Archive | Advertisers RSS feed for this section

Advertisers Take Decisive Action to Safeguard Their Media Spend

25 Jul

Abstract concept, fingers are touching padlock symbol, With protAdvertisers, particularly larger, multi-national advertisers are assuming a greater level of responsibility for their organization’s media investments. The goal is to safeguard those investments and to spend their media dollars wisely.

The actions being taken by advertisers are clearly the result of the media industry not moving quickly or forcefully enough to resolve key issues confronting advertisers. Issues such as fraud, brand safety, viewability, tracking and performance vouching pose serious risks that undermine media effectiveness.

On the fraud front alone, cybersecurity firm Cheq issued a report earlier this year indicating that global ad fraud will cost advertisers “an unprecedented $23 billion” in 2019. Experts have stated that the continued growth in digital media expenditures, which will top $300 billion worldwide, combined with the lack of governmental and industry oversight makes this category highly appealing to fraudsters and organized crime.

Given the complexity of the global media supply chain and the technical nature of the sector advertisers are seeking to increase the level of rigor surrounding media performance and accountability.

Advertisers seeking greater transparency and security over their media funds and data have grown weary of waiting for the requisite level of support from their media supply chain partners. This has led some advertisers to transition certain aspects of their media planning and buying activities in-house. Others have formed or increased staffing and resource support for corporate media functions to enhance controls and stewardship over the investment of their media funds.

More broadly, in the wake of the Association of National Advertisers (ANA) 2016 study on media transparency, the organization in conjunction with its partner in the study, Ebiquity, issued a recommendation for advertisers to “appoint a chief media officer (in title or function) who should take responsibility for the internal media management and governance processes that deliver performance, media accountability and transparency throughout the client/ agency relationship.”

Recently, the World Federation of Advertisers (WFA), through its Media Board, recently announced that its members had formed the Global Alliance for Responsible Media. The Alliance will also be championed by the ANA’s CMO Growth Council, a member organization of the WFA. The council, which includes a coalition of advertisers, agencies, publishers, platforms and industry associations, will focus on delivering a “concrete set of actions, processes and protocols for protecting brands.”

We are hopeful that the initiatives being taken by progressive marketers such as P&G, Mars, Unilever and Diageo will spur the industry to action when it comes to comes to controls that safeguard media spend and improve the efficacy of those investments for all media advertisers.

While a rising tide may lift all boats, as the adage goes, we know from experience that when it comes to media accountability organizations cannot rely solely on the efforts of other advertisers, agencies or associations to protect their self-interests. This requires an ongoing commitment to improving media accountability, performance monitoring and stewardship efforts by them, their agents and intermediaries. In the words of Thomas Francis Meagher: “Great interests demand great safeguards.”

 

 

Assessing the Potential for Transitioning Work In-House

24 Jun

Ideas idea success growth creativity creative multi ethnic group of peopleAn increasing number of marketers are transitioning portions of their advertising activities from their external agency partners to in-house teams. A survey conducted by the Association of National Advertisers (ANA) in the summer of 2018 revealed the following:

  • 78% of survey respondents indicated that they had an in-house operation of some sort
  • This is up 58% from 2013 and 42% from 2008
  • 90% of marketers with in-house operations have increased their in-house team workloads
  • 70% of marketers have shifted work from external agencies to in-house teams in the last 3 years

Although the ANA survey indicates that some in-house agencies are increasingly handling brand strategy and creative ideation work, most marketers that we serve continue to rely on external creative agencies for this type of work and are initially focusing their in-house efforts on a range of specialty services. This approach can minimize risk and cost, while putting the essential building blocks in place for eventually launching deeper into in-house agency commitments, if desired.

Endeavoring to build out a full-service in-house creative agency is certainly achievable and there are a number of successes that one can point to. Consider Innocean Worldwide which originally began as the in-house agency for Hyundai-Kia and has gone on to acquire clients outside of the Hyundai Motor Company. Innocean’s work has won global recognition for its creative work that includes a Silver at Cannes and an ADFEST Grand Prix in 2019. As well, Innocean has committed to growing its brand and weight in the industry by acquiring noted independent creative agency David & Goliath in late 2017.

