Managing a Marketing Organization: The Agency Perspective

January 1, 2006

A Partnership to Win

By Laura Desmond -CEO, MediaVest USA

In the media business, an action absent an objective is misguided at best, damaging to the brand at worst. When making any big decision--whether it's assessing your current media structure, or the quality of the work, or the state of your relationship--it's best to start at the very beginning: What's My Objective? Give yourself permission to let the answer(s) to this question govern your actions and decisions, no matter the distractions or the detractors.

Your objectives may look something like this:

  1. Explore online marketing options
  2. Cut the least effective media from my plan so I can concentrate my investment on the most impacting connection points.
  3. Increase collaboration between the media, marketing, sales and promotion teams.
  4. Determine if television is still the best way to reach my target
  5. Understand my ROI

Using these objectives to illuminate your path, you can audit your current media spend and mix, evaluate your relationships, investigate the state of your resources, and ultimately develop evaluation criteria. You may find yourself asking critical questions like:

  • Is my media partner flexible to adapt to the changing needs of my business? I.e., Are they qualified to build consumer connections across new and emerging digital platforms?
  • Do they have strong leaders who are willing to challenge status quo?
  • Do they bring ideas to table without prompt?
  • Are they structured to meet more than the basic client service demands?
  • Can they rationalize the media mix and investment levels?
  • Is the media product efficient, creative, and measurable?

Likely, each organization will have a unique set of needs and expectations from their media partners and a more exhaustive investigation is required before any major decisions are made. But if you start with the fundamental question: What is My Objective?, it's a solid and intelligent launching pad and will trigger an avalanche of thought-provoking questions and answers that can lead you to a rewarding and sustainable partnership with your media group. When resources, talent, vision and needs are aligned, and expectations are clear at the get go, that's a Partnership to Win.


Can You Avoid Over-Staffing?

by Jean Pool - former EVP, COO, Universal McCann

The question is not can you avoid overstaffing. The question is how can you afford to staff appropriately in this era of procurement control over compensation. Over many years, we all have benchmarks that we apply to staffing depending on the difficulty of the assignment. These benchmarks work. What doesn't work are the final thrashing negotiations where realistic staffing plans and associated costs get pushed downward. So overstaffing is not an issue in the current environment. A better understanding between client and agency is of the utmost importance. We need to understand each other.


Do You Know How To Be A Leader?

by Charles Courtier, Executive Chairman, Mediaedge:cia

The leadership on your business needs two key attributes - strategic skill and the ability to integrate. The strategic skill is essential because someone has to be able to guide the advertiser through this blindingly complicated market - the empowered consumer is re-defining the media, entertainment and content marketplace. Integration skills are essential because you need a lot of specialized expertise around the table to inform that strategy. No-one has all the answers. The leader is going to have to be able to sort this expertise and integrate it into a coherent and joined-up approach.


Are You Ready To Continuously Train Your Media Group?

by Tim Jones, CEO, ZenithOptimedia U.S.A.

We've had some significant business wins throughout 2005--Nestle, Chase, Hewlett-Packard, Maybelline and Richmont, so as you can imagine....training has been front and center. I see five distinct pillars for training a media professional:

Knowledge: Agencies need to take a "deep dive" and learn all aspects of the business (marketing, communications planning, AOR ownership) for each of the individual brands. This will empower the media agency to be in a position to effectively direct the business and represent the client to the media community.

Structure and Communication: Key decisions need to be reached early in the process on who will take the lead on communication. Identifying the primary source of communications at the Client, Media Agency, Creative Agency and other Marketing Disciplines is essential. The goal should be seamless communications.

Performance Benchmarks: KPI's must be defined and evaluated early and often. Don't wait for an annual review to tell your media agency they've missed the mark. Agreeing to benchmarks in advance will set the bar and help make the relationship and performance a success.

