Business Basics & Balance

February 18, 2016

By Antonio Humphreys, co-chair of 2016 ANA AFM Conference

I love business! I love the intricacies of economic market conditions, global cultures, the vastness of company portfolios of products and services, and how we operate in a free market society. 

Referencing Investopedia.com, “a market economy is based on supply and demand with little or no government control and is an idealized form of a market economy where buyers and sellers are allowed to transact freely based on a mutual agreement on price…” This model allows for businesses large and small to compete for every consumer’s purchase considerations. To attract potential customers, businesses must offer a fair price for that desired product or service. We in the procurement profession partner with business units as stewards of budgets to ensure optimal investments of those funds — just as we all do with our own personal budgets at home.

Bringing this closer to home, there’s been much dialogue in the industry regarding business relationships between advertisers and agencies. Similarly, there has been an uptick in agency pitches this year because of transparency and trust issues. No one will deny that there is still plenty of demand for quality agency services, but also the desire to transact on a mutual agreement of price. Part of getting to a mutual agreement is to understand what factors go into an offer to establish it is fair and equitable for both parties.

I recently read an article by Blair Enns titled “A Fair Price.” In it, he references pricing guru Reed Holden who explains, “It’s not the price you charge, it’s how people feel about the price they have to pay. They need to feel the price is fair and this concept of fairness is even more personal and subjective than the concept of value because a lot of the value in a business transaction is economic and easily quantifiable, whereas fairness is nothing but a feeling — the purchaser’s feeling that the transaction and price paid were positive enough that they would gladly do it again.”

For there to be trust in our marketing/advertising ecosystem, I feel we need to align on these “Biz BnB” principles:

  • Baseline of transparency
  • Fair compensation
  • Proper service levels
  • Quality work/output

All of these items can be fairly/timely negotiated and mutually agreed upon when provided by both parties.  Speaking from the client’s perspective, this includes financial disclosures as it relates to their market investments, inclusion of corresponding audit rights, market benchmarking, and on-going business reviews.

After many years in the industry, I’ve partnered with my peer advertisers (both on marketing and procurement sides), agencies, and consultants to thrive in this marketing/advertising ecosystem. If we all strive for these core principles, we can adequately quantify and feel we’ve arrived at fair deals, trust is established, and the ecosystem is sustained. I look forward to the constructive dialogues ahead at the forthcoming 2016 ANA Advertising Financial Management conference in early May and hope to see you all there!

 ***

Antonio Humphreys is a strategic sourcing and marketing expert with a 20-plus year record of diversified portfolio management and development and delivery of highly successful, innovative strategies, which have generated millions of dollars in cost savings, revenue, and profit growth. Antonio’s roles have spanned across multiple global industry verticals including government, oil/gas, technology, and retail. Learn more at www.linked.com/in/antoniohumphreys or twitter.com/athumphreys.


You must be logged in to submit a comment.