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Tag Archives: advertisers

Are We Missing the Real Issue with Ad Blockers?

26 Oct

blocker

 

The advertising industry is rightly concerned about the financial impact related to consumers growing use of ad blockers, which can filter out ads before users ever see them. A recent study by OnAudience.com highlights the reasons why:

  • 26% of U.S. consumers now use ad blockers, resulting in lost publisher revenues of $15.8 billion in 2016, up from $11.0 billion in 2015. The U.S. represents approximately $45 billion of the $100 billion global display market.
  • Internationally, the loss of publisher revenue from ad blocking is projected to rise to $42 billion, up from $28 billion in 2016.

In addition, Google has announced that the 2018 version of its Chrome web browser will allow consumers to automatically block “annoying, intrusive” ads, which will accelerate the financial impact of this trend given that Chrome represents approximately 60% of the desktop/mobile/tablet browser market (source: NETMARKETSHARE, September 2017). Google’s motivation, it claims, is that they are simply introducing the Coalition for Better Ads recently announced best practices standards to enhance the consumer’s web browsing experience.

It is no surprise how we got where we are. Advertisers wanted to improve consumer engagement and publishers wanted to drive revenues. This, in turn, led to publishers placing more ads on a web page, including higher paying video units, making ads larger or forcing visitors to somehow interact with these ads to get to the content. This involves video ads that automatically refresh or blast audio automatically or force consumers to wait for :05 to :10 seconds before they can access the content they seek.

In the end, advertisers and publishers have not realized greater levels of engagement, but rather helped to fuel greater levels of consumer irritation and therefore ad blocker usage.

Thus far, the industry has been focused on blocking the ad blockers. It is true that many publishers believe that being exposed to ads is a user’s obligation if they want their content to be free. Others, however, share the consumer’s disdain for obnoxious, intrusive ads, and would like to see them banned from their sites. The problem is that ad blockers tend to block all ads.

So what is the ad industry to do? Busting the use of ad blockers or implementing web browser workarounds would appear to be somewhat short-sighted. Consumers have clearly signaled that they find the level, number, positioning and type of online ads served to them on a regular basis to be discordant with their intended browsing habits. Pursuing a more measured approach on the part of the industry is warranted. As Supreme Court Justice Ruth Bader Ginsburg intoned:

“Reacting in anger or annoyance will not advance one’s ability to persuade.”

The challenge is clear, finding a mechanism for publishers to fund their content creation at least in part through the use of online advertising. The answer, however, is not so readily apparent.

Let’s face it, by in large, consumers do not want to view online advertising. This can be evidenced by plummeting open and click-through rates, reductions in conversion rates and declines in average viewing times. Advertisers and publishers want “engagement” and sadly, consumers want nothing to do with most of the advertising foisted on them.

Is the answer better creative that informs, educates and entertains in the hope that users will both notice the ads and choose to interact with them? Or is it fewer, less intrusive ads that can take away from a user’s web browsing experience? Or will publishers finally have to solve the “pay to view” content dilemma, which consumers have largely been resistant to thus far?

If consumer engagement is the goal, the answer is likely “Yes” to all of the above.

 

Has Programmatic Been Poisoned Beyond Repair

05 Oct

gsk decision ignites firestormWhen it comes to programmatic digital the rush to employ new technology, without proper vetting or oversight combined with the number of layers between the advertiser and the content provider (i.e. agency, trading desk, DSP, exchange,SSP, publisher) was a recipe for disaster. Toss in a healthy dose of greed and the potential of programmatic was compromised from the onset.

Excellent piece from Tim Burrowes at Mumbrella on the fallout from Martin Cass’ panel discussion at Ad Week in NYC and professor Mark Ritson’s perspective on the future of programmatic  Read More

Advertisers: Buying Guidelines Matter

25 Jan

complianceAdvertisers and their media agency partners spend countless hours, invest significant energy and apply a wealth of creativity in crafting their initial media plans and updating those plans to address internal issues, marketplace opportunities and or competitor moves over the course of a budget year.

