By Bill Duggan, Group EVP, ANA
Posted: Sep 23, 2013 9:25am ET
Last week I had the opportunity to attend the Procurement Leaders conference in Boston and present a session, titled “Elevating the Role of Marketing Procurement” with Sal Vitale. Sal is category leader, media procurement at Johnson & Johnson and the co-chair of the ANA Procurement Task Force. The three key takeaways from our session are highlighted below.
Takeaway #1: Marketing is an investment to be maximized and not an expense to be minimized.
- Consider your personal investment portfolio. When selecting a financial planner, your primary concern is whether he or she can maximize the value of your investments. With your financial security at stake, finding the lowest cost financial planner may not be the best approach.
Takeaway #2: Marketing procurement must evolve from a tactical role (cost reduction) to a more strategic one.
- The most mature marketing procurement organizations have progressed on their respective journeys to embrace more strategic metrics (like driving marketing ROI). Less mature marketing procurement organizations are encouraged to learn from the experiences and best practices of their more mature peers to expedite their progress.
Takeaway #3: Procurement needs to more closely align their measures of success with marketing colleagues.
- It is incumbent on procurement to initiate those conversations and build relationships that establish trust and credibility. There should be a focus on an integrated methodology for evaluating success.
The white paper, “Elevating the Role of Marketing Procurement,” upon which this presentation was based, can be found here: www.ana.net/elevatingprocurement.
ANA “Procurement Day” is October 22 in Chicago hosted by BP, This is a complimentary event for ANA members and other interested client-side marketers and details are here: www.ana.net/membersconference/show/id/MOC-OCT13C.
By Ken Beaulieu, senior director of marketing and communications, ANA
Posted: Sep 23, 2013 8:00am ET
For more than 200 years, Valspar was a private label manufacturer of high-quality paint and coatings for Lowe’s and other independent retailers. But in 2007, Valspar made the bold decision to create a consumer-facing brand of paint to help its retail partners drive more growth and the company “better control its own destiny.” It not only called for product and marketing innovations, but also for a creative brand strategy that would distinguish Valspar in the do-it-yourself (DIY) segment.
Much like a fresh coat of paint, the plan has breathed new life into the global company. Valspar is now the number two brand of DIY paint in the U.S. — and the company has its sights set on becoming number one.
John Anton served as Valspar’s vice president of marketing for much of the transformation before being named vice president and general manager of the Ace business unit earlier this year. In a recent interview with me, he explained the insights that were of paramount importance to driving meaningful growth.
“As a coatings company with a heavy focus on the DIY segment, we would like for people to paint more frequently,” he said. “Consumer research tells us there are two key reasons why people don’t do this more often: first, it’s a lot of work to paint a room, and second, people lack color confidence. Over the past few years, our competitors have focused on trying to solve the first problem by launching products like paint and primer in one, intended to make the painting project less cumbersome. While we have also launched paint-and-primer offerings, we knew that the bigger opportunity was to solve the second pain point — how to instill more color confidence in the minds of DIYers. That is what led us to launch the Valspar Love Your Color Guarantee in 2012. Valspar is the only brand in the industry to guarantee consumers that they will love their paint color, even after it has been put up on the wall. If a consumer isn’t absolutely thrilled with the initial color of Valspar paint, they simply purchase another Valspar color and we reimburse them for the cost of their first color. This is now a core part of the Valspar brand promise, as it serves as a tangible proof point of our unique ability to give consumers color confidence.
“Instilling color confidence throughout the paint journey is also why digital is such an important tool for us,” Anton continued. “Consumers are seeking color inspiration from a variety of sources, including magazines, websites, Pinterest, Facebook, blogs, etc. As a brand, we have a presence in all these channels/outlets, but we also go further. We are the only brand to offer a free color consultation, through our new Valspar Color Connect App. We utilize Facetime technology to allow consumers, from the comfort of their own homes, to have a virtual color consultation with one of our trained color designers. Using the dual-camera technology of smart phones, consumers can show our Valspar color consultants the room they want to paint, allowing our designers to see their furniture and style aesthetic. Our consultants then drag and drop color chips of recommended colors, which get super-imposed over the existing wall to give consumers a virtual feel of what the new room will look like. This virtual consultation ends with our consultant sending an email to the consumer with all the information about the colors they discussed, along with closest retailer location, thereby providing consumers the color confidence they are missing today.”
