Posted: May 15, 2014 10:00am ET
Transparency issues between marketers and their media agencies are on the rise, per a new ANA/Forrester Research survey.
Forty-six percent of marketers have concerns about the level of transparency between themselves and their media agency(s). Further, concerns about transparency have increased for 42 percent of marketers over the past year, and have decreased for only 13 percent.
The issues that cause the most concern are:
- Reliance on served impressions, rather than viewable impressions, for digital media
- Not knowing if my agency makes money from the media sellers on my media buy (e.g., are they getting rebates from the media?)
- How and where digital advertising gets placed (e.g., frequency caps, inappropriate content, share of voice, above-the-fold)
- Lack of visibility into data used to define audience targeting, especially in digital media
As stated in a previous blog, there is a transparency crisis in the advertising industry and this new research further confirms that. What are the implications for marketers?
- You don’t know what you don’t know. Marketers need to be aware of the transparency issues facing the industry and ask questions. Naive marketers could find themselves taken advantage of.
- Marketers should incorporate language in their agency contracts to provide protection. For example, language should specify how rebates made on a client’s business will be handled. Such contractual language should be at both the agency and holding company levels to address an agency’s overall arrangements and ensure the fair share allocation of total agency incentives/rebates, and outline the process to reallocate those dollars to a specific client.
- There is an opportunity for procurement to play a role. Procurement can have strong process management skills with strengths in risk mitigation. More procurement groups are now involved with media, recognizing that this is the largest marketing expenditure at many organizations.
As our industry continues to evolve, transparency issues between clients and agencies are likely to remain concerns. For example, programmatic buying—which has various intermediaries between the buyer and seller—appears to be an issue with emerging transparency concerns. Marketers would be wise to pay attention!
Thanks to The Economist for first publishing this viewpoint in their Lean Back marketing blog.
By Bill Duggan, Group EVP, ANA
Posted: May 7, 2014 3:00pm ET
ANA’s new research, “Optimizing the Procurement & Marketing Relationship,” looks at the relationship between procurement and marketing.
There was a notable disconnect when respondents were asked to rate the importance placed on various metrics.
- Marketing placed its highest importance on the business metrics of sales/market share increases, improving marketing ROI, and improving brand health metrics.
- Marketing procurement focused on cost reduction, process improvements, risk mitigation, and cost avoidance.
- There was equal emphasis from both marketing and procurement on innovation, agency/supplier performance, internal stakeholder satisfaction, and industry intelligence
A key learning in this research: better alignment between marketing and procurement on success metrics is required. While cost is important, procurement should pay closer attention to the metrics of highest importance to marketers – specifically sales/market share increases, improving marketing ROI and improving brand health metrics.
By Jesse Feldman, manager, marketing knowledge center
Posted: May 7, 2014 11:00am ET
My team has had a busy month strategizing how to best bring insights from our Marketing2020: Organizing for Growth survey to members. Marketing2020 was a joint ANA and EffectiveBrands study and the most comprehensive global marketing leadership initiative ever undertaken. For a further overview of Marketing2020, check out this ANA webinar summarizing how CMOs, CEOs, and other leaders can align their strategies, organizations, and capabilities to build their brands in the years ahead.
New, “snackable” articles from Marketing2020 will go live once a week on a dedicated section of our site. You won’t need a password to view the articles — so if you find the findings as fascinating as we do, share the links across your social networks (hint: your LinkedIn connections will find them fascinating). This week I wrote about the direct correlation between companies offering more days of formal training and overall performance. You (or your boss) might be surprised to see how few respondents felt they received adequate on-the-job training.
Upcoming topics we’ll be covering include marketing leadership traits that drive growth and top motivators for successful marketers. We’ll also be publishing infographics and key findings reports to help marketers align their strategies, organizations, and capabilities to generate growth in the years ahead. You can also follow the conversation on Twitter with #Marketing2020.
Jesse Feldman works in the ANA’s Marketing Knowledge Center (MKC), a rich suite of insights, case studies, event recaps, and research. You might notice her taking notes for the MKC at committee meetings, members-only conferences, or (virtually) webinars. She’ll be popping onto the ANA blog to regularly highlight some latest and greatest MKC content.
By Constantine von Hoffman, editor of ANA Magazine
Posted: May 6, 2014 1:30pm ET
Tuesday at the ANA Advertising Financial Management conference got off to a great start with a lively, informed — and PowerPoint free! — talk on the future of marketing by Rishad Tobaccowala, chair of DigitasLBI and Razorfish.
He began by pointing out all the assumptions the marketing industry has about the future — how it will be increasingly digital, social, data driven, mobile, and focused on emerging markets. No great surprise there, but then he started dissecting those assumptions and looked at what is left out of them and their implications.
First, he looked at how important analog’s ideas and actions remain despite the seeming triumph of all things digital. For example, there is the way mobile is putting more emphasis on people and places, like how people go into a brick-and-mortar store and then look online to see if they can get a better price. That’s digital supplementing analog.