However, building out a full-service in-house agency takes time and requires an investment in evolving the culture of the operation, attracting top-notch talent, developing the appropriate processes, and positioning itself to be successful in winning internal client confidence and ultimately the creative development work.

The effort associated with attracting and retaining top-quality creative personnel to ply their wares at an in-house agency can be significant. Providing end-to-end creative services requires an increase in headcount and drives up operational fixed costs. Further, the timeline required to demonstrate in-house agency abilities and to consistently produce fresh ideas and deliver quality work is uncertain. This is particularly so if there isn’t a corporate mandate for brand marketers to utilize the in-house services. Thus, management must build-in enough time and budget to allow for relationships to take hold between the in-house team and the brand management teams, and for the in-house team to “learn” how to successfully compete for and win creative assignments.

Thus, many organizations focus initial in-house efforts on areas where the operations can clearly and immediately add value. Such services may include content curation and creation, digital, print and internal video production and the development of sales promotion and collateral material. Consolidating tasks such as these with an in-house team can improve a marketer’s agility by reducing project turn-around times and costs while improving the caliber of the output.

Many in-house operations begin as shared-services providers, subsidized by the organization and often with mandates for brand marketers to use their specialized services. Which is not a bad way to launch an in-house agency. Over time, some operations may adopt a charge-back model, where they must compete with external resources to win projects from their brand marketing peers.

Each model brings with it certain challenges. The charge-back model, with no corporate mandate for use, raises risk for the in-house team who must generate revenue to cover internal staffing, resource and real-estate costs. If the team cannot win work, their very existence may be jeopardized. And during competition for work, the team must address internal client perceptions that the services they provide will be less expensive than an external creative agency. On the other hand, if pricing is comparable to an external resource, brand marketers may question the risk / reward of transitioning work away from an established external specialist creative shop and bringing it in-house.  Additionally, end-user’s want to feel that utilizing their in-house agency “makes their life easier.”

Regardless of the model employed or the scope of services offered, it is imperative to embrace a strong project-management orientation with a comprehensive workflow management toolkit. The need to evaluate potential projects, provide cost and time estimates, log projects, manage projects and secure sign-offs requires a disciplined in-house project management function.

An important part of generating and demonstrating efficiency gains for the organization is the ability to track time-on-task, project gestation and completion rates, rework levels and the like… all of which require a commitment to recording and tracking in-house activities and utilization rates. Such information will also inform management on how and when to expand or contract staff levels and when to tap external resources to augment in-house skill sets.

The need for internal advertising support is real and makes a great deal of sense regardless of the breadth of services an organization seeks to source from an in-house operation. However, the application of the model requires a disciplined pragmatic approach to both set the breadth of service to be offered the team and to efficiently and effectively handle the anticipated volume of work.

 

 

 

 

 

Clean Up in Aisle 12. Sponsored by…

28 May

Asian grocery noodle aisleSome of the world’s largest retailers have their sights set on garnering a larger share of the ad market. And why not. Amazon is expected to generate $11 billion in advertising revenue this year, growing to $15 billion in 2020 (source: eMarketer).

So it comes as no surprise to learn that other retailers have taken steps to shore up their ad platforms. In April, Walmart acquired Silicon Valley-based Polymorph Labs and their content sensitive digital ad serving and analytical capabilities to help strengthen its Walmart Media Group and Target is rumored to be interested in acquiring WPP’s Triad Retail Media unit to support its Roundel media division. All three retailers are actively courting advertisers and their agency partners to pitch the media and product sales benefits of their data driven advertising offerings.

On one hand, one might question why is this even newsworthy? Traditional retailers have long been in the ad business, selling advertising to the brands that they carry on in-store media, in weekly ad circulars, in price-item television and radio spots and in OOH. Thus the expanded focus on sophisticated, data-driven digital advertising solutions should come as no surprise.

That said, the potential to integrate target audience information with web browsing data, shopper data and location data to serve up relevant ads in an environment where consumers can immediately click-to-buy and receive their merchandise in a day or two has the potential to revolutionize the retail ad industry.

As retailers refine their offering and simplify platform use, they will quickly cannibalize traditional search and digital display advertising activity. Factor in the ability to tap retailers omnichannel databases, with the goal of refining ad targeting to drive digital media efficiency and the appeal of retailer digital ad platforms increases exponentially.