The question is: “Do advertisers and their media agency partners spend enough time ensuring that those plans are actually executed to their fullest during the investment phase of the media buying cycle?”

In our experience, the direct answer is “No.” The hand-off from media planning to media buying and the accompanying media process controls, forms and reporting are often inadequate as is the level of oversight applied on a post plan approval basis.

Advertisers, if you’re wondering whether or not this is the case with your organization, it may be worth reviewing the following processes, forms and reports for their thoroughness and the extent to which they are reviewed and monitored over the course of a media campaign:

  • Buying Guidelines – When was the last time you reviewed your organization’s buying guidelines? Did you approve them? Are they current? Are they comprehensive enough to safeguard your interests and optimize your message reach? Have they been created for each media channel purchased or for TV only? How are these guidelines communicated to media sellers? Does your agency monitor and or report on buying guideline adherence? What are the consequences to the agency and or the media sellers if these guidelines are not complied with? Too often we find that this important communication bridge between media planning and media buying has not been satisfactorily completed or is so lacking in detail and or coverage across media that it is ineffectual. This is a critical mistake. Buying guidelines represent the explicit instructions from the agency planning team to their associates in buying and ultimately to the media sellers for how the client-approved plan is to be executed, stewarded and its performance assessed. Shortfalls in this area negatively impact media delivery and marketing ROI in a very direct manner.
  • Request for Proposals (RFPs) – Whether sent manually or digitally by the agency to media sellers, this process is often fraught with shortcomings. These include insufficient time afforded publishers to effectively respond to the RFP requests; and not enough information provided on the advertiser and or their specific goals to facilitate the publisher to tailor their proposal to the advertiser’s needs. From an advertiser’s perspective, often times these documents fail to ask for feedback on important issues such as whether or not digital publishers employ third-party vendors for website traffic sourcing. In other instances, RFPs fail to communicate critical performance standards such as viewability standards for digital media or in establishing the advertiser’s position on whether or not they will pay for non-human or fraudulent traffic. It would be a worthwhile practice for Advertisers to periodically review the level of detail contained in their media agency’s RFP templates and review completed RFPs to understand the basis for why certain RFPs were accepted or acted upon and others rejected.
  • Insertion Orders & Buy Confirmation Letters – The primary focus with these important control documents is to establish the specific tenets of the deal (i.e. audience delivery, performance guidelines, basis for evaluating performance, make good policies, etc.). Unfortunately, in our media agency compliance audit practice, we regularly discover incomplete documentation in this area that fails to establish enforceable delivery thresholds or basic qualitative standards to safeguard an advertiser’s media investment. In this era of “Big Data,” it is important for agencies to assert their clients’ data access and ownership rights. This relates generally to the audience modeling and transactional data generated as part of their media investment, and in the case of programmatic media buys, specifically to items such as winning bid log files and the associated meta data from all suppliers, including DSPs. Ensuring these types of data access and ownership rights are essential for advertisers if they want to have a clear line-of-sight into impression level pricing prior to the addition of the myriad number of fees and mark-ups charged by third-party suppliers. These documents also present an excellent opportunity for agencies to reinforce the agreed upon advertiser data protection guidelines such as how an advertiser’s data will be siloed, how long it will be stored and the extent to which the suppliers will limit other advertisers and third-parties access to such data.
  • Post-Buy Performance Reporting – There are three primary concerns in this area, aside from whether or not performance reporting is even being conducted. First, how are media buys monitored and stewarded while underway? What is the agency doing to monitor campaign delivery and to optimize performance in-flight? Second, is the agency monitoring performance across all media? More often than not we find agencies conducting television post-buys or digital media performance analysis, but totally ignoring other media elements altogether. Third, are the post-performance reports provided in a timely manner and include the level of detail necessary to hold media sellers accountable and provide meaningful insights that shape future media plans and buys?

