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Decideware’s Agency Management  Big 9 - Nov 2017

Below are the November articles of interest from key trade publications, with excerpts highlighting key take-aways. This month's selection includes articles on "chief growth officer" roles, TV dominating ad spend, as well as how much ad agencies ideas are worth.  We hope that you find this month's selections informative and valuable.

1.Chief marketing officers will have to ‘grow or go’ as Fortune 100 companies switch to ‘chief growth officer’ roles

When Coca-Cola consolidated marketing into a new "chief growth officer" (CGO) role in March, it followed previous Fortune 100 companies in doing so — Hershey's announced Mary Beth West had joined as CGO earlier that month, while Kellogg gave the same job title to Clive Sirkin in 2015.

According to consultancy Forrester, this is a trend that will continue next year. "In 2018, we expect CMOs to fall under even more pressure to drive growth — or step aside while someone else takes the reins," its "Predictions 2018" report states.

2. TV Still Dominates Global Marketers' Ad Spend

High-budget advertising campaigns continue to focus on TV, despite the rise of digital media, according to a recent report.

Surveying more than 600 case studies, London-based WARC, the global-oriented advertising research company (World Advertising Research Center), says successful high-budget campaigns -- those that spend $10 million or more -- place 66% of their media spend into TV.

Lower-budget ad campaigns -- up to $500,000 -- allocate 8% of their money on TV. Mid-budget campaigns -- $500,000 to $10 million -- spend between 25% and 60%.

3. It's Time to Bury "The Line"

The “line.” Marketers and their agencies have referred to the nebulous “line” for decades when referring to different types of spending. Some in the business define traditional advertising as “above the line” and other disciplines such as point of sale and direct marketing “below the line.” Others differentiate based on scope (mass vs. niche focused) or purpose (long term awareness vs. short term incentive). But given the complexity and integration of marketing support, the lines are quickly blurring. It’s time to bury the line and use a new approach.

4. Cannes Lions Gets a Major Overhaul, and Publicis Says It Will Return in 2019

Under pressure from advertising holding companies who have come to see it as too expensive, Cannes Lions owner Ascential unveiled a sweeping revamp of its flagship festival today, introducing dozens of changes aimed at simplifying and modernizing the event as well as, critically, keeping costs down for attendees.

In an immediate response, Publicis Groupe, which is skipping the 2018 festival and spending that money on developing an internal AI platform, applauded the changes (which it worked on directly with Ascential) and announced it will be returning to Cannes in 2019.

5. How Much Are Agencies' Ideas Worth?

Last year, a multinational transportation business slashed the fees and services of its global creative agency because the company faced financial pressures, according to a C-suite executive with knowledge of the matter. Fast-forward to this year: The multinational realized it was no longer receiving the proactive thinking it had grown accustomed to because the agency was so thin-staffed and underpaid. In the annual review, the client determined it had cut the fee too much and increased it to get more value and strengthen the relationship.

6. Deutsche Telekom Pulls Back Curtain On 'Radical' New Media Approach

German telecommunications giant Deutsche Telekom is rolling out a new media operating model in Europe that takes the strategy portion in-house and farms out other media tasks to different agencies, calling it a "radical redefinition" of its media management approach. But it says it won't have any implications on how subsidiary T-Mobile U.S. handles its own media.

The company has broken up its media processes into five "Lots": media strategy and steering; media analytics services; campaign planning and buying services; programmatic buying operation services; and search advertising and affiliate marketing services.

7.WPP stalls supplier payments ‘to boost year-end results’

WPP has been accused of putting the squeeze on key suppliers, including freelancers, following reports that hundreds of UK staff have been instructed to delay payments in an effort to make its year-end results look healthier.

According to a report in City AM, staff at data and insight division Kantar this week received an email telling them to wait until next year before paying outstanding invoices.

8.'Time and Money': What DDB'S Keith Reinhard Has Learned About How Agencies Are Paid

DDB introduced a compensation model in 1990 called "Total Creativity. Guaranteed Results," which Keith Reinhard, worldwide chairman emeritus of the Omnicom agency, says "got a lot of good press but few takers."

Reinhard says Ad Age's recent "How Much Are Agencies' Ideas Worth?" feature made him think about the agency's model and what the shop has learned over the years, including the fact that "it was wrong to use the word guarantee."

9.Missed opportunities in purposeful transformation

By helping brands communicate purpose, agencies gain advantage, says Mirum's marketing and brand strategist.

For agencies, understanding a client’s brand purpose might be the best path for entering the consultancy space and bidding on transformational work. Approaching company transformation from the familiar territory of brand marketing differentiates agencies’ approach from that of traditional consultancies.


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