Consider Walmart Media Group’s pitch to advertisers; with “90% of Americans shopping at Walmart every year” and “160 million visitors” in-store and online every week, Walmart Media Group helps brands to “reach more customers at scale and measure advertising effectiveness across the entire shopping journey.” 

On the surface this evolution of retail advertising certainly appears to be a win-win for the industry. Retailers benefit from a new, high margin revenue stream that is largely technology driven, relying on automated platforms. For the agency community, specialist agencies are already coming to the fore that focus exclusively on assisting brands in assessing and realizing opportunities associated with these retailer digital ad platforms. And, from a brand perspective, serving up targeted ads in a brand safe, fraud free environment with the potential to immediately convert consumer interest to sales is a compelling value proposition.

Perhaps the greatest challenge for manufacturers as more retailers join the fray, will be to balance the ongoing need to strengthen their brands and for some, to build their own direct-to-consumer offerings, while funding their participation in retailer digital ad platforms. Make no mistake, while a brand may be able to build a solid business case for investing with their retail partners, retailer leverage over brands to influence whether or not they buy-in and at what level will be real as the balance of power pendulum continues to swing in favor of omnichannel retailers.

 

 

 

 

4 Appropriate Limitations On Agency Remuneration

12 May

fourIt is our belief that agencies, consulting firms, contractors, employees and yes, even auditors, are entitled to earn as much money as they can in return for services rendered. Further, we are agnostic when it comes to the mode of remuneration, whether those fees are predicated on a resource based, outcome-based or value-based pricing model.

We also recognize that client organizations have the intelligence and wherewithal to negotiate professional services agreements that satisfactorily address both their needs and their budgets.

That said, experience has taught us that sound Client/Agency agreements should also place limitations on the revenue earned by an advertiser’s agency partners. In short, agency revenue should be limited explicitly to those forms and amounts of revenue that are intended and accordingly defined within the agreement, or otherwise agreed to in writing by the client. Period. The end.

Unfortunately, in our contract compliance audit practice, it is too often that we find agreements which don’t effectively restrict agency revenue to that which has been negotiated and memorialized in the contract between the parties. This can lead to misunderstandings and in rare cases bad behavior on the part of professional services providers seeking to unjustly optimize their revenue yield.

Below are four examples of appropriate contract limitations for advertisers to place on agency revenue, once the remuneration program has been negotiated:

  1. An agency should not be allowed to earn money on the handling or holding of client funds. Examples of this could include the earning of interest or “float” income and rebates or bonuses earned from the use of corporate credit or purchase cards to pay third-party vendors for purchases made on behalf of a client.
  2. All expenses, including those for third-party commitments and out-of-pocket expenses, should be billed on a net basis, at the agency’s cost, with no mark-up allowed.
  3. Discounts, rebates or any other benefits earned by the agency, its holding company and or related parties tied to the investment of client funds and or prompt payment to third-party vendors should be remitted back to the client upon receipt of such benefit.
  4. For direct labor based fees, the agency should not be allowed to charge for employee hours in excess of the full-time equivalent (FTE) standard (e.g. 1,800 hours per annum). Quite simply, once the FTE threshold has been met, the agency has fully recouped employee direct labor and overhead costs and realized the agreed upon profit margin.

One further measure of protection for advertisers is the addition of contract language requiring the agency to be transparent, to fully disclose all transactions and the flow of client funds along with the presence of any rebates or incentives received by the agency directly or indirectly.

Please note, that the “limitations” listed above are not meant to restrict an agency’s ability to earn a fee that is reflective of their delivered value. The intent is simply to limit agency revenue to those sources agreed to by both parties, thus providing the requisite protection to the advertiser.

“Confidence… thrives on honesty, on honor, on the sacredness of obligations, on faithful protection and on unselfish performance.” ~ Franklin D. Roosevelt

Does Anyone Care About Media?

12 Apr

Coaching Mentoring Education Business Training Development E-learning ConceptMcKinsey estimated that companies across the globe could spend in excess of $2.0 trillion on media in 2019.

A big number to be sure, and for most advertisers the media component of their marketing spend, which runs between 10.4% – 14.0% of annual revenue is a material SG&A expense (Source: The CMO Study, from Deloitte, AMA, Fuqua School of Business at Duke University).