Staff Development and Retention: Be an advocate of your media agency personnel. If someone is making a noticeable difference on your business and is a key contributor, let agency management know about it. This will go along way in letting key agency personnel be "the client champion". While most agencies will pride themselves on hiring, training, nurturing and retaining the best people, working for a great client is equally as important as financial incentives.

Application of Innovation and Learning: Developing Executive Management teams, comprised of senior level members from all areas of the business allows for the business to move forward. These teams meet monthly to discuss all aspects of the clients business and to exchange ideas, solutions, return on investment and creativity.


Comments on Efficiency

by Mike Haggerty, Executive VP Managing Director, Carat

We no longer look at media efficiency as the primary measure of media plan effectiveness. For many clients we are now focused on metrics that measure the client's business success as a result of investment in marketing communications. A couple of best practices are being employed here:

    1. 1. Be willing to use Marketing Mix modeling, as it is the best measure of the effectiveness of the media plan. The cost of a modeling project is small when compared to the expenditures our clients are making on marketing communications, and the ROI information available from these models allow us to continually refine the communication mix to maximize business results.
    2. 2. Establish effectiveness metrics for the overall media plan the same way you do in a Direct Response Model. In DR, the cost of acquisition is a pure success measurement, and we encourage clients to incorporate this kind of thinking into all aspects of their marketing plans. Some plans do in fact, seek acquisition but many others look to drive awareness.... education and action....brand loyalty, repeat purchase, adherence. We are establishing specific metrics with our clients to measure plan success by looking at things as different as recall, dealer visits and test drives in the automotive category, doctor's appointments and new prescriptions for our Pharmaceutical clients, box office receipts, and of course sales.

Should we still look at CPMs?

Absolutely we should continue to look at this important metric. The only word of caution here is to make absolutely sure that the "value" portion of this price/value ratio is stated accurately. Here is a case in point from Carat's Philips client.

Example: Philips Electronics

Philips Electronics bought the entire commercial load, 9 minutes, in an episode of 60 minutes, and ran only four and one-half minutes of commercials.

On the surface this would seem to be a very inefficient by stand CPM measures. Not only did Philips air less commercials by made a customized spot promoting itself bringing sense and simplicity, their tag line, to this broadcast. Viewers were asked to express opinions on a website and overwhelmingly, they were engaged, thankful, and had positive impressions of Philips after executing this tactic.

This was considered highly efficient when the metric based upon the desired outcome from viewers, not simply the number reached. Also adding to the overall value and hence, efficiency of the event was the news stories in newspapers in the US and Holland talking about the viewing event.


Agency Performance Evaluation

by Jeff Andrews, Senior Vice President, Horizon Media

Agency Performance Evaluations can be a valuable tool for both clients and their agencies. For both parties, they can help clarify common goals and expectations as well as set the tone and direction for the year. The benefits are obvious; communication is improved, misunderstandings avoided, and team espirit de corps fostered.

Preparing the Evaluation: The first step in the preparation of the Agency Performance Evaluation, is reaching a complete understanding of the scope of services the agency will be providing. This information may or may not be contained in your contract with the agency. In any event, separate scope of work and mutual expectations' documents will prove extremely valuable throughout the exercise. Performance report cards can be structured and handled in a number of ways, and can include both quantitative and subjective measurements pre-agreed upon by both parties.

Quantitative Goals: One aspect of agency performance evaluation may include achievement of specific performance measurements agreed upon by both parties. These performance metrics may consist of various return on advertising investment measures such as sales, traffic, share, awareness, or other growth measurements. Additionally, quantitative goals such as lowering, or maintaining media costs might be included in the evaluation.

Subjective Goals: You may wish to include performance measurements on other, more subjective criteria, as well. For example, you may want to gauge the effectiveness of your agency team with regard to overall knowledge of your industry category or your products in specific. You might also wish to evaluate the agency's ability to innovate and bring forth new ideas for your brands.

Collaboration: In any case, it is critical to have an open discussion with your agency regarding the criteria you wish to be measured and the goals you want to achieve for the year. You will achieve the best results if your Agency Performance Evaluation is fair and equitable for both parties. I recommend that you review your contract and Agency Report Card with your agency once a year.


Making Decisions

by Charlie Rutman, CEO, MPG

Ask any high-stakes decision maker on Wall Street what kind of person makes an effective trader, and what kind of organization makes for the best trading, and they'll tell you:

  • Informed and fully aware of the risks and rewards
  • Quick, decisive, able to take a loss and move on
  • Self-aware, even humble, with emotions on keel and egos out of the way
  • And in the end, intuitive, self-confident, and gutsy

Advertisers have more in common with those on Wall Street than long hours. Making great decisions, large and small, long-term and short-term, always comes back to excellence in these four areas.

Informed: Do prep work in advance--clearly and concisely communicate all necessary data, preferably in writing. It's worth it in the long run to do the work upfront.

Determine objectives, strategic direction, and basic (perhaps clichéd) marketing principles such as your brand's personality, the USP, etc.

Once these are approved in advance, clearly communicated, and considered up-to-date, then:

  • Media partners can bring great ideas to the table that are smart and on strategy.
  • Agencies can exercise good judgment, screen out bad ideas, accept the right ones, and in many cases, be empowered to act on the client's behalf without involving them.
  • Clients can quickly authorize all matters under the umbrella of the pre-approved marketing plan.

Quick: Decisive--there's never an excuse to short-change the analysis, but there has to be a moment to decide and commit. Sometimes a quick 'no' is better than '...let me think about it and I'll get back to you.'

Be accessible--avoid the circuitous route--make sure that everyone knows how to get to the decision maker, any time of the day or night.

Self-aware: Remaining self-aware and objective is essential to good decision-making. To do this, you need to recognize your inherent biases and check your ego at the door.

Self-confident: Trust your gut and be the ball--today, people can be over-cautious and data-centric, but the greatest ideas of the past have always come from the gut. That said, trust your team, and choose good people--a trader often works alone, you've got your whole agency to rely on.


Paper Reduction

by Steve Grubbs, Chief Executive Officer, USA, PHD USA

We are all ramping up personnel, systems and resources to manage increasing investments in online, interactive, VOD, mobile and other new forms of consumer contact. The flow of information between client and agency is now technology driven, too. E-mail, extranets, video-conferencing are commonplace. And yet stunningly there are still many facets of client/agency interaction that seem to require an exchange of that good 'ol fashioned forestry by-product...paper.

There is little need for any paper exchange in our business today, except for Sarbanes-Oxley related documents. So why are some agencies still producing 100 page planning decks and 20 copies of 15 page post-analysis that most senior execs never fully read? Clearly, old habits die hard.

We are all challenged by procurement specialists and our own financial management to seek out more operational efficiencies (get by with fewer fingers and toes). We are all challenged by the limitation of our personnel calendars (not enough hours in the day). It's time to undue 30+ years of bad habits.

  1. Every advertiser and agency should be connected through an extranet. All documents should be stored on this extranet. This is certainly cheaper and more easily accessible than archiving paper documents (remember Iron Mountain?).
  2. "Executive summaries" of no more than two pages (preferably one page) should suffice for most recommendations and post analysis. The full version can be stored on extranets.
  3. Presentation "leave behind" documents should delivered on CD-Rom disks.
  4. Please support the AAAA's e-biz initiative. This will enable, among other things, an electronic trail of all steps in the transaction process between vendor and agency.

Finally, sit down with your agency team and analyze your workflow process. There are likely reports and other tasks that have been performed quarter after quarter, year after year that are no longer relevant. Some should be eliminated, some reduced in scope. Ultimately, this will generate manpower efficiencies and allow you agency more time to focus on what's really important... helping you grow your business. And at the very least, Mother Nature will smile upon you.

Source

"Managing Your Media Organization." Jane Twyon. ANA: New York, 2006.