One of the reasons analog will always be important is because digital is binary – yes/no, on/off – while people are not. We are a “maybe” species that frequently rejects data we know to be true in order to follow our preconceptions. “People choose with their hearts and then use numbers to justify what they just did,” he said. While this might seem a critical flaw at a time when all the talk is of “data-driven decision-making,” it’s actually a strength we need to understand. “The underlying basis of our business is storytelling,” Tobaccowala added, “and storytelling is analog.” In other words, if Beauty had stepped back and made a well-thought-out rational decision about falling in love with the Beast, no one would have been the least bit interested.
Tobaccowala then warned about the risk of always looking to the market leaders for innovation. “TV and video is going to come from the slime, not the heavens,” he said, turning a phrase which I bet made everyone think. His point was that just as Netflix, Amazon, and Hulu have become big by being disruptors, they didn’t start that way. The next disruptors are already out there, it’s just that no one has caught on to them yet. “Don’t pay too much attention to your bosses,” he said. “They are the past.”
The future of marketing is less about ads and more about utilities and services. He pointed out that for $60 or $70 a month people can get much of their media ad free by subscribing to things like HBO GO, Amazon Prime, Netflix, and Spotify. While not everyone will or can do this, the 30 percent to 40 percent who do are going to be the ones most desirable to marketers. The only way to reach them is by providing something useful which they will use. He summed up the consumers’ view perfectly by pointing out that ads tell consumers the brand doesn’t value their time.
That really was just the first third of his talk and the rest was every bit as interesting and iconoclastic. Tobaccowala is @rishad on Twitter and I just became a follower.
By Constantine von Hoffman, editor of ANA Magazine
Posted: May 5, 2014 2:00pm ET
The first session of the Advertising Financial Management conference got off with a bang as Decideware CEO Steven Wales announced a record attendance of more than 600 people. Proof that it’s a quality crowd here: Wales was happy about the number of people even though Decideware had just bought us all a truly fine breakfast!
Proof of quality of the content being offered: Despite the beautiful weather and the lure of nearby beaches and pools, it was standing room only for the entire first session.
Wales was followed by Jim Porcarelli, chief strategy officer at Active International, who promised interesting results of a new CFO/CMO alignment survey which he will be releasing tomorrow.
ANA President Bob Liodice then gave a nice overview of the topics to be addressed at the conference, which are also some of the biggest concerns of marketers and agencies. “This conference is about movement,” he said. “Every part of the media supply chain has been turned on its head.”
There’s no need for anyone to wait any longer for disruption, it’s here:
- It’s allowing us to have one-to-one relationships with customers.
- It’s allowing us to increase creativity and innovation, making marketing fun again.
- It’s making anyone who predicted the death of TV feel very silly.
He then looked at the chief worry of the entire industry: Are we leaving money on the table? Undoubtedly yes. The way to address that is by focusing on strategic media imperatives:
- Measurement — currently a lot of work is underway to come up with cross-platform comparison metrics but there’s still a lot of work to be done on the plethora of unmeasured media.
- Digital media value erosion — Why isn’t the industry doing more to address the problem of click fraud?
- Media transparency
- Training — Because of the rapid pace of change, very few marketers feel they know enough to optimize the tools they have. This has to be addressed.
Bob was followed by conference co-chairs Terri Burns, Aflac’s strategic sourcing consultant, and Sal Vitale, Johnson & Johnson’s category lead for media procurement, who further outlined what we could look forward to over the coming days.
By Bill Duggan, Group EVP, ANA
Posted: May 5, 2014 11:00am ET
The relationship between marketing and procurement has improved substantially and is driving results according to Optimizing the Procurement & Marketing Relationship, a new ANA survey.
The survey of 155 client-side marketing and procurement professionals, fielded in March 2014, looked at the relationship between procurement and marketing and the factors that lead to the strongest internal partnerships and business results.
Both marketing and procurement note substantial improvements in their relationship in the past year – with 30 percent of marketers and 62 percent of marketing procurement professionals reporting positive increases.
According to survey respondents, the leading factors that have driven these increases include:
- Better communication and collaboration
- Senior management support
- Alignment of success metrics
- Visibility of procurement organization
- Proven contributions from procurement
The findings indicate that the marketing/procurement relationship, which historically has been much maligned, may have finally turned the corner and is now on a positive path. That’s big news!
By Bill Duggan, Group EVP, ANA
Posted: May 2, 2014 10:00am ET
Total market was all the rage at the recent AHAA Annual Conference. Kudos to AHAA for bringing together the industry to put a stake in the ground with a definition of total market. That definition …
A marketing approach followed by corporations with their trusted internal and external partners which proactively integrates diverse segment considerations. This is done from inception, through the entire strategic process and execution, with the goal of enhancing value and growth effectiveness.
In marketing communications this could lead to either one fully integrated cross-cultural approach, individual segment approaches, or both in many cases, but always aligned under one overarching strategy.
Collaborators to this definition included industry trade groups like ANA and 3AF; client-side marketers Clorox, Dunkin Brands, Kellogg’s, and Kimberly-Clark (all ANA members!); agencies including Acento, Burrell, FCB, IW Group; and consultants Dávila Multicultural Insights and Santiago Solutions Group. Apologies if I left anyone out!