Thus it was surprising to read the results of advertising and media consultant ID Comms recent survey assessing advertiser interest in media training. Seventy-one percent of the respondents indicated that the “investment in media training” by advertisers was “unsatisfactory or entirely unsatisfactory.”

Given that in aggregate, the survey respondents firms spend “in excess of $20 billion” on media globally, one might say that their response was stunning. This is particularly so given the scrutiny that has been given to media advertising in the wake of the Association of National Advertisers (ANA) 2016 study on “Media Transparency” that brought to light some of the financial risks faced by advertisers in this area.

So why haven’t advertisers stepped up their investment in building media competency? It would seem that advertisers the world over would place a much higher level of priority on the recruitment and training of media personnel to help them steward their media agencies to safeguard and optimize their media spend.

Media savvy marketing professionals understand that the cost: benefit proposition for staffing and training corporate media departments is quite compelling. In fact, the ID Comms survey went on to point out that nearly all of the survey respondents agreed that “brands can gain a competitive advantage in marketing” by elevating their firm’s media capabilities.

Companies have plenty of Chiefs, ranging from Chief Executive Officers, Chief Operating Officers, Chief Financial Officers and Chief Marketing Officers to Chief Risk Officers, Chief Procurement Officers, Chief Technology Officers, Chief Information Officers, Chief Revenue Officers and more.

Okay, so perhaps there is no room left in the C-Suite for a Chief Media Officer. No worries, build out the corporate media function within the marketing pyramid. No money in the HR budget to hire a seasoned media professional? No worries, bring on a fractional Corporate Media Director to assist in staffing and training the department.

The need is real.

What advertiser wouldn’t benefit from investing in the ongoing training and education of their marketing and or corporate media staffs? Honing capabilities related to setting media strategy, establishing KPIs, crafting a compelling media brief, reviewing media plans, evaluating media performance, building an understanding of the adtech sector and managing a diverse roster of media agencies would yield both near and long-term financial returns.

With the desire to improve “working media” in an increasingly complex marketplace companies would benefit mightily from building their corporate media proficiencies.

“Hire for passion and intensity; there is training for everything else.” ~ Nolan Bushnell

 

 

Be Big Somewhere… 3 Keys to Media Planning Success

20 Feb

apertureIn the past, there were two overarching concepts that helped to form the basis of an advertiser’s successful media planning efforts.

Be Big Somewhere – Simply stated, this approach held that in order to break through the clutter and gain the attention of an advertiser’s target audience one had to focus their media in places and at times where they could achieve a significant share of voice vis-à-vis the competition.

Aperture – Core to this concept was the belief that each consumer had an ideal time and place when they could be reached by an advertiser’s message. Simultaneously, there were times when the consumer was either prepared to buy or was gathering information regarding a potential future purchase. The intersection of these two points was the “aperture” and was considered to be the ideal point to expose consumers to an advertiser’s message.

Simple proven concepts that had withstood the test of time… up to a point.

At a time marked by the hyper-fragmentation and proliferation of media where consumers have access to a plethora of choices for accessing information and entertainment, it is questionable whether or not these concepts still hold true.

While the dynamic of a rapidly evolving media marketplace creates exciting content access options for consumers, it poses challenges for advertisers and their agency partners. For example, while the average amount of time consumers spend with media is significant, averaging 721 minutes per day (Source: Statista, 2019) determining the right time and place for targeting an advertiser’s message is difficult at best:

Avg. Time Spent with Media by Consumers in Minutes per Day (2017)

  • TV                                            238
  • Mobile (non-voice)               197
  • Online (laptop, desktop)     123
  • Radio                                         86
  • Other Connected Devices      33
  • Print                                          24
  • Other                                         21

         Total Minutes Per Day         721

Further, over the course of a typical day, studies have shown that consumers are exposed to somewhere between 4,000 and 10,000 ad messages. This exposure leads to increased levels of consumer apathy and message burnout. Thus, achieving a meaningful share-of-voice to break through the clutter, and then to effectively reach the target audience and finding the right aperture in this environment, is certainly more complex.

Compounding these environmental factors, at least for advertisers working with multiple media agencies, is the added challenge related to the development of an integrated, holistic planning process to help optimize media allocation decisions across agencies, platforms, publishers, networks, etc.