Without a solid media stewardship process that incorporates sound control documents, continuous monitoring and comprehensive post-performance analysis, even the most thoughtful and compelling media plans will fall short of their potential. Advertisers could well benefit from conducting periodic reviews of their media agencies approach and performance during this phase of the media investment cycle. In the words of W.B. Sebald, twentieth-century German academic and author:

“Tiny details imperceptible to us decide everything!”

Interested in learning more about the role of media buying guidelines and controls in safeguarding your media investment? Contact Cliff Campeau, Principal at AARM | Advertising Audit & Risk Management at ccampeau@aarmusa.com for your complimentary consultation on this topic.

 

For Advertisers Concerned About Transparency, There is an Immediate Solution

04 Nov

transparency concernsLet’s face it the advertising industry is a complex, fast-moving and ever evolving marketing eco-system which at times can mystify even its most experienced participants.  The expansion in both the number and types of media channels combined with the technology revolution that has ushered in tools such as digital asset management systems and programmatic buying platforms have only served to fuel advertiser concerns about their advertising investment.

The Association of National Advertisers (ANA) has twice this year issued statements regarding their membership’s concerns about the “transparency crisis” enveloping certain industry practices.  In May they announced that they were stepping up their “scrutiny of media practices” with the goal of shedding some light on the “dealings” between agencies and publishers.  Based upon a study which the organization had completed in February, 2014 forty-six percent of the ANA members’ surveyed expressed concern over the “transparency of media buys.” This was followed by a blog post in October in which the ANA acknowledged concern over a position paper issued by the trade group AICE dealing with agency in-house production practices entitled; “A Push for Greater Transparency, Ethics, and Fairness.

The good news is that advertisers need not wait for the various industry associations and their members to form task forces or appoint committees to assess the risk and propose potential solutions to the “transparency crisis.”  While these are important steps to be taken, they are time consuming, the potential outcomes are uncertain and the proposed solutions will not be tailored to a specific advertiser’s needs.  So what can an advertiser do today to thoroughly vet these issues and reassure their stakeholders that any attendant risks have been mitigated and to validate that they are receiving fair value for the advertising investment being made?

The answer is as close as a copy of the executed contract which is in place between the advertiser and the agency.  Specifically, the solution can be found in the “Right to Audit” clause, which is a staple in an overwhelming majority of client-agency agreements.  In short, this important clause affords advertisers the opportunity to examine the agency’s records of expenditures pertaining to the agency’s billing to the client for the purpose of validating media bills, production bills, studio costs and reconciling agency fees.

Audit clauses are inserted into contracts because they are an important financial control.  Yet, too often advertisers treat their right to audit as a fall back option, which all too frequently is never acted upon.  When this clause is not acted upon, the advertiser forgoes the opportunity to implement standard compliance testing, which in turn limits their opportunity to validate agency billings and gain a certain level of comfort that comes with transparency into the agency’s financial stewardship of their advertising budget.

Once audit rights have been established, industry “Best Practice” would suggest that implementing periodic and routine testing is a must for introducing and maintaining ongoing preventative control measures.  The resulting testing which occurs as part of the audit process can help to deter wasteful practices, identify errant billing transactions and to monitor key financial metrics. All told, a well defined contract compliance audit program can help an individual advertiser address the “transparency crisis” while providing the organization the necessary legal and financial safeguards.

Of note, the agency community has come to accept independent audits as a normal part of an advertiser’s broader corporate or marketing accountability initiative.  Any pushback on this front should be viewed as a “red flag.”  For those agencies which have implemented sound financial stewardship practices there is nothing to fear from an advertiser’s review of their performance in this important area.  Quite the contrary, a well conceived, balanced independent audit process can yield insights and recommendations which also benefit the agency.  Lailah Gifty, a Ghaniaian and founder of the Smart Youth Volunteers Foundation, rightfully said:

“Never believe all that you hear. Always verify the original source of information.”

Those advertisers conducting business without a comprehensive “Right to Audit” clause are simply at risk, forgoing the most important control mechanism available to them to protect their interests.  For those advertisers, which have secured audit rights, but have failed to act upon this right, you are unnecessarily exposing your organization to legal and financial risks.