Here’s what a total market approach is:
- Recognizes that one consumer or another may represent greater volume opportunities for brands. Consequently, TMA for one brand may be different than TMA for another.
- Supported and shepherded at the highest level of the organization.
- Intends for all marketing executives to be well versed on relevant segments and feel that they have “skin in the game.”
- Reflected and embraced across the organization, its partners and its communications strategy.
- Characterized by a collaborative dynamic between the marketer and the partner agencies from the outset.
- Reflected at the strategic AND the tactical/executional level.
- New vision and approach that should be embraced as a long term strategy.
And here is what a total market approach is NOT:
- One size fits all cost reduction plan.
- Translation or adaptation of a general market campaign without diverse consumer insights from the beginning of the process.
- An assignment that is a consideration only for the multicultural MC team.
- Not a short-term test or project
Feel free to agree or disagree. As noted above, a total market approach for one brand may be different than for another. But this conversation and discussion are good for the industry!
By Bill Duggan, Group EVP, ANA
Posted: May 1, 2014 11:00am ET
ANA has released “State Commercial Production Incentives – Principles for Fair Business Practices,” a set of guidelines to help marketers navigate and monetize the complex area of state commercial production incentives.
Many states offer financial incentives to shoot commercials in their states. Although such incentives originated more than ten years ago, recently they have expanded to additional states and have become increasingly attractive to production companies and marketers. It’s not uncommon to receive a $100k rebate for a single production job! In order to help marketers navigate the complexities of state commercial production incentives, the ANA Production Management Committee developed these principles. Highlights are:
- Fairness, good judgment and transparency are key practices that should be followed by all parties (i.e., marketers, production companies, and agencies) when considering state commercial production incentives jobs.
- Additional lead time is sometimes required for jobs where production incentives will be pursued.
- A state commercial production incentive job must be filed via a single application, complete with all possible qualifying components included.
- Depending on the type of expenditure, qualification for the incentive, and the state in which the commercial was filmed, an advertiser, production company, agency or third-party entity can file/administer the process and application.
- When the marketer is filing, the production company should be incentivized to follow state guidelines and maximize the qualified spend and rebate.
- Contracts should address state commercial production incentives.
- Marketers should be aware that, in many cases, it can take between 18 and 24 months to receive rebate checks.
By Bill Duggan, Group EVP, ANA
Posted: Apr 30, 2014 11:30am ET
Rupert Murdoch was the opening keynote speaker at the 2014 AHAA (Association of Hispanic Advertising Agencies) Annual Conference. Insights from Mr. Murdoch included:
- On the growth of the Hispanic consumer: "For the first time ever, the University of California admitted more Hispanics than whites to its incoming freshman class."
- Digital allows a one-on-one relationship with the consumer. And the wireless world is the biggest enabler to a digital strategy.
- "Mobility is everything." Mr. Murdoch talked about the fact that video "running in digital" ultimately means "running on a mobile device."
Interestingly, Mr. Murdoch told the audience that this was his first time in Miami!
Sol Trujillo facilitated the Q&A with Mr. Murdoch following his prepared remarks and added interesting perspective of his own:
- 50% of all new home mortgages are to Latino families.
- Growth for U.S. Hispanics is faster than all the BRIC countries (i.e., Brazil, Russia, India, China) combined.
Congrats to AHAA on a great conference. Their twitter feed is at #thinkahaa.
By Andrew Eitelbach, senior manager of marketing and communications
Posted: Apr 17, 2014 6:05pm ET
I recently took a business trip and flew on an airline I’d never used before. Things went smoothly until halfway through takeoff when, suddenly, the pilot throttled down and began taxiing back to the gate. He used the intercom to inform passengers that a warning light had flashed, that it was probably nothing, but it needed to be checked out. Hopefully, he told us, we’d be back into the takeoff queue in no time.
As we sat at the gate, the pilot gave us periodic updates about what was going on. He explained the warning light had signaled the flaps weren’t working properly but that it was likely a problem with the light, not the flaps. When we hit 20 minutes of wait time, he explained why they need to do things properly to ensure safety, and then what that meant in this specific case. When they deboarded the plane and pushed our departure time by two hours, the pilot stood near the plane door offering apologies and reassured passengers that this was the right call.
Once off the plane, a colleague and I retreated to a different part of the airport to wait out the delay, which stretched from two hours into four. When it was time to reboard, we walked back to the gate and found the pilot still standing there calmly talking about the issue and explaining to passengers what had happened, what was done to fix it, and why. He had been doing this all day.
While the gate crew worked to get people onto other flights and scrounged up sandwiches to hand out to the delayed passengers, it was the pilot who impressed me the most. He offered a direct line of communication to anyone seeking answers. He spoke clearly, patiently, calmly, and at length to ease worries and make sure that anyone who was affected understood the situation and was comfortable with the current course of action. It was great customer service.
Sure, it would have been nice to avoid the delay, but great customer service left me singing the pilot’s praises to everyone I talked to instead of bashing the airline on Twitter out of frustration.
Like I said, this was my first time using this particular airline. If it wasn’t for the tremendous efforts of this pilot to alleviate fears and clearly communicate with customers, it would have surely been my last.