Moving forward there are three evolving, but yet to be perfected, media planning tools whose furtherance would greatly aid advertisers and their media partners:

  1. Cross-channel, multi-touch attribution models – In order for advertisers to truly optimize their media investments, it is imperative that they be able to assess the role that each consumer touchpoint plays in achieving their goals.
  2. Cross-platform media measurement tools – Simply put, planners need tools (e.g. common metrics) that will allow them to better understand campaign reach by platform and overall, while being able to calibrate total content ratings, regardless of where consumers view the message.
  3. Artificial intelligence platforms – AI has the potential to greatly assist media planners (and buyers) in analyzing multiple data sets to aid in everything from audience segmentation to creating and comparing alternative strategies and leveraging data on a real-time basis to optimize buys while a campaign is underway.

As the industry continues to perfect these tools and agencies master their application, the ability to plan media seamlessly across platforms will be greatly enhanced. In the words of NHL Hall of Famer, Wayne Gretzky:

A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be.”

 

 

Advertising Delivery Models Are Evolving. How Will the Holding Companies Respond?

12 Jan

dreamstime_xs_127777381When agency holding companies were birthed, they did nothing that directly impacted client businesses. They were corporate entities that owned a number of smaller agencies and the attendant portfolios of real estate, trademarks, copyrights and licenses attached to those agencies. Their primary role was to create shareholder value through structural leveraging.

As time progressed, three things happened that form the basis of the challenge faced by agency holding companies today.

Firstly, aided by low barriers to entry, there was a proliferation in both the number of agencies and the types of functional specialist shops that came to be. In the early days there were “above the line” full-service agencies and “below the line” shops such as sales promotion, direct marketing and PR. Over time, specialists in diversity advertising, shopper marketing and digital media have come into vogue. Highly focused agencies continue to emerge today, as witnessed by the arrival of Amazon “specialist agencies” that assist marketers seeking to do business with or sell goods online via Amazon. Along the way, specialization led to fragmentation and full-service agencies fell by the wayside. Marketers in turn saw their agency networks expand in size as they added specialist firms to their rosters creating a range of agency stewardship and coordination challenges.

Secondly, the holding companies continued to acquire marketing services and advertising agencies. Part of their acquisition strategy involved bringing on specialist firms across a range of competencies to fill out their service offering. Another part of their strategy involved the acquisition of branded agency networks to consolidate activity within select clients (e.g. WPP’s acquisition of Ford agencies J. Walter Thompson, Ogilvy & Mather and Young & Rubicam) and to create walled silos that would allow them to handle competitive advertising accounts. Financial benefits were realized by consolidating functions and paring expenses in areas such as human resources, legal and finance while allowing the acquired agencies to operate independently in virtually every other area.

Finally, along the way the holding companies began to compete as agencies, creating stand-alone client service entities such as; Enfatico (Dell), Team One (Toyota), GTB (Ford) and We Are Unlimited (McDonald’s). The value proposition with these dedicated agency teams was to provide larger advertisers with scalable, seamless solutions served up by the most talented personnel from across the holding company’s portfolio of agency brands. While the premise was certainly compelling, the holding company model did not readily lend itself to a blended workforce concept and often suffered from the lack of centralized business platforms.

Fast forward to 2019 and advertiser preferences remain unchanged. Advertisers desire breakthrough, transformational business solutions served up on an integrated basis and of course, they want them faster, better and cheaper.

In their search for a better “mousetrap” advertisers have begun to take certain aspects of their advertising in-house and or have engaged non-traditional partners including management and technology consulting firms to augment their traditional agency rosters. Of note, the consulting firms, represented by global monolithic brands, blended workforces, common processes and centralized business platforms have made significant inroads with CMOs. This has raised speculation among many industry pundits with regard to whether or not the consulting firms would supplant advertising agencies. Fueling the speculation has been the management consulting firms’ pursuit of agency acquisitions to round out their marketing/ advertising service offerings, it will be interesting to see how well they fair integrating those acquired firms into their organizations both structurally and culturally.

Many in the industry are waiting for the revelation of a new “agency model” that will emerge to magically address advertiser desires and resolve agency holding company challenges. It is our belief that these pundits will likely be waiting for some time.