Anton will share Valspar’s remarkable story at the 2013 ANA Masters of Marketing Annual Conference, October 3-6 in Phoenix, Ariz. If you’re not attending the event in person, be sure to catch the live stream on your computer, tablet, or smartphone.
By Marni Gordon, vice president of committees and conferences, ANA
Posted: Sep 20, 2013 12:00am ET
I attended the “360i Marketing Summit 2013” this week in NYC. 360i brought their clients and partners together to learn from each other on topics related to the key theme of the event: “Navigating Disruption: From Big Data to Big Ideas”. My favorite session was a panel moderated by Sarah Hofstetter, President of 360i on “Marketing in a Real-Time World”. Marketers from Ben & Jerry’s, Mondelez International (Oreo), and USA Network participated on the panel and shared great insights on how to balance brand authenticity with cultural relevance in a real-time world. Some of the key lessons learned to success in real-time marketing were:
- Consumers can affect your reputations in a heartbeat: Brands need to regain control by knowing your surroundings (listening) and bring original.
- Be precise on what your brand stands for: It is important to be true to your brand’s core values and beliefs.
- Trust internal client teams and your partners. All involved need to have one brand voice and have the freedom to take risks.
- Content is king and can take many forms: No matter what the medium, brands are storytellers and need to make sure they are sharing the right stories.
ANA’s first-ever Real-Time Marketing Conference presented by Starcom is December 4th in NYC! Learn from Kraft Foods Group, The Coca-Cola Company, Hasbro, Anheuser-Busch, MINI, MasterCard Worldwide, Nestle and more!!! I look forward to seeing you there!
By Bill Duggan, Group EVP, ANA
Posted: Sep 19, 2013 10:55am ET
Marketing procurement should be aware (keenly aware) of the value and benefits of in-house agencies. In-house agencies offer key benefits, per the recent ANA report “The Rise of the In-House Agency.”
- Cost efficiencies are the most often mentioned advantage of in-house agencies.
- Quicker turnaround time is also a major benefit.
- Factors such as institutional knowledge and having a dedicated team have grown in importance.
The current marketing environment, with its increasing emphasis on productivity, speed, and cost-effectiveness, lends itself well to in-house agencies.
Our research indicates that procurement currently has some influence in moving business from an established agency to an in-house agency. Among those companies that have a marketing procurement department, 45 percent say procurement is somewhat or more influential in deciding to move business in-house. This influence is likely to grow. Just as production decoupling and media auditing burst on the scene a few years ago and became strategic drivers of value for procurement, in-house agencies can also provide substantial value. Marketing procurement should take notice!
By Yasmin Melendez, director of committees and conferences, ANA
Posted: Sep 18, 2013 9:33am ET
Last week, 15 ANA members from a variety of industries including financial services, QSR, CPG, health care, spirits and telecommunications gathered at ANA headquarters to review over 185 entries submitted for the Multicultural Excellence Awards. Now in its 13th year, these awards recognize marketers and their agencies or media company for their outstanding work in advertising to African-American, Asian, Hispanic, and LGBT audiences.
Over the course of two days, judges evaluated 370 pieces of creative and discussed and sometimes debated the cultural insights used to target multicultural segments in a variety of mediums. The predominant sentiment was that although the discipline has made great strides, there's still a lot of work to be done. Here are some of the takeaways I took from the experience:
- Senior Management Support Matters - This year two entries pushed boundaries by portraying interracial or intercultural couples. According to the 2010 census, interracial and intercultural couples represent 10% of couples in the US. That's over 30 million Americans! Companies such as General Mills and American Family Insurance among others have started to show this new reality in their advertising and have met with public criticism. Having the commitment from the c-suite to weather the storm will ensure that marketers continue to break new ground.
- Execution Counts More Than Budgets - It was refreshing to see creative that were simple and yet powerfully effective in targeting their respective audience segment. While budget cuts may force some marketers to translate general market creative, being targeted and using cultural insights is always more impactful.
- Multicultural Marketing Goes Beyond Color - While the majority of the budgets are spent in marketing to Hispanics, African-American and Asians, this year we saw campaigns targeting Indians, Native Americans, Brazilians, and Western European ex-patriots living in the United States. Cultural insights go beyond skin color and the opportunities for marketers are endless if done right.