The “transparency crisis” cited by the ANA is a legitimate issue, which the industry will successfully address in due course.  The question to be asked of advertisers is; “Are you prepared to wait for a broad-based industry solution? Or do you leverage the contractual rights which you have already secured to address these concerns now?”

If you’re interested in learning more about how you might improve your agency contracts or the benefits of advertising agency contract compliance audits contact Cliff Campeau, Principal with Advertising Audit & Risk Management at ccampeau@aarmusa.com for your complimentary consultation.

Technology Companies Are the New Media Owners

01 Apr

technology firms as media ownersBy Oliver Orchard, Senior Client Director – EMM International 

This week I was fortunate to attend a debate in the British Parliament, The House of Commons.  The debate was hosted by the International Advertising Association (IAA) and organised by The Debating Group.   The IAA was formed in the 1930’s to help advertisers who were moving more and more towards export trade to understand the complexities of the different global ad markets. EMM’s staff are encouraged to take an interest in the work of the IAA, and we put many people through the residential training courses, with some of our senior staff holding committee positions.  The remit today is very much about helping to develop the client and agency heavyweights of the future, through networking, training and support.  The Debating Group has been holding debates in the House of Commons since 1975, and they regularly bring politicians, journalists and marketers together to discuss the political issues that surround marketing; and together they host a number of debates annually for the industry to participate in. 

The motion “Technology Companies are the new media owners” was supported by Rory Sutherland, Executive Creative Director and Vice Chairman of O&M and seconded by Anjali Ramachandran, Head of Innovation at PHD.  It was opposed by Hugo Rifkind of the Times and Chad Wollen, Group Head of Innovation and Commercial Futures at Vodafone. 

Rory and Anjali focused on the idea that ever since the Caxton Press printed the first secular work technology has always been the new media owner; whilst Hugo and Chad focused on the idea that media owners display some sort of moral conscience, or in some way better the world, through editorial.  Naturally, with Hugo’s work as a journalist this focused on print media and the role of Twitter and Google in events such as the Arab spring; though what sort of conscience media owners such CBS Outdoor, Exterion or Decaux demonstrate was conveniently overlooked.  Chad explored the idea that the message is separate to the medium; which as any junior planner will tell you is exactly why they have a job. 

The panel spoke eloquently for 40 minutes, and ultimately the motion was defeated. I voted against it myself, though with a different line of argument I feel the result would have been very different. 

The proposers missed a trick by ignoring media agency trading desks, DSPs, SSPs, RTB and inventory wholesaling.  Media agencies are the new technology companies, they are also the new media owners.  This situation is becoming more and more apparent to advertisers.  Many are scrambling to change their contracts in order to maximise their returns on the ‘good’ output of these technologies (the fantastic targeting and pricing), whilst seeking to limit the ‘negatives’  (unaccountable placements, lack of evidence of genuine exposures and the opaque margins anecdotally between 20% and 80% depending on quality of placement as one rather inebriated global head of a big five DSP network let slip to me recently). 

These technologies are increasingly supplanting the traditional agency/vendor relationship and are replacing transparency with opaqueness in an unprecedented way.  The share of digital on the schedule grows every year, the number of clients with a DSP clause in their contract grows weekly and every day traditional media channels become more and more digitalised.

Clients are often under-informed about these developments and contractually deficient when it comes to agency scopes. So what can you do? 

  1. Make sure that your contract with the agency is updated every year to cover all new technologies that might emerge – mobile advertising, RTB and interactive TV were all unthinkable until quite recently.
  2. Employ a specialist with a broad helicopter view of the market to ensure you are giving and receiving best practise in your process and relationships with the agencies for traditional and new media.
  3. Ensure you understand fully what the benefits and limitations are of new technologies.  With a recent study showing that just 8% to 15% of impressions online are actually “real” does that CPM deal really offer the best value?
  4. Understand which data is relevant and which is not.  Don Peppers, the social media guru, once said “trying to extract relevant data from digital is like putting a fire hose in your mouth when you’re thirsty” – it’s easy to be blinded by numbers, but in reality very few of them are important.
  5. Don’t go it alone, a market specialist can save you time and money by getting to the point, training your staff, and sitting on your shoulder during important future strategic discussion with the agency. Once you understand the game, ask the right questions, and make informed decisions, increased effectiveness will follow.