Advertisers, for their part, will continue to seek out and retain responsive, agile marketing partners that can provide breakthrough, scalable business enhancing solutions. While the idea of an integrated, end-to-end provider is intriguing, it is likely not feasible. Rather, assembling a team of specialists, albeit narrower marketing agency networks, with the advertiser serving as strategist and integrator across the “marketing ecosystem” as Martin Sorrell, Chairman of S4 Capital refers to it is the most likely solution.

As for agency holding companies, we believe that Arthur Sadoun, Chairman of Publicis Groupe got it right when he stated that “the old holding company model is dead” in April of 2018. Advertisers will not embrace a one-stop solution from any of the holding companies. Thus, the holding companies will likely continue their recent focus on right-sizing their networks through the consolidation of both brands and functions and the divestiture of redundant and non-core entities. After all, how many agencies that place or distribute digital media or in-house studios does a holding company need? There may also be a subtle shift from a focus on cost reductions to enhancing the holding company’s ability to cost efficiently scale operations. This could include an expansion of the old “shared services” model, looking beyond HR, Finance and Legal to create centers of excellence around functions such as Data Sciences, Technology, Media Procurement and Production to provide clients across their network with faster, better and cheaper solutions in these areas.

While many lament the decline of the agency holding company, other than the world’s top advertisers, most organizations hire agency brands. While some of the agencies they hire may be owned by the same holding company, more often they are not. Thus the challenge of finding “integrated” solutions for the development of relevant, quick, agile and engaging solutions has been the purview of marketers… at least since the days when the full-service agency model was the standard. As such, the evolution of the advertising delivery model will more than likely be driven by advertisers and less so by agency holding companies.

 

 

 

2018 | Articles That Piqued Our Readers Interest

31 Dec

WTop 5ith 2018 now in our rearview mirror and all of our attention focused on the coming year, we thought that you might be interested in learning what our “Top 5” blog posts were over the past twelve months, according to our readers.

While familiar issues such as; trust, transparency and brand safety continued to be at the fore of advertisers’ attention, new topics including programmatic audio, AI-powered personalization and federal privacy regulation crept into our field of view. Click below to access 2018’s top posts.

  1. 3 Keys to Strengthening Client-Agency Relationships
  2. 4 Keys for Optimizing Direct Labor Based Remuneration Systems
  3. Agency Compensation: The More for Less Trap
  4. Advertisers: What Does the DOJ Know About the Ad Industry That You Don’t?
  5. Will Programmatic Ever Address Advertiser Concerns?

One Hundred Years Later. Has Anything Really Changed?

27 Dec

Sears Catalog CoverWe’re all familiar with the old adage: “The more things change, the more they remain the same.” Strange as that may sound, the notion behind this saying is simple. No matter how complex a situation may appear, nor the rate or nature of changes that we may be dealing with, there tends to be an underlying corollary that remains constant.

To test this hypothesis, I spent some time browsing through the archives of Duke University’s John W. Hartman Center for Sales, Advertising & Marketing History to gain a perspective on what marketers were dealing with at the beginning of the twentieth-century. As importantly, I wanted to compare their reality with the environment in which we operate today.

Surely the fundamentals facing marketers had to have changed, I reasoned. There have simply been too many advancements and technological improvements for the aforementioned adage to hold true. However, a quick review of some key events then and now might suggest otherwise… you be the judge:

Then

  • 1915 – Millions of dollars are spent on advertising and public relations to stimulate consumer demand
  • 1915 –  Modern market research begins, resulting in ads being increasingly targeted to specific audiences
  • 1915 – The first transcontinental telephone line opens from NY to San Francisco
  • 1916 – Self-Service retailing is invented by the Piggly Wiggly chain of grocery stores
  • 1916 – U.S. automotive and truck production exceeds one million new units
  • 1918 – The New York Times begins home delivery
  • 1918 – Ad legend James Walter Thompson sells his namesake agency to Stanley B. Resor and partners
  • 1918 – The Federal Government takes control of the nation’s telephone and telegraph systems
  • 1921 – Badly hurt by the depression, Sears, Roebuck & Company Chairman Julius Rosenwald pledged $21 million of his own funds to bail the company out

