Category Archives: Marketing

MBAs, Sourcing Innovation Feels Your Pain!

MBAs, let’s address the elephant in the room77. You’re drinking from a firehose65 right now while burning the candle on both ends60. It’s a perfect storm31. Profits are down, your visibility into the quarter is a little fuzzy37, and you don’t want to get thrown under the bus71. The organization is going through a re-org84 in an attempt to right-size16 and correct the perception, right or wrong, that there were too many Chiefs and not enough Indians56.

By way of housekeeping22, you know you need to increase mind-share with the customer85, but you don’t have enough boots on the ground20 to scale your marketing efforts. You need to treat the big deals as one-offs40, but you are facing some headwinds39 with the COO who wants to standardize. You need to put your game face on69 and manage expectations52, but you don’t know what to do and you don’t want the R33. But if we take the 30,000 foot view50, unless you want to be re-org’d out, you better take the R33.

Hope is not a strategy46, but you think that’s all you have. You don’t know the next steps73 or the competition killer76 that will allow your organization to move up and to the right83 and regain its profitability and its fame. You don’t have a go-to-market64 strategy, any paradigm shift1 would be outside your core competency38, and you don’t know what your next deliverable81 is.

But it doesn’t have to be that way. If you eliminate the ready, fire, aim45 approach, put a stake in the ground35, remember the old 80-20 rule51, put aside the basic blocking and tackling68, and do a level-set67, you’ll realize there is a radical solution. Procurement.

And while it’s good to put a face to the name49, it’s even better when you realize that it is the next-generation, turn-key, plug-and-play17 solution that will finally deliver the ROI5 you’ve been searching for. Sure you will get some push-back66 when you suggest it for the first time, but Procurement has it covered from soup to nuts70. Of course you should do a little more due diligence there43, but Procurement really is the cash cow25 you’ve been searching for.

And while you can expect that Marketing will sound like a broken record55 when you bring this up and continue to push their agenda, you need to circle back to that9 later, push your agenda, and loop them in82 when they are ready to cooperate. Once you’ve done your research and identified leading organizational best practices80, you’ll know that Procurement is the way to stop leaving money on the table44 and close the loop72 on organizational success.

There’s a reason that strong Procurement support has gone viral59 in leading organizations and that’s because Procurement’s constant quest for value-add63 increases profits. And while previous business fads have failed, this time its different79 because Procurement has to eat its own dog food28 and is very incentivized41 to buy premium.

MBAs, be sure to come back tomorrow as we explain, in your language, why you have to support procurement.

What is ARM, and why should I care?

Today’s guest post is from Peter Portanova, a Senior Project Analyst for Source One Management Services that specializes in the marketing spend category decision support for clients seeking to enhance their strategic marketing efforts and drive valuable agency relationships.

Relationships. Is there any institution more complex known to humanity? Whether between a group of people, or between a group of businesses, relationships are complex, messy, and often times, toxic. As businesses struggle to remain relevant in a volatile and fast-moving environment, the push to do more with less has never been so evident. In a well-circulated and often-rebuffed article from 2015 titled “Your Agency Hates You and You Don’t Even Know It“, the author attempts to identify the reasons relationships seem to fail (that is, if you are an agency and you are comfortable placing the majority of the blame on your client).

Consider the state of the marketing and advertising industry in 2015. Buzzwords like “Reviewmaggedon” and “Mediapalooza” dominated headlines, and the year ended with marketers parading through the streets when Pepsi decentralized their marketing procurement team. Fortunately, Pepsi’s decision does not indicate a trend, and an ANA survey to marketers reaffirms the value of procurement in the marketing process. To summarize the findings, many executives see value in procurements process, as long as it does not hinder the fluidity marketers require. However, the overarching question remains: How does procurement adapt their process to become more accepted by marketing stakeholders?

Enter, Agency Relationship Management, or ARM for short. Like Supplier Relationship Management (“SRM”) ARM works on the client’s behalf to ensure a fair and equitable relationship. There are many processes and services that fall under the umbrella of ARM, and procurement is well tooled to operate simply as a mediator, or as the manager of a full sourcing event. The ultimate goal of an ARM program is to enhance the relationship between a client and agency, and to ensure that expectations are clearly communicated and campaigns are integrated and executed seamlessly. Whether working with an internal team or an external third party, ARM programs ensure a best-in-class contract, and enable the client and agency to react swiftly when the market shifts.

“My relationship is great!” “My agency does everything for me!” “My agency does nothing!” “My agency is terrible!” Relationships between clients and agencies exist on a spectrum from love to hate, and require regular maintenance to remain viable. Consider a married couple in their “honeymoon phase,” believing all is well and that the relationship will last forever, or consider the alternate feelings of disappointment and anger. ARM exists as the marriage counselor during rough patches, OR as the open lines of communication and responsiveness when everyone is happy. Simply believing your relationship is successful now, and therefore does not require proactive measures can be detrimental over time, and may lead to the ultimate dissolution of the union (which is expensive, time consuming, and disruptive).

Aside from mediating and working as the communicator, ARM is hugely useful is evaluating current relationships, identifying future opportunities, ensuring competitive rates, and developing a scope of work that is fair and equitable. While relationship management might connote issues, the beauty of ARM is that is works to ensure issues seldom arise due preventative and proactive measures undertaken to ensure the constant delivery of value. Whether there is concern over scope, rates, or capabilities, the objectivity of a third-party outside of marketing works to alleviate to concerns. Furthermore, as noted by the ANA, having a separate business unit working on negotiations is hugely beneficial, and allows those engaging in tactical work to remain focused.

Always remember that relationships are mendable. Unless seriously damaged with fundamental issues, replacing an agency partnership should be a last resort. While there are certainly benefits in doing so, alternative solutions should be the first consideration. A full search is time and labor intensive, and hugely disruptive to current operations. Typically, issues can be resolved through the rotation of resources, or the assignment of new teams to provide additional benefits. Similar drawbacks exist for agencies, which are forced to dedicate additional resources, which may distract from the execution of tactical work. By having an ARM team and process in place, the process is far more manageable, and can begin with simply evaluating the relationship and identifying both positive and negative aspects. After such an evaluation, a process for resolution can be created, ranging in both complexity and extensiveness.

An internal department is a viable solution is for managing relationships, but additional benefit is available through the utilization of a third party. Market data concerning rates and contract terms allow for a greater advantage in negotiations, and flexibility in resources ensures clear communication leading to a rapid resolution. Whether establishing an internal department, or looking for a wholly-outsourced solution Source One’s expertise and experience are ready to assist you in the implementation of your ARM program.

Thanks, Peter.

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.

  1. Identify whether or not the agency has top talent.
  2. Optimize to ensure the talent is working in the most efficient and effective manner.
  3. Then, depending on the situation, fix problems or reward success.
  4. 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.