Some technology companies are the new media owners, they also happen to be your media agency.

To learn more about EMM International and how media accountability can drive advertiser value, contact guest blogger Oliver Orchard at Oli.Orchard@emminternational.comMr. Orchard is a Senior Client Director for EMM International and a key contributor to the company’s digital media accountability practice.  EMM is a provider of international media auditing and media optimization consulting services.  The company is based in London, England.   

 

 

GSK’s Pay to Stay Program Ignites Firestorm

31 Dec

gsk decision ignites firestormEarlier this month, it was reported by the British press that GlaxoSmithKline, the global pharmaceuticals giant, had asked its marketing services agencies to tithe back to the advertiser if they wanted to remain on the advertiser’s roster.   

The multi-point program allegedly contained two provisions which have sparked a controversy within the advertising industry.  The first involved asking roster agencies for rebates on 2013 work already performed and the second was a requirement that agencies make a bonus payment to GSK to remain on the roster in 2014.   The Marketing Agencies Association (MAA) spoke out against the aforementioned tactics and a similar approach employed by Premier Foods earlier this year, calling for a “crisis summit” to discuss “counterproductive demands by advertisers” which would include client-side procurement heads, marketing directors, member and non-member agencies and the Institute of Practitioners in Advertising (IPA). 

If there is a silver-lining to the controversy, it is that stakeholders on both sides of this issue come together to air their perspectives and to lay the groundwork for continued dialogue surrounding the appropriateness of certain supplier relationship management tactics imposed by advertisers on their agency partners.  

Without casting judgment on the aforementioned advertisers or their respective “savings” initiatives, it is fair to say that there are consequences which will result from these actions that will impact advertiser and agency alike.  

From an advertiser perspective, it would have been interesting to be the proverbial “fly on the wall” during the internal discussions between marketing and procurement when the nuances of this initiative were being hammered out.  One would assume that the client-side marketing teams within GSK and Premier Foods were no more enthusiastic with the approach ultimately taken than their agency resources were when the details were shared with them.  

If this is an accurate hypothesis, than what does that say to professional marketers about the environment within these two organizations and their regard for marketing’s role in managing their marketing services agency networks?  In turn, what impact will those perceptions have on the two firms’ ongoing efforts to recruit and retain top-notch marketing personnel?  

In an industry where procurement and their marketing stakeholders have been working diligently to establish the basis for a productive collaboration in the area of agency selection, remuneration and stewardship will there be a spillover affect?  Or, to the extent that decisions such as this create “bad blood” between the two functions will that be limited to the organizations in question?  

Agencies have been down this path before and they have choices, as difficult as they may be from a bottom-line perspective.  Accept the terms being offered by the advertiser or reject them and forgo the opportunity to work on that account. In this scenario, the question may be less about remuneration and more about the impact on employee morale, the work product and agency culture when serving an advertiser who views the agency not as a partner, but as a vendor upon which it can impose heavy handed pricing tactics as and when it deems appropriate.   

Based upon our experience, we would offer one cautionary note at this stage of the discussion.  It would be wrong to paint all clients or all procurement professionals with the same broad brush, falling back on the “see, I told you so” refrain when it comes to procurement’s role in the marketing area.  The tithing practices referenced above are not widespread.  We are talking about a handful of advertisers in an industry where there are a myriad of “good actors” that embrace a fair and balanced approach to the issue of remuneration and the stewardship of their marketing agency partners. 

Let’s hope that the light shined on this topic serves to advance the relationship between procurement and marketing in working together to achieve their organizations pricing and expense reduction initiatives in a more even handed manner.

 

 

Do Advertisers Get What They Pay For?

17 Sep

do advertisers get what they pay forToo often, the answer is “No” advertisers do not get what they’ve paid for.  These shortfalls typically manifest themselves in two camps: 1) Lackluster service levels and work quality; and 2) Financial stewardship missteps.  Needless to say, both can have a negative impact on the efficacy of an organization’s marketing investment.

How can this be?  You ask.  There is a truism in the advertising world that what is inspected is respected.  Organizations that don’t apply this standard to their agency partners and third-party vendors are, quite simply, at risk. 

There are a number of factors that can impact service levels and work product.  These can include excessive agency staff turnover, deficient levels of involvement by senior agency personnel on the business, process limitations that squander time or fail to produce “memorable” work that is on strategy.  These items can result in high levels of project rework, scope creep, relationship dissonance and, if not kept in check, can negatively impact an advertiser’s demand generation efforts.  Make no mistake about it, this carries economic consequences that limit an advertiser’s return on marketing investment (ROMI).

Sound financial stewardship of an advertiser’s funds by their agency and third-party vendors is the fiduciary responsibility of each and every supplier.  However, an advertiser cannot leave anything to chance.  Tight contract controls regarding agency staffing, scope of work, remuneration parameters and reconciliation and reporting guidelines are a must and represent the first line of an accountability defense. 

Additionally, advertisers should require their media agency partners to conduct thorough post-buy analyses, conduct regular third-party billing reconciliations and to secure compensatory media weight and or cash for audience under delivery on a timely basis.  In the creative services arena, agencies should be monitored to insure adherence to the organization’s cost controls, production management and third-party accounts payable guidelines to insure that an advertiser’s billing and accounts payable expectations in these areas are being met. 

The financial impact of shortcomings in any of these areas can be significant.  In our agency contract compliance auditing practice it is not unusual to identify one-time errors or systemic oversights that can represent between 1.0% and 9.0% of an advertisers budget.  So what can an advertiser do to insure that they are securing maximum value for their advertising expenditure?  In the words of noted businessman and author Albert E.N. Gray:

Inspect what you expect.”

Clients that have clearly articulated their expectations regarding agency staffing, deliverables, performance criteria and reporting have a much better chance to achieve their objectives and ensure they’re getting their “money’s worth.”  However, an advertiser must go beyond this important first step and incorporate a transparent process for auditing agency contract compliance and assessing performance relative to their stated goals.  The notion of an audit inspection should not send a negative message.  To the contrary, it is respected aand understood as a necessary control process like any other, such as balancing the cash-register daily in retail.   Call it what you would like (review, continuous monitoring, compliance testing, advertising audit), it’s simply a thorough way to ensure the millions of dollars spent on advertising are tracked appropriately.  Too many large marketers do not have such a process in place.  The combination of these actions will afford an advertiser the opportunity to drive each of the stakeholders that comprise their marketing supply chain to extraordinary performance.

It should be noted that supplier accountability management is not a one-and-done proposition.  Implementing and executing a system which has an ongoing monitoring component, often utilizing independent auditors, is necessary to ingrain the requisite processes into the culture of the advertiser and each member of their marketing services agency network.  In the words of the great philosopher Aristotle:

We are what we repeatedly do.  Excellence, then, is not an act, but a habit.”

Interested in learning more about marketing accountability and how to implement the appropriate controls and transparency?  Contact Don Parsons, Principal at Advertising Audit & Risk Management at dparsons@aarmusa.com for a complimentary consultation on this topic.

Why Go to a Doctor for an Annual Check-up?

29 May

Whether in our business or personal lives, third-party inspections are a fact of life.  Public companies are required to engage independent financial auditors to review their financials.  Many U.S. firms are subject to independent inspections by OSHA to ensure compliance with the Department of Labor’s employee safety and health standards.  And for purposes of establishing a tax base, local governments employ independent appraisers to assess the value of commercial and residential real estate.

