What I Learned in London at the WFA Sourcing ForumJanuary 27, 2014
By Bill Duggan, Group EVP, ANA
I just attended the WFA Sourcing Forum in London with about forty sourcing professionals and learned so much! Some highlights:
Production decoupling has been around for some time now. In this meeting, for the first time, I heard about decoupling the music used in advertising. Most clients cannot answer the question, “How much do you spend per year on the music in your advertising?” And while that’s a bit scary, it also represents an opportunity. According to the consultant who presented at this meeting, big clients can spend tens of millions of pounds (and dollars) per year on music in advertising. Having a consolidated global approach to music can lead to significant cost savings in addition to better quality and greater access to talent. While many companies decouple production, few decouple music. And that is likely to change.
Global Agency Remuneration Trends
The WFA debuted results of their new survey on global agency remuneration trends. Some key insights:
- There is an increased use of performance incentives.
- More advertisers have clear intentions going forward to use performance metrics.
- There is a particular desire for more media agency compensation to be performance based.
- A concern: lack of consistent KPIs across agency rosters and a given advertiser could possibly employ different incentive models for various agency types.
- The leading “hard / business” performance metrics are market/brand share and sales growth for creative agencies and buying targets for media agencies.
- According to one advertiser, every marketing procurement manager at this company has sustainability goals. The company is a leader in sustainability and, in future, more companies are likely to ask marketing procurement to have sustainability goals.
- One of the presenters stressed the critical importance of senior level endorsement for procurement. That presenter has a CEO who has a focus on driving out unnecessary costs to invest in growth and that aids procurement. Senior stakeholder support only comes from the procurement strategy dovetailing with the marketing strategy, both top-down and bottom-up.
At this meeting I had the opportunity to present ANA’s recent work on in-house agencies.
The WFA Sourcing Forum next meets 24 April in Zurich, hosted by Johnson & Johnson.
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