Category Archives: Marketing

Best Practices for Agency Evaluations for Strong Client-Agency Relationships

A good agency evaluation process helps marketers improve their return on
marketing investment through better relationship management, which translates into more high-quality work at a faster output and with improved quality results.
Richard Benyon, DecideWare
Surging Ahead, ANA Magazine, June 2016

But what is a good evaluation process?

Let’s start with what marketers do now. When evaluating an agency or a potential agency, marketers collect data and then apply that information to attempt to make better decisions in agency selection using a four-step process.

Identify whether or not the agency has top talent.
Optimize to ensure the talent is working in the most efficient and effective manner.
Then, depending on the situation, fix problems or reward success.
Work to improve their processes to enable the agency to do their best work.

This is a great process, but, as Richard says, before creating a new relationship or extending an existing one, it’s extremely important to have a clear purpose as to why an agency is being evaluated and what the evaluation should achieve. As Richard says, before beginning an evaluation, marketers need to understand:

how they will wunderstand agency strengths and areas for improvement,
how they will enable the agency to do its best work, and
how the evaluation program will be used as a component of incentive compensation.

A good relationship, like a good Procurement Value Engine, is effective (and uses agency strengths), efficient (and enables the agency to do its best work), and sustainable (and incentivizes the agency to continue to do its best work as time goes on).

In addition, it supports the strategic goals of the marketing department — which should be known before the evaluation process begins to make sure the organization knows which strengths and processes will best support the evaluation.

This means that it’s critical to ask the right questions in an evaluation — questions that will deliver actionable information relevant to the assessment at hand. Designing these questionaries is not easy. Not only do the needs of all departments interacting with the agency need to be met, but the questions needs to be focussed with respect to the strategic goals.

So how do you balance the needs with respect to the goals without overloading the agency with meaningless questions and useless work?

As Richard puts it, you need to be

lean,
impactful,
relevant,
consistent, and
reflective.

And, of course, get the timing right. What does this mean? And how do you do that? That’s the focus of Richard’s latest article by Richard Benyon on Surging Ahead. Check it out.

Marketing Needs Procurement Now More than Ever!

On June 7, 2016, K2 Intelligence released An Independent Study of Media Transparency in the U.S. Advertising Industry on behalf of The Association of National Advertisers (ANA), and it is scary.

If you think that the antics of the Mad Men and the mis-leading management consultants in the House of Lies are bad, if only it was as bad as seen on TV. And by that the doctor means that if that was as bad as it gets, it wouldn’t be so bad. The truth is, as bad as you can imagine the situation is when it comes to agencies handling, or more accurately, mishandling your money, it is much, much worse.

Just like financial analysts, financial consultants, wealth management advisors, and other non-financiers don’t have to advise you on what’s best for them (and, in fact, usually advise you on what will add the most cash to their compensation, see this great expose by the one and only John Oliver), your agency has no legal authority to advise you on what’s best for you or spend your money in the best way possible. The most they have to do is deliver the artifacts in the contract and do so in a manner that can be reasonably justified as meeting the requirements (or at least in a manner that a lawyer can argue meets the requirements).

They don’t have to tell you that they get rebates for volume business to their suppliers that they don’t pass on, financial incentives in the form of free media or cash, and that they sometimes take on transactions as principal transactions, outsource all the work, and sell it back to you at markup. The talent they offered up might not even touch your work! Many agency principles hold equity stakes in the media suppliers they use and so profit twice off of your work. Some respondents to the survey also noted that their obligations to their respective Agency Holding Companies were in conflict with the interests of their clients (and had no problem with this). They had no duties beyond the contract. WOW!

This is a rather intensive report at 60 pages, but the summary speaks for itself. Procurement needs to take heed of what happens when agency relationships are not vetted, very well defined, carefully managed, and fully transparent — especially with respect to the cashflow.

And it needs to make sure the organization has Agency Management solution, and that both Procurement and Marketing make use of it.

To understand why, read the free report that is An Independent Study of Media Transparency in the U.S. Advertising Industry.

Decideware: Taking Marketing Magic to a Whole New Level!

When we last briefed you on Decideware, they were Taking Agency Expense Management to the Next Level! Their Production module had just entered beta, and they had the facility to track not only quotes but actual costs down to the lowest level of detail and associate it with tasks, budgets, providers, and even individual resources.

In the production module, clients define jobs in detail, associate team members, define workflow, assign to vendors, breakdown costs, and go. The definition of job can be quite detailed — name, scope, lead, budget and budget period, type, geography, org unit, and so on. It can be as detailed as necessary, supporting everything from the creation of a simple banner advertisement to a full-scale shoot of an extended informercial, with costs ranging from 10 thousand to 10 million.

Costs can be broken up by phase, and then broken down by expense type, and even resource. The module can track estimated, actual, and will then compute the variance automatically by line item, task type, and phase. This may simply sound like an enhanced version of their scope of work, but the breakdown is much more detailed and their ability to capture data much more refined. This is important, because it supports their new dashboard module.

Their dashboard module, which needs a better name, is not a dashboard at all, but the release beta of their new deep BI capability. Decideware have recently integrated Tableau and can finally bring Marketing the deep insight into spend, and performance, that Marketing has until this point lacked.

Using Tableau, they have developed custom level 1 and level 2 dashboards for over a dozen big clients and are providing marketing spend insights that are going light years beyond what Marketing has ever seen, with the deep drill down you’d expect from a standard spend analysis tools.

At level 1, clients can see how much they are spending by agency, project type, phase, task, or resource, drill down on any available dimension, and, once and for all, see average costs for resources, tasks, projects and other deliverables. They can see when the average cost per hour for banner ad creation and management is $75 and one firm is charging them $125.

This is great, but the real value comes when you start importing performance data and contrasting it against cost. Nowhere is it more true than in marketing that “it’s not what you spend, it’s the impact you make”. It’s not how much more or less than the average you pay for social media campaign marketing, it’s how many impressions you make and clicks you get. If the average impressions on a campaign that cost $5000 is 500, and the average click throughs 15, then paying a company $10000 for a campaign that gives you 2000 impressions and 100 click throughs is a great deal, as you are paying 100 per lead vs. 333. And while most good marketers will get this data from a focussed campaign, how many can integrate it with the cost of campaign (banner ad) creation, how many can contrast it against similar campaigns, and how many can do that against normalized costs around the globe? None. But now they can.

With their latest development, DecideWare have not only taken (Marketing) Agency Management to a whole new level, they have also taken the insight into the ROI into a whole new level. Which creative genius is worth the $500 / hour (as his contribution can now be compared to end results across all his projects and his cost per effect normalized and compared against the other creative geniuses at the other agencies)? And which one isn’t even as productive as a $50 grunt doing stock art. With the new Decideware platform, not only can Marketing win the Agency Management Battle, but the cost management war.

Ditch the Pepsi Blues, Already: Become a Marketing Procurement Asset Part II

Today’s guest post is by Brian Seipel, a marking project expert at Source One focussed on helping corporations achieve both marketing and procurement objectives in their strategic sourcing projects.

In our last post we noted that when Pepsi did away with their marketing procurement department, it was a big deal, but it wasn’t really a shock. Marketing teams have never had a great relationship with procurement. Procurement is still trying to get their foot in the door when it comes to marketing spend, so it isn’t too much of a surprise if that door occasionally gets shut in procurement’s face.

But, despite this example, Procurement should not have anything to worry about. Organizations don’t get rid of marketing procurement — they get rid of bad marketing procurement. And if Procurement can demonstrate value, Marketing will listen. How does Procurement do that? As per yesterday’s post, it starts by becoming an asset, not a roadblock. The next step is to …

REALIGN PRIORITIES

Work with marketing to establish which group should lead discussions on different aspects of agency selection. It may be a hard pill to swallow, but quantifiable apples-to-apples comparisons are difficult, if not impossible, for some marketing initiatives. Concede the value-oriented comparisons to marketing, but take charge where a number crunching comparison is warranted.
Procurement pros also need to do a better job at understanding marketing goals as well as how objectives are phrased using a marketer’s language:

Markets select agencies as partners, not vendors. There’s more at play than who can do a job at the lowest cost.
Tune into ROI. A marketer wins not by reducing the dollars they spend, but by improving outcomes of what those dollars buy.
Promote actions that achieve your long-term goals. Instead of focusing on cost avoidance, work with marketing teams and agencies to establish process improvements that lead to greater efficiency.

A failure to speak the same language or understand priorities is a big reason that procurement is alienated from marketing initiatives; getting on the same page in these ways helps.

These goals don’t always align with the costs savings mandate procurement pros are tasked with, which necessitates a discussion with the top brass to iron out inconsistencies. The point we need to make is simple; I would rather take part in guiding procurement on Marketing’s terms than have no say at all. All of our value counts for nothing if procurement gets overlooked and shut out because we don’t offer compromises.

PUT “MARKETING” IN MARKETING PROCUREMENT

Spend time with a marketer, and you’ll see what they want out of an agency. All of those key qualities need to apply to procurement, as well.

They want to have a relationship with their agencies, not just a series of transactions. They want to work with an agency that not only carries a brand’s identity, but can support their vision for how growing it. They want an agency that can turn on a dime to support new, hot, unconventional campaigns — and has the knowledge to assist in the decision making process for any uncharted waters.

They want an agency that “gets it”. If we want that seat at the table, procurement needs to “get it”, too.

Thanks, Brian.

Ditch the Pepsi Blues, Already: Become a Marketing Procurement Asset Part I

Today’s guest post is by Brian Seipel, a marking project expert at Source One focussed on helping corporations achieve both marketing and procurement objectives in their strategic sourcing projects.

When discussing marketing procurement, conversations still sometimes slide back to Pepsi’s big move at the end of last year, when they did away with their marketing procurement department. This was a big deal, but was it really a shock?

Pepsi’s news was huge, but hardly isolated; marketing teams have never had a great relationship with procurement. Procurement is still trying to get their foot in the door when it comes to marketing spend, so it isn’t too much of a surprise if that door occasionally gets shut in procurement’s face.

Let’s focus on the positive, instead. As long as dollars are still being spent on marketing initiatives, then there’s a spot at the table for you … if you are able to earn it.

BAD MARKETING PROCUREMENT

Let’s just be clear: Organizations don’t get rid of marketing procurement — they get rid of bad marketing procurement.

Pepsi is still devoting a good-sized budget to marketing and advertising, they just did away with a bad marketing procurement middle man. To be more specific:

If an agency search doesn’t move at a speed that keeps pace with marketing initiatives, that’s bad marketing procurement.
If you’re seen as a road block, that’s bad marketing procurement.
If short-term cost savings trump any other longer term considerations (“but it works when I buy office supplies!”), that’s bad marketing procurement.
If you don’t understand marketing, that’s very obviously bad marketing procurement.

If none of these concerns apply to you, then don’t worry. If they do apply, still don’t worry. Focus your energies, instead, on adding more value.

How do you do this?

START BY BECOMING AN ASSET, NOT A ROAD BLOCK

Procurement pros need to do a better job selling one of our greatest values: We allow marketing teams to focus on what they do best — marketing — by clearing the other stuff out of their way. We can make the process faster, not slow it down.

If you haven’t built this business case for yourself as an asset, then marketing teams have no idea what you can offer. They can, and will, view you as a stereotypical bean counter because you haven’t given them anything else to work with.

When I hear marketing complain that procurement slows the process down, I bang my head against a wall. Procurement has honed processes that help speed the process for identifying, vetting, and selecting agencies. Show marketers all of the procurement-based work you can take off their hands (they don’t go away even if procurement leaves the room) so they can focus on finding agencies that are the best fit.

But this is just the beginning. In tomorrow’s post, we will discuss the next steps.