This year's ANA Financial Management conference was bigger and better than ever! Held at the Boca Hilton Resort in Boca Raton, Florida, over 550 enthusiastic marketing procurement, finance and agency attendees were treated to two and a half days of presentations and networking. Sopan Shah of Nestlé chaired the event and provided an excellent foil to the presentations in handling most of the Q&A sessions after each segment. His experience in managing one of the world's largest advertising budgets showed during each Q&A, and he was as classically "Swiss understated" as Nestlé are. Thanks also to our Business Director, Steven Wales, who as part of our co-sponsorship of the event opened the conference.
Of course I am sure that each attendee had their favorite sessions and the points below were ones that, with our focus on marketing agency management, were of specific interest to me or stimulated conversation during the breaks. I will look to add to these in subsequent posts as the amount of content delivered at the conference was enormous.
Accountable compensation
Jockey and their agency TPM delivered a well prepared and thought provoking discussion on their journey down the road of what they term "accountable compensation". This program features a "zero profit" methodology which holds back profit until the previously and mutually agreed end-of year measures of performance have been achieved. Although not revolutionary in that it uses the standard incentive compensation methodology of balancing business objectives, brand objectives and client/agency performance evaluation results to calculate the agency profit / bonus, Jockey and their agency have partnered to develop an almost unique program which compels both the marketing team and the agency to achieve success in order to secure an appropriate financial return. The program is relatively new and is sure to be watched closely by marketers and agencies alike.
Agency Objections?
Interestingly, in listening to subsequent conversation with attendess from other agencies, there was vociferous objection to the idea of holding back 100% of agency profits until the end of the year. The increased pressure to manage cash flow in this model was seen as unfair. Interestingly, the Coca-Company who perhaps lead the market in terms of agency compensation models, seem to have balanced this aspect in a more equitable manner by increasing the frequency of payments to the agency to assist in managing their cash flow requirements.
The rise and rise of Scope of Work
If there was one reoccurring theme that emerged during the conference, it was the rise in importance of a tightly defined Scope of Work. Jockey and TPN, for example hammered hard on this theme recommending that SOW management needs to clarify the nature and complexity of the work to be undertaken and how the agency should staff to achieve these goals. It would seem that the fee-based model that now underpins the base compensation for most client-agency relationships mandates a more tightly defined SoW. Interestingly though Jockey and TPN revealed that this does not impinge on the flexibility of the marketer and agency to easily swap work in and out during the year, as long as the total budget is not affected and the work is of roughly the same complexity. This parallels our experience where we see clients wanting clarity upfront on how the proposed budget will be spent, but not wanting to overburden marketers with constant revisions to the SoW during the year, as long as the top line budget is not affected and the changes don't do not cause "scope creep". Where the total budget does change, the scope does need to be amended of course and this requires a system to easily allow versioning of scopes and many marketers lack this functionality in their current tool set.
Welcoming the Junior Partner
Probably the most anticipated speaker was chairman of the WPP holding company, Sir Martin Sorrell. A consummate business person with a famosly formidable intellect, he was also possibly the most entertaining speaker I have heard at an ANA event, in a classically British style. He gave us a real insight into the world of the holding company, and his referenece to the positioing statement "a partner, but a junior partner" gave a focal point for later discussions. Perhaps too often we hear the term partner being bandied around, when everyone knows that the client-service provider dynamic is an asymmetrical relationship. His positioning was perhaps far more realistic but at the same time does elevate the agency to being significantly more than a supplier.
Talent, talent, talent!
Sir Martin also emphasized that his role is fundamentally to "develop and deploy talent". This nails the point that great strategy and creative can only come from great talent. Given Sir Martin informed us that he comes from a financial, not marketing, background, this gives everyone hope that procurement/finance can assist marketing in getting the most appropriate talent on each part of the business (at the optimal cost), with the aligned goal of building a stronger brand.
The ultimate bean counter?
Finally my favorite line of the conference (and apologies to Sir Martin if this is a slight paraphrase) "if you want to insult me, call me just a bean counter...then again if I am going to count beans I would rather count more of them". With group revenues of $18 billion I would like to nominate Sir Martin as the bean counter that bean counters all over the world can aspire to emulate!
Thanks to the ANA
As ever we cannot thank enough the ANA for their seamless conference management skills. Their team are the unsung heroes of the event and we at Decideware would like to extend a HUGE round of applause for this years event!!!
Author: Richard Benyon (Decideware)
Thu, April 11, 2013 
