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As part of the Scope of Work survey, the WFA & Decideware explored the Scope of Work process, as well as overall participation.  We also wanted to look at the role Marketing Procurement's involvement in this area.  Below are the results as well as commentary from the WFA regarding the findings:

Scope of Work Process & Participation

Who owns the SOW management process?

WFA Commentary

    • Responses point to a split in the approach taken by members.
    • Although 50% rely on marketing to manage the SOW workflow, as many as a third leave this to marketing procurement.
    • Over time we will see how this evolves, but for now we can see that ownership of this process has no clear trend.

The World Federation of Advertisers, in conjunction with Decideware, conducted a survey to provide a better understanding of how major advertisers manage their scope of work programs.

The survey was conducted as a partnership between the WFA and Decideware in early summer 2014. Nineteen companies took part in this global research with responses coming mainly from marketing sourcing specialists. While results are not statistically relevant, they are indicative of the thoughts and actions of global multinationals within WFA membership.

In an eight part series, we will overview the results of the survey as well as concluding commentary from peer WFA members.

WFA Executive Summary

The World Federation of Advertisers created an overview of the survey and concluded:

All respondents feel that there is a skills gap in terms of SOW management.

  • Over 60% of respondents do not have fully standardized SOW templates.
  • Around 1 in 3 respondents do not reconcile approved Scope budget with actual agency fees.
  • 30% of respondents let their agency begin working as soon as a scope is signed off.
  • The most common way to reduce the costs of a SOW is by simplification, finding alternative creative ideas, or by commissioning fewer executions etc.
  • Top recommendation from members is to align with marketing on a single SOW template for all agencies.

Applying Scope of Work to Deliver Value

Decideware 's paper Beyond Costs and Rates - a practical guide to understanding value, discusses the cutting edge of Marketing Agency Management - i.e. measuring Agency Cost, Resource Planning and Agency Performance data to determine Agency Value.

This release in Decideware's "Innovation Series" looks at the important issue of using Scope of Work to manage agency value, and how to understand if you are getting the most from your agency spend.

Last week I had the pleasure of participating in an  ANA procurement series webinar in conjunction with Stuart Sueltman, Assoc. Director – Agencies, J&J Consumer Companies and Yoandra Mordan, Manager - Global Marketing Group, J&J Global Corporate Affairs.
Stuart and Yoandra were involved in the J&J implementation of the Decideware agency lifecycle platform, looking after the scope of work and evaluation components respectively. The webinar focused on what was needed to deliver programs in one of the largest advertising organizations world, addressing both both process and people issues.

Fee-Based Compensation Dominates

In a recent survey by the Association of National Advertisers "2013 ANA Trends in Agency Compensation, 16th Edition" one of the key trends is the inexorable rise in compensation agreements to use labor-based or fixed fees as the primary basis for agency compensation.

This year 81% of all client-agency agreements are fee-based, up from 75% in 2010.

This is even more pronounced in larger advertisers (spend > $500 Million) where a full 94% use fee-based compensation as their primary model. 

This June 2011 issue contains two articles: 

"Beyond Cost and Rates: A Practical Guide to Understanding the Value of Agency Relationship" by Steven Wales, which overviews the value of agency relationship and looking beyond the traditional theory of cutting costs. The article explores the "value equation" which views the overall worth of each individual agency relationship. 

In "Driving Performance: Key Insights on How to Maximize an Agency Evaluation Program", Richard Benyon interviews Ken Lloyd, author ofPerformance Appraisals and Phrases for Dummies for his perspective on agency evaluation programs and how to maximize the evaluation process.