Now

  • 2018 – Billions of dollars are spent on advertising and earned media to stimulate consumer demand
  • 2018 – AI aided market research and predictive analytics allow marketers to better chart the consumer journey
  • 2018 – Number of worldwide mobile phone users expected to pass 5.0 billion
  • 2018 – Amazon Go unveils revolutionary check-out free convenience stores
  • 2018 – U.S. Plug-in-Electric Vehicle sales estimated to eclipse 400,000 units
  • 2018 – The New York Times achieves 2 million digital only subscribers
  • 2018 – The J. Walter Thompson brand is merged with Wunderman to form Wunderman Thompson
  • 2018 – The Federal Communications Commission repeals net neutrality rules
  • 2018 – Sears files for bankruptcy, closing 140+ stores, Chairman Eddie Lampert submits $4.4 billion bid to buy the chain and stave off closure

While the size and scale of the issues that our industry was dealing with are certainly different, the fundamentals are actually more similar than not. Whether in the context of advancements in retail models or modes of media distribution to the impact of emerging product sectors and government regulation or even developments related to changes in agency ownership, there is a certain “sameness” to our industry… even after an eventful 100 years.

Hopefully we can find comfort in the aforementioned adage and confidence in the fact that our predecessors were able to successfully navigate the challenges which they faced to help create what has become one of the world’s most stimulating and dynamic business sectors, advertising and marketing.

As we reflect on the passing of another year and contemplate the challenges and opportunities that will present themselves to us in 2019 all of us at AARM would like to offer up an old Irish toast to each of you:

May the best day of your past be the worst day of your future. May your troubles be less and your blessings be more and nothing but happiness come through your door.

2 “Year-End” Practices That Will Boost Agency Performance

30 Nov

end-of-yearTo be sure, the end of the calendar year is a hectic time for advertisers and agencies. Tasks such as wrapping up ongoing initiatives, closing out jobs, addressing last-minute out-of-scope projects and readying for year-end financial reporting take on a sense of urgency and seem to consume more time than either party has available to invest.

Then, seemingly without warning (but never too soon) the holiday season is upon us and co-workers, suppliers and client-personnel scatter to the wind as companies close down for the holidays and individuals use up remaining comp time. This is followed by a “return to normalcy” the first week in January when we close-out any remaining prior year tasks and turn our attention to implementing the new year’s plans.

Sound familiar? Probably so.

Thus, it comes as no surprise to anyone that certain intended actions fall by the wayside as people adjust schedules for the December/January timeframe in order to balance hectic and often stressful workplace and personal schedules.

In our experience, there are two Client/Agency activities that often fall victim to this re-prioritization:

  1. Undertaking year-end agency financial reconciliations (i.e. time-of-staff, agency fees, expenses); and
  2. Conducting annual 360º agency evaluations.

On one hand, it is easy to understand how and why these activities get moved down the priority list, receive a lower-than-desired level of scrutiny or simply get passed over. On the other hand, these are incredibly valuable practices that yield a wealth of financial, process improvement and relationship management insights and opportunities, well in excess of the time and energy invested in their undertaking.

Sadly, missing these annual end-of-year activities once, significantly increases the odds of annualizing their omission from the standard operating procedures “playbook” moving forward. Further, human nature being what it is, people then begin to rationalize why it is appropriate never to reconcile and review. Perhaps Paul Harvey, the noted broadcaster, got it right when he quipped:

Ever since I made tomorrow my favorite day, Ive been uncomfortable looking back.”

From a practical perspective, our experience would fully support Mr. Harvey’s lack of comfort with “looking back,” particularly when clients and agencies forgo these important annual oversights and relationship management practices. Why? The lack of oversight can beget poor record keeping, which in an estimated billing system carries huge financial risks. Additionally, forgoing a 360º evaluation and the opportunity to discuss how to address open issues, correct performance shortcomings and leverage those things that are working well is not only costly, but can sow the seeds of discontent in the Client/Agency relationship, which is not healthy for either party.

Therefore, we believe that these two “year-end” practices should never be forgone or given short shrift. The most practical approach to prevent this is to create project work plans for these practices, complete with timetables and milestones, the assignment of task level responsibilities to specific individuals and locking-in calendar placeholders for progress updates and report-out meetings.

In the end, everyone benefits from the enhanced levels of transparency, solid two-way communications and ultimately, improved performance.

%d bloggers like this: