Scope of Work
'L’Oréal UK & Ireland managing director Jeremy Schwartz said the plan was designed to make the company’s marketers ‘more commercially adept and have a more rounded experience’.
‘You can progress up the organisation when you understand how it works,’ he added.
'Schwartz, who has worked as a marketer at Sainsbury’s, Coca-Cola and News International, said he aimed to phase the scheme in as an obligatory measure across L’Oréal.
Marketing added that 'Sainsbury’s has a similar scheme to the one planned for L’Oréal, which sees staff who are identified as future leaders moved out of marketing'.
'Career marketer Sarah Ellis was moved to the supermarket’s corporate affairs depart-ment under the scheme, and is currently its head of PR'.
'Ellis told the ISBA conference the experience had been ‘phenomenally helpful’, adding: ‘Sometimes it is good to turn your back on the marketing department, even if you know that’s where your career ultimately belongs.’
Source: Marketing, 19 March 2013
Author: Steven Wales (Business Director)
In an excellent article in M&M Global, Steve Lightfoot (senior manager, global marketing procurement, WFA) debunks some of the negative myths around marketing procurement - specifically research into 5 key areas that drive value.
With the high velocity of growth in this area, and the fact that leading advertisers are investing in quality staff and training, it is little surprise that over the last 5 years we have seen such fundamental change in how marketing procurement thinks and acts.
Our experience in working alongside these marketing procurement professionals, is that is now a much better understanding of exactly what is needed to enhance the relationship between marketers and their agencies. Of course that does not mean that they will always be popular with both agencies and marketers, but in many cases they have to make hard decisions around value, balancing both cost and revenue outcomes.
Below are the 5 myths that Steve discusses and we strongly recommend accessing the article in full to review the research findings.
Author: Richard Benyon (Decideware)
This month’s issue explains why finding the right agency is about more than who has the best creative. Highlights include:
To begin enjoying this issue, simply click on the cover. You can also download the ANA Magazine Thought Leadership App, available at the Apple App Store, the Android Marketplace, and on the Kindle Fire.
There are many parallels between an agency evaluation program and an HR employee evaluation program.
In a recent webinar to promote the ANA's new Insight Brief “Building an Agency Performance Management Program” Richard Benyon of Decideware, interviewed Dr Ken Lloyd to get his perspective on performance evaluation.
Ken is the well known author of the highly successful “Performance Appraisals & Phrases for Dummies” and a recognized expert in the field of performance management.
This is an extract from that wedinar:
Richard: Let me start by asking you Ken, why should we do formal evaluations? We are often asked if we see a measurable ROI from performance assessments.
Ken: Without a formal evaluation program, it is very easy for an agency to believe that it is doing outstanding work, while the facts may tell an entirely different story.
Casual conversations can provide some useful feedback to an agency, but in such an informal context the agency is likely to hear only what it wants to hear, and the result is that ongoing problems will continue.
For a client to obtain maximum creativity, productivity, and effectiveness from an agency, the client should formally and factually advise the agency of the areas in which the agency is meeting or exceeding expectations, and as well as the areas in which it is falling short.
With a formal evaluation process in place, both agency and client will not only understand the specific areas in which improvements are needed, but they will also be able to establish an action plan that spells out every step of the improvement process.
The ANA's new Insight Brief "Building an Agency Performance Management Program" contains further information.
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.
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.
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.
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.
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.
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.
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!
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)
We would like to thank Gartner Group for including Decideware in its latest "Cool Vendor in Marketing, 2012" report published April 3rd.
This is the second Gartner Cool Vendor report Decideware to feature Decideware - previously we were named as a "Cool Vendor in Procurement and Finance". This new report highlights the work we are doing to help large advertisers make substantial improvements to their marketing procurement discipline to attain spend and process efficiencies.
Kimberly Collins, a leading analyst in the marketing arena, summarized her findings in an insightful phrase "Decideware helps CMOs make investment decisions".
She sees our work in the context of growing recognition by senior marketers of the importance of optimizing marketing value and the need to invest in that objective, "Decideware provides a next-generation MRM capability that helps CMOs and their advertising functions better manage their agencies and measure agency performance".
Managing the spend with marketing agencies is well known for its unique challenges, which have not perhaps been well addressed by technology vendors until now, as supported by this quote:
"However, MRM solutions do not support the level of agency management, performance assessment and skills alignment that is the hallmark of Decideware's solution."
Finally Gartner make this recommendation: "CMOs and marketing leaders with large advertising budgets and extensive agency relationships and dependencies should consider Decideware for its agency management solutions."
Author: Richard Benyon (Decideware)
Decideware is proud to be assisting the ANA to deliver the webinar Improve Your Scope of Work Program, on Wednesday 28th March 3pm Eastern - as part of a procurement series targeting their membership.
The ANA states, "In this webinar, Diane Gibbons, Director, Agency Management Global Procurement and Operations - Pfizer, Inc. and Richard Benyon, CEO - Decideware Inc will explain how marketing procurement / agency management professionals can design and implement best-practice scope of work techniques to achieve great results. Diane and Richard will help participants understand how to combine process and systems to achieve a pragmatic Scope of Work program that allows marketers to clearly articulate what they are looking for, delivers agencies greater transparency to help develop their resourcing estimates, and provides procurement / finance with a clear picture of the cost and value drivers that underpin the client / agency financial relationship."
Details of the program can be found, here:
More Gain Less Strain, Optimizing Marketing Partner Performance and Value in a Digital World is a recent report produced by the CMO Council resulting from research conducted in late 2011 including qualitative interviews and qualitative surveys with 250+ marketing leaders.
The report sheds light on those issues most concerning CMOs and includes insightful thoughts from leaders in the field and a strong indicates that the marketing shift to digital, social, and mobile channels is significantly impacting agency relationships, compensation models, and use of marketing technology and measurement systems.
In particular, the factors contributing the most to stress and strain in client/agency relationships were identified, as:
Examples of the quotes, include these:
“I think the most successful client / agency relationships are based on clear objectives, collaboration, open communications, and mutual respect. I think that in many cases, clients have a tendency to change agencies as a solution to their business challenges, but it can be much more effective to work to get
the most out of current agency partners.”
John Costello, Chief Global Customer and Marketing Officer
“The advertising industry and the connection with consumers are continuing to evolve. It’s important to evolve your relationship with your agencies, as well as the services that they provide. From an external
environment standpoint, a lot of that continues to push the evolution of the agency and the
Steven Schiller, Senior Vice President, Global
Sweets & Refreshment SBU
The Hershey Company
Note, advertisers wrestling with that most common issue, ie "a lack of an agreed-upon set of analytics and metrics that defines success and failure" should contact us on E: firstname.lastname@example.org for advice on how to design and implement a first-class agency evaluation program.