- The Void of Luxury Brand Advertisers - The 2010 census data revealed that "affluent" Hispanics, African-Americans and Asians each comprise 7-9% of the US population. Affluents are categorized as those with a household income of at least $100k. While kudos to those luxury brands that are marketing to multicultural consumers, the examples we reviewed showed that there's still a long way to go.
- "Total Market" Can Go Awry – The "Total Market" Approach is seen as a cost effective way to connect with several segments, but if not executed properly the creative can underwhelm. The best total market creative surprised and delighted judges in its subtle and yet powerful use of cultural insights to transcend ethnicity.
By Bill Duggan, Group EVP, ANA
Posted: Sep 13, 2013 3:33pm ET
Dictionary.com defines disintermediate as: “to attempt to do away with intermediary entities between two primary market forces; to eliminate the middleman.” ANA has released a new report, “The Rise of the In-House Agency,” and traditional ad agencies need to take notice of the findings, or risk disintermediation.
The current marketing environment, with its increasing emphasis on productivity, speed, and cost-effectiveness, lends itself well to in-house agencies. Furthermore, the increased use of newer media (digital, social, mobile) puts a premium on turnaround time/speed, accelerating the expansion and importance of in-house agencies.
In-house agencies are rising to play bigger, more sophisticated, and strategic roles. External agencies are being disintermediated to some degree by in-house agencies. A majority of respondents in our research say that they have not only moved established business that used to be handled by an external agency to their in-house agency, but have also assigned newer functions, like digital/social/mobile, to their in-house agency. Such disintermediation has already happened in production, as more marketers decouple production from their creative agencies. There will be even greater disintermediation if the penetration and stature of in-house agencies continues to grow.
External agencies need to take notice, as the growth of in-house agencies may indeed be a warning sign that marketers are questioning the role of traditional shops. As the traditional agency marketplace continues to evolve, such agencies must reassess and redefine the value proposition they provide to clients. The rise of in-house agencies has great benefits to client-side marketers, and agencies must now give more consideration to how this affects them.
By Bill Duggan, Group EVP, ANA
Posted: Sep 10, 2013 10:02am ET
I attended the opening day of the “The Total Market Conference” from the Cross-Cultural Marketing & Communications Association on Monday in NYC. According to the CCM&CA, the total market is the description of a business vertical emerging within the marketing and communications industry; it describes the converging “general market” and multicultural business verticals. The purpose of the association is to provide total market enterprise and cross-cultural marketplace awareness, education and certification across business, governments and education verticals. Lots of rich information was shared and a half dozen key takeaways for me follow:
- Importance of Millennials: There is no bigger single source of growth today than millennials and multicultural millennials in particular. Over 40 percent of millennials are non-white. (Jeff Yang, The Futures Company)
- Wall Street Loves Multicultural: Multicultural audiences can be the first to demonstrate growth trends that can drive the entire market and also drive financial valuations. (James Dix, Wedbush Securities)
- Brand Value Increases by Total Market Appeal: Having a brand that appeals to the total market increases brand value. Strong cross-cultural brands have meaningful connections across all major ethnic segments – Hispanic, African American, Asian, and White. Subway and McDonald’s were cited as the top brands in the QSR category. (David Burgos, Millward Brown)
- It’s “Cultural Branding” rather than “Multicultural”: Pepsico uses the term cultural branding instead of multicultural. They are not just looking at ethnicity but considering the role of culture in music, sports, and more. The move from multicultural to cultural branding can have a positive impact on funding and the perception of the team within the organization. (Javier Farfan, Pepsico)
- Research is Lacking: The research segment has not caught up to the needs of multicultural marketers. (Lizette Williams, Kimberley-Clark)
- Employees are Vital: Your employees are perhaps your most important consumers and your employee base needs to mirror your consumer base. (Greg Kuczaj, Towers Watson)
By Bill Duggan, Group EVP, ANA
Posted: Sep 5, 2013 10:02am ET
ANA has released a new report, “The Rise of the In-House Agency,” and the findings are most interesting. Highlights:
The penetration of in-house agencies has increased 16 percentage points, to 58 percent, from our last survey in 2008. Also, there has been an increase in the number of employees on staff at in-house agencies.
- These increases are, in part, a reflection of the economic environment in which corporations have reduced budgets and are being challenged to do more with less. Moving the agency in-house — or increasing the role of an existing in-house agency — can help reduce costs.
- The growth of digital/social/mobile and the need for quicker turnaround for those media has played a role in the increased penetration and responsibilities of in-house agencies.
The services handled by in-house agencies are varied.
- The most commonly handled service by virtually all the in-house agencies surveyed is creative for collateral/promotional materials. Email, tradeshow/event materials, and direct mail are also widely serviced by in-house agencies.
- Half of all in-house agencies handle some level of media planning and/or buying.
- Newer media — specifically, social media, online display advertising, and search engine marketing — rank high on the list of media services handled in-house. In fact, when asked an open-ended question about the biggest changes in their in-house agencies in the past year, a significant number of responses centered around newer media.
In-house offer key advantages and appear to be growing in stature:
- Cost efficiencies are still the most often mentioned advantage of in-house agencies, although the percentage of respondents naming costs as the primary advantage has declined significantly since the 2008 survey.
- While quicker turnaround time is also a major benefit, other factors such as institutional knowledge and having a dedicated team have grown in importance since 2008. This indicates that in-house agencies are increasingly more sophisticated and strategic, not just “fast and cheap.”
Traditional agencies are being disintermediated to some degree by in-house agencies. A majority of survey respondents say that:
- They have moved established business that used to be handled by an external agency to their in-house agency.
- They have assigned newer functions, like digital/social/mobile, to their in-house agency rather than to an external agency.
The full report is available onthe ANA website.
By Bill Duggan, Group EVP, ANA
Posted: Aug 30, 2013 10:03am ET
Over the last few months ANA has been surveying our members to better understand the penetration and use of in-house agencies. We will officially release that research on September 4 and have a webinar scheduled for that day. The findings are most interesting!
We define an in-house agency as “a department, group, or person that has responsibilities typically performed by an external advertising or other marcomm agency.” Note that an internal PR function is not part of our definition of an in-house agency.
Many ANA members have in-house agencies and a dozen examples are: Adobe, AFLAC, Blue Shield of California, Combe, Dell, Fidelity, IBM, Kraft, Marriott, True Value, Wells Fargo, and Wendy’s.
Traditionally, marketers have used in-house agencies for cost savings and quicker turnaround times, and those are still valid reasons for having an in-house agency. Our survey shows that the penetration and stature of in-house agencies is rising. This increase is, in part, a reflection of the economic environment in which corporations have reduced budgets and are being challenged to do more with less. Moving the agency in-house — or increasing the role of an existing in-house agency — can help reduce costs. The growth of digital/social/mobile and the need for quicker turnaround for those media has also played a role in the increased penetration and responsibilities of in-house agencies.
“Fast, cheap, good — pick two!” Most every marketer and agency exec has heard that quote. For years, in-house agencies were known as being fast and cheap, but not necessarily good. Now, many are good — in fact, very good – and are providing critical strategic services.
This new research provides insights into the services that in-house agencies handle, the degree to which external agencies are displaced by in-house agencies, the advantages and disadvantages of in-house agencies, the internal costs to the company of employing in-house agencies, and more. In-house agencies are indeed rising and are now more important than ever! We’ll share more in upcoming blogs following the release of the research report.
By Bill Duggan, Group EVP, ANA
Posted: Aug 20, 2013 10:02am ET
I just came across two great articles related to commercial loads.
Al Jazeera America, which launches today (August 20), announced that it will have only six minutes of commercials each hour. This low ad ratio is "one of our key competitive advantages," according to their CEO.
Meanwhile, I came across a blog titled Get Stronger While Watching TV, where the author wrote, “While on vacation, we were watching the Godfather on AMC. I was feeling a little antsy, so I decided to do some push-ups during the commercials. The commercial breaks were pretty long, so I did between 25 and 50 reps on each break. By the end of the movie, I had hit 500!”
The commercial loads on many cable networks in particular have really gotten out of control. Long commercial breaks diminish the effectiveness of an advertiser’s message. Viewers can’t help but tune out of advertising when there is a relentless parade of commercials. And advertisers with spots in the middle of the pod likely are over paying as rates are based on average commercial viewership rather than brand-specific commercial ratings. Prolonged commercial breaks are not in the best interest of advertisers!
Al Jazeera America has the right idea and more networks are encouraged to better manage their commercial loads.