it comes to their agencies… do clients get the agencies they deserve? Over the last seven years or so, we’ve done enough marketer problem resolution work and agency searches to be able to answer that question with some conviction. The answer is unequivocally, yes. Invariably, agency relationship challenges can be traced back to their marketing masters and are a reflection of how the agency is being managed. But if you’re reading this with some scepticism and thinking, wait a minute, this is like saying dogs look their owners – consider these behavioural attributes: Continue reading

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The challenges facing Automotive marketers in selecting new agencies – Three case studies

Share59 Tweet72 +1 Share10Shares 141The automotive industry is being disrupted globally. Electric motor vehicles like the Tesla are providing a viable and desirable alternative to the fossil fuels of the past. Diesel technology has been shown not to be as … 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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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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Losing pitches, part 2: a further 7 ‘less obvious’ reasons why agencies lose pitches

I recently wrote an article about some of the less obvious reasons that an agency, after all the hard work involved, can end up losing a pitch.

Well. After thousands of reads, shares and a number of comments (most of them made privately to me, as is the norm with this sensitive topic) it seems that the article generated some interest – whether you agreed with the content or not. Continue reading

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How many agencies is too many when it comes to roster size?

A very common complaint we hear is “How did I end up with so many agencies?” usually closely followed by the question “How many agencies should I have?” And while Nathan Hodges has answered this comprehensively here, it is interesting that marketers often find themselves with way too many agencies on their roster either because they have inherited a roster that is out of control or it has grown organically right under the nose of the marketing team. 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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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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