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Decideware’s Agency Management Big 10 - June 2017

Below are the June articles of interest from key trade publications, with excerpts highlighting key take-aways. This month's selection includes articles on the consultative nature of agencies, Unilever's 'less is more' approach to Marketing, as well as the lessons Marketers can learn from the departure of Coca-Cola's CMO.  We hope that you find this month's selections informative and valuable.

1. Why On-Site Agencies Are Catching on With Clients

Up until a year ago, the News U.K. was working with five agencies across three newspaper brands – The Times, The Sunday Times and The Sun. The arrangement was taking up time and resources that the fast-paced publisher couldn't spare.

The Rupert Murdoch-owned papers hit upon a solution last May: centralize the marketing teams. With Pulse Creative, the publisher established a cross-discipline agency made up of a team of 70 people from WPP shops including CHI & Partners, Wunderman and Mindshare, but located on-site. The agency, led by CHI, also works with News U.K.'s betting, gaming and commercial businesses.  

2. Rise of the Machines: Agencies Need to be Consultative, Not a Commodity, to Succeed

According to those who helped us to compile this new joint Hall & Partners and TBWA study, marketing’s future will be both made easier and more complex by the rise of the machines.

A leading CMO in Asia says that marketers will “be outsourcing to agencies who understand the breadth of technology, media and creativity.” For instance, he adds: “More effort will need to be invested in real-time marketing and so marketers will need to be able to think more on their feet. That means agencies and creative marketers will need to become much more practical, and take ego out of the process.”

3. Hybrid Agency Staffing Allows Brands to Have it Both Ways

As the ad world adjusts to a new era of project-based work, as many as two-thirds of marketers that normally work with agencies report that they would like to bring that work in house, according to research by Gartner. This puts agencies at a crossroads, and brand marketers, whether or not they realize it yet, in a very challenging position.

4. Ignorance of Pricing is Ruining Ad Agencies

Let's keep it simple.  Creative agencies do not sell Big Ideas, creativity, Cannes award-wins or brand building any more than General Motors sells transportation, Apple sells communications or Bain sells analytics.  Creative agencies sell ads, or more broadly, content in the form of deliverables. Bundled with the deliverables are strategic insights, of course, just as iPhones are bundled with high value functionalities.  Agencies are in the deliverables business.  The business is expected to deliver results.  Prices should be high enough to reflect anticipated results.  The number of deliverables is high and growing.  Price is income divided by deliverables.  Price per deliverable (with deliverables normalized by size) is the relevant pricing metric.

5. Has Anything Changed Since ANA's Report on Media Transparency? Why, Yes!

Digital News Daily Editor Tobi Elkin wrote an article earlier this week asking if anything has changed in the marketing/ad world since the release of the Association of National Advertisers (ANA)'s Media Transparency Report about a year ago.

Digital marketing is no longer the perceived silver bullet. There’s a new sheriff in town: contractual terms and conditions. Agency holding companies are feeling the financial pain.

6. Unilever bets on 'Less is More' Approach to Marketing marketing/1436517#6RLTJh3rRuOLP46T.99

The move to use fewer agencies does not mean a decline in media spend, its top marketer tells Gideon Spanier. Unilever is at the start of a bold experiment. The world’s second-biggest advertiser with an €8bn annual budget is cutting half of the 3,000 agencies that it uses around the world and making 30% fewer ads and marketing assets.

The efficiency drive is about producing fewer ads because Unilever hasn’t been sweating them hard enough – or wearing them out, as Weed puts it. This is not about investing less on media to distribute those ads, it’s about showing a smaller number of ads for longer, he says.

7. Publicis Groupe Forbids All of its Agencies from Participating in Awards Shows in 2018

Publicis Groupe will be sitting out the 2018 Cannes Lions festival. The reason? To save money.

New chief executive officer Arthur Sadoun made his first dramatic mark on the holding company this week by forbidding all of its agencies around the world from participating in awards shows, trade shows or other paid promotional efforts for more than a year.

8. 3 Ways Agencies are Delivering Transparency to Advertising

In recent years, marketers have made it clear that they need greater transparency in their digital advertising. Concerns about ad fraud and viewability, measurement and a more data-centric mindset have all contributed to the new assertiveness among marketers. A study from the World Federation of Advertisers (WFA) found that 90 percent of advertisers are reviewing contracts and demanding greater accountability.

9. BBDA, Droga5, WPP Take Top Honors on Final Night of the Cannes Lions

During the final night of the Cannes Lions International Festival of Creativity, top company honors went to BBDO, Droga5, WPP and production company MJZ.

Clemenger BBDO Melbourne, the agency behind the Grand Prix-honored "Meet Graham," nabbed the Agency of the Year honor, followed by fellow network shop AlmapBBDO, Sao Paulo in second and then McCann New York in third.

10. Five Lessons for All Marketers from the Departure of Coke's CMO

Coca-Cola has decided to eliminate the position of CMO in its organization. Former CMO Marcos de Quinto is off to retirement after nearly four decades with the company; instead of replacing him, Coke has created a chief growth officer role to lead both its customer and its commercial teams.

Although Coke hasn't explicitly blamed its former CMO for falling revenues (global sales fell from $48 billion in 2012 to $44.3 billion in 2016), we can surmise that the management shakeup was in part driven by declining revenues.