Certainly there are times when we rue the fact that we are subjected to outside scrutiny.  However, independent inspections are both necessary to protect stakeholder interests and provide valuable insights that enable businesses, governments and individuals to mitigate risks and drive improvements.

So when it comes to marketing accountability, why do so many organizations eschew independent third-party reviews of their agencies’ processes, contract compliance, financial compliance and performance?  Sadly, in a majority of instances an advertiser allows its agency partners to self-police themselves by providing their own internally generated performance reports on topics ranging from how they invested and stewarded their client’s media dollars to the agency’s time-of-staff investment; or the timeliness with which they paid vendors; or processed discounts, rebates and credits back to the client.

Given that the marketing budget is often the largest component of an organization’s SG&A expenses, one has to ask, “Does the absence of third-party marketing agency oversight make sense?”  “Are there benefits which accrue to the organization by not engaging independent auditors to review compliance and performance across their marketing agency network?”  Can one honestly answer “Yes” to either of these questions?

Marketing accountability audits take several forms ranging from contract compliance reviews, process and performance assessments to financial and media audits.  Conducted by professional independent auditors the process is designed to help advertisers and their agencies mitigate financial and legal risks, improve work processes, verify the equitability of agency compensation, and enhance reporting and communications.  The objectivity, transparency and best practice comparatives yielded by an independent marketing agency audit can provide a positive basis for creating solid, performance-based relationships with each of an advertiser’s marketing agency partners.

It makes sense to outsource since the analytical software, industry knowledge and specific subject matter expertise required to conduct a comprehensive examination of an organization’s marketing spend are typically not available within the advertiser’s Finance, Procurement or Internal Audit staffs.

It is virtually standard practice for client-agency agreements to allow advertisers the “right to audit” all aspects of the agency relationship ranging from agency resource investments to fee reconciliations to financial transaction details and supporting documentation. 

Ironically, very few advertisers enact their right of independent examination, a right that they felt important enough to negotiate into the contract on the front-end of the relationship. 

In the word of noted American author, Bodie Thoene:

“What is right is often forgotten by what is convenient.”

Interested in learning more about marketing agency accountability audits?  Contact Don Parsons, Principal at Advertising Audit & Risk Management for a complimentary consultation at dparsons@aarmusa.com.

The Time is Right for Procurement & Marketing

06 Nov

time is right for marketing procurementToo often brands change advertising agencies like politicians change their stance on key issues. Debating the efficacy of this dynamic is a topic for another time. The issue which I would like to address is how Procurement can assist their Marketing peers in mitigating the risks associated with the revolving door approach being employed by many organizations when it comes to their marketing services vendor network.

Building brands is expensive to be sure and there is no guarantee that if a company invests the marketing funds necessary to launch and sustain a portfolio of brands that its efforts will yield the desired results. However, successfully building brands can create tremendous asset value for an organization which in turn can deliver superior returns to its shareholders year-in and year-out. Given the size of the budgets involved and the relatively thin margin between success and failure, it behooves an organization to optimize each and every marketing dollar invested.

To this end, the Marketing Team is perfectly capable of assessing the competitive landscape, positioning the organization’s brands for competitive success and determining the appropriate strategies for driving sales and market share. Proficiency in these areas will drive sound resource allocations decisions with regard to target penetration, market support, media selection and messaging. Marketing should “own” these areas and should be held accountable for the impact of their decisions and the resulting return on marketing investment.

So, where does the role of Strategic Sourcing come into play? In assisting Marketing with the procurement, stewardship and evaluation of its agencies, thus leveraging their processes, tools and expertise to aid marketing in the following areas;

  • Managing the vendor selection process
  • Development of agency remuneration programs
  • Best practice contract development/ negotiations
  • Improved reporting and transparency
  • Ongoing monitoring of agency performance
  • Independent auditing of agency contract compliance and performance
  • Securing and providing performance and relationship feedback to all stakeholders

With Marