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Marketing Maestros

Procurement & In-House Agencies

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.”

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!

Takeaways from the Multicultural Excellence Awards Judging

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:

Disintermediation of Traditional Agencies

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.

New Industry Association:
Cross-Cultural Marketing & Communications Association

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:

The Rise of the In-House Agency

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.  

 The services handled by in-house agencies are varied.

In-house offer key advantages and appear to be growing in stature:

Traditional agencies are being disintermediated to some degree by in-house agencies. A majority of survey respondents say that:

The full report is available onthe ANA website.

In-House Agencies Grow in Importance

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.

Commercial Loads are Getting Out of Control

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. 

Initial ANA Perspective on Publicis-Omnicom

By Bill Duggan, Group EVP, ANA
Posted: Aug 7, 2013 10:02am ET

The following is an initial perspective from ANA on the Publicis-Omnicom merger, as provided to Ad Age.

We’ve heard concerns from some members about competitive conflicts. Bringing Publicis and Omnicom together will bring competitors under the same holding company umbrella. In some cases fierce and direct competitors. In other cases, indirect competitors. Marketers are working with more agency types than ever before and usually unbundle their work to multiple agencies—creative agency, media agency, specialty agencies, etc. So the ability for Publicis and Omnicom to put up firewalls to safe guard against conflicts becomes even more complicated. There are more agencies and more firewalls required. And therefore more risk of leaks in those firewalls.

And there are concerns we have heard from members about options becoming more limited, as two holding companies are merging into one … and one holding company option is now going away.

This may now present an opportunity for smaller and mid-sized agencies to be seen as attractive options if clients are concerned about conflicts from this merger or the now reduced number of holding company options. But the smaller and mid-sized agencies are likely to be domestic/U.S. based solutions and not global solutions.

The merger will bring expected benefits to Publicis and Omnicom with efficiencies from size and scale. Marketers may benefit from that size and scale. There has already been some speculation in the press that the merger could bring the benefit of greater media efficiencies (Brian Wieser perspective), given the combined clout of the two holding companies. But marketers also hire agencies for innovation and creativity. Clients of Publicis and Omnicom should directly ask their agencies – “What’s in this for me? “How will this impact my business?” Marketers who are clients of Publicis and Omnicom, in fact, have a responsibility to have those candid conversations.

The resulting Ad Age story is here.

ANA will host a webinar on this issue on August 21 with Brian Wieser of Pivotal Research.

Ted Turner’s Best Business Practices

Posted: Jul 23, 2013 12:43pm ET

Editor’s note: Todd Wilkinson’s work is well known to readers of ANA Magazine. Over the years, he has written numerous profiles and think pieces about leading CMOs. His new book, Last Stand: Ted Turner’s Quest to Save a Troubled Planet (Lions Press), demonstrates how companies that do good by their customers and their environment can be rewarded in the marketplace. We invited Todd to pen the guest blog below about Turner’s best business practices that still guide him as he tries to blend economic profitability with the goals of preserving the natural world and helping humanity.

By Todd Wilkinson

The first thing you need to know about Ted Turner is that he rejects the premise that economic prosperity must translate into a despoiled environment. “I believe the object of being a responsible business person is to leave the lives of those you come in contact with richer, not poorer; smarter, not dumber, and fuller rather than more depleted,” he says.

Make no mistake, the green Turner is a shrewd businessman, an innovative thinker and billionaire who time and again has demonstrated an uncanny ability to peer around corners and anticipate new emerging trends in society. While plying his fortune as a do-gooder and tree hugger, he’s also a believer in free enterprise. “Capitalism isn’t the problem,” he says. “It’s how we’ve been taught to practice capitalism that has caused dire problems in the world, affecting nature and human quality of life.”

In writing Last Stand, I thought a lot about the great conversations I’ve had over the years with ANA member CMOs at some of the biggest companies, as they share a lot in common with Turner. Last Stand is a story about conscientious leadership. Here are seven lessons from Ted based on his own slogans or aspirational mantras that have guided him over the past 50 years.

  1. Early to bed, early to rise, work like hell, and advertise. This was the first maxim taught to Turner by his father in the 1960s. Ed Turner, the family patriarch, had built a regional advertising business in the Southeast armed with an arsenal of billboards. Indeed, it was this mom-and-pop operation that Ted Turner parleyed into a global media empire in Atlanta. In hindsight, Turner believes the phrase speaks to more than an obvious roll-up-the-sleeves work ethic. His best ideas, he says, always emerged from getting a full night’s rest. In fact, Turner believes that it’s better to approach a business opportunity from the promise of rising sunrises than from the fading light of dusk. A notorious workaholic, Turner says effective advertising is about more than pitching a product — it’s about the execution of purposeful vision, persistence, and helping others open their eyes to understanding broader landscape
  2.  Either lead, follow, or get out of the way. These words are etched into a plaque that still sits on Turner’s desk in Atlanta, and they were a guiding mantra that carried forth his famous underdog battles. They inspired him when he skippered the yacht Courageous to victory in the 1977 America’s Cup; when he started TBS the Superstation and pioneered 24-hour news with CNN; when he turned the hapless Atlanta Braves into a perennial pennant contender and World Series champion; and when he’s tackled major conservation, humanitarian, and national security initiatives. For Turner, the slogan means having the courage to be innovative, and not letting your own fears stifle others from seeking the next big idea. “The best breakthroughs that I’ve been involved with started with naysayers proclaiming something couldn’t be done,” Turner says. “Believe in big ideas because they are the only things that have ever changed the world. Step forward and aim to be part of solutions. This applies equally to business as it does to trying to make positive contributions to our communities and lives of customers.”
  3. Remember the Rotary’s Four-Way Test. The first business service organization Turner ever belonged to was the local chapter of Rotary Club International. When making business decisions, he strongly subscribes to the ideals of Rotary’s Four-Way Test: 1. Is it the truth? 2. Is it fair to all concerned? 3. Will it build goodwill and better friendships? 4. Will it be beneficial to all concerned? Through the United Nations Foundation that he founded, Turner is working with Rotary to eradicate polio and reduce the incidence of malaria in developing countries.
  4. Seek scale. Everything starts small, but real accomplishment comes from operating at scale. Turner became a billionaire by figuring out how to make cable television available in every living room and office in America. But he also knew that giving customers original distinctive content is what would complete the sale. He’s taken the same premise and applied it to land stewardship and humanitarian causes. With two million acres, he is the second largest landowner in the U.S. His herd of bison, some 55,000 animals strong, is the largest ever owned by a single individual in history. Bison are being used as “ecological tools” in healing marred landscapes. Innovatively, as part of his pasture-to-plate initiative, Turner is at the forefront of promoting the health benefits of eating bison.
  5. “Eat great. Do good.” Diners at Ted’s Montana Grill restaurants across the country are greeted with this motto, which dovetails with the business approach to the Triple Bottom Line (see below). Customers are courted and praised as partners for insisting on having a healthier diet, reflecting on where their food comes from, and doing their part in generating less waste and protecting the natural world. At all the eateries, replicas of priceless 19th century romantic landscape paintings (the originals of which are owned by Turner) are featured and used to promote a vision of what healthy landscapes look like.
  6. “I was cable before cable was cool.” Companies that chase what’s popular in the moment are destined to always be behind the curve, Turner says. Trends are set by anticipating what customers want but, more importantly, what they need. The premise also applies to companies when they endeavor to think and act green. Turner and business partner George McKerrow have been major catalysts in helping the one-million-member strong National Restaurant Association refine its thinking about sustainability. In their own operation, Turner and McKerrow have realized millions of dollars in cost savings by embracing efficiency in energy, water use, and waste. As Turner says, “Doing what’s right by the environment delivers dividends.” Which brings us to the next point:
  7. The value of the triple bottom line. This is a socially conscious accounting system based on the premise of a three-legged stool. The first delivers profit, the second ensures that products are made in a way that does no harm to the environment, and the third has a human dimension: treating your employees right and investing in the local community where profit is made. “Our business lives should make us feel better at the end of the day,” Turner says. “If we strive to leave the world a little better off than how we found it, every one of us can make a difference.”


Top Tweets from the ANA Digital & Social Media Conference

By Marni Gordon, vice president of committees and conferences, ANA
Posted: Jul 23, 2013 12:00am ET

I learned so much at the 2013 ANA Digital & Social Media Conference and wanted to share some of my favorite tweets:

 @adriandparker:  Adidas has merged the Brand Manager and Digital Manager role into 1 marketing position. Digital is everyone's job 

@robj76: @adrianparker puts his marriage through ROI sales funnel from awareness to commitment - very entertaining  #ANADigSoc

@ItsRaVaughn: Had so much fun performing @ #ANADigSoc tonight! They welcomed me with open arms and made me feel at home! Glad I could share my story!

@shivsingh  Looking forward to an inspiring morning and having an opportunity to catch up with some peers and friends

@yyAndrewkn:  Worth repeating: In #business, it takes 3 positive interactions to balance 1 negative cust experience. #ANAdigsoc #socialbiz #CustServ

@ANAMarketers:  Taco Bell's Lieberman: We make sure Live Mas is not a tagline, it's core to how we engage our fans.#ANADigSoc

@jaredmelzer  @ANAMarketers MasterCard's Badian: getting consumers to endorse your brand in the social space is what we're after. #ANADigSoc

@kaydeebird:  Most credible spokesperson is your employee and most credible salesperson is your customer. Stop chasing influencers. #ANADigSoc @jaffejuice

@billduggan:  @MichaelDonnelly spoke of the importance of "partners" rather than "vendors." I agree. Vendors sell hot dogs at the ballpark. #ANADigSoc

@ChaseMcMichael: 300K employeesnow on #OneHP, in just 6 months thats impressive @HP's Chris Curtin #ANADigSoc

If you would like to read more, check out this blog on key highlights from the conference.

The 2014 ANA Digital & Social Media Conference will be July 13-15th in Dana Point, CA!  Register early and I look forward to seeing you there!!!!

 


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About This Blog

To complement our two leadership blogs and build dialogue on the seismic changes happening in marketing, we launched Marketing Maestros. Our in-house citizen journalists will talk about everything from marketing technology to accountability and everything in between. This blog is written for marketers by ANA's marketers whose insights are drawn from the voices of the client side marketing community.