The West Coast chapter of the ANA's joint Production and Advertising Financial Management...
Managing scopes and production costs: What are the parallels?
At the upcoming ANA Joint Production Management and Advertising Financial Management, West Coast Chapter meeting on Feb. 25, 2016, Steven Wales will lead a discussion on the parallels between managing scopes of work and production budgets. Participants will be engaged in a discussion about their steps to standardize global data, centralize it and apply analytics to get the most from agency scopes and production budgets.
Through this interactive conversation, we will learn about the similarities of managing scopes and production budgets and how both can contribute to better outcomes and a healthier bottom line.
Scope of work challenges
Decideware currently manages over $2 billion in approved scopes of work for top global advertisers. From our client engagements, we have learned that using sophisticated software platforms to centralize spending data can transform scope of work strategies, allowing advertisers to get more bang for their buck and ensure a cohesive multichannel strategy. We think these same approaches can be used in managing production costs to curb errant spending and maximize your resources.
However, many advertisers don't have an effective system in place to manage scopes, which leads to approval delays, miscommunication and lack of visibility. As we discovered in our 2014 Scope of Work survey, performed in conjunction with World Federation of Advertisers, many top advertisers could iimprove their processes for financial gain.
Interestingly, across the board, respondents believed there was a skills gap when it came to scope of work. Perhaps they could benefit with access to experts. The survey also found only 60 percent of advertisers have fully standardized templates for SOW. At the same time, 68 percent of organizations don't have a centralized database for current and historical scope of work. Without standardization between agencies or a central resource for data, it's near-impossible to collect and analyze data across these partners to optimize spending.
The survey revealed that many scope of work management programs demonstrate room for improvement. Our suspicion is that the same is true for most advertisers and production management as well.
Production management parallels
How is creating marketing deliverables and ensuring a proper balance of channels across an agency roster similar to commercial production? For one thing, both contain a large number of variables, and as always, advertisers need to carefully balance quality and cost in their decision-making. It's never as simple as reducing the budget because this might result in less effective campaigns.
"Are there parallels between scope of work and production budgeting management?"
As prices for ad production continue to climb and production becomes more complex, advertisers will look for ways to gain more visibility into their processes and optimize costs where they can. However, doing so will likely require advertisers to move beyond spreadsheets and implement more sophisticated means of data collection and analysis.
Until advertisers can see exactly where their dollars are going, it will be tough to curb escalating budgets. On the other hand, with the right tools and approach, advertisers can see which production elements are eating up more resources and make strategic replacements to cut costs without offsetting the quality of the commercial.
Is there a parallel between scope of work and production budgeting management? Can discussing these similarities enable advertisers to improve at production budgeting? We are looking forward to talking with participants and learning some of the answers to these questions and more at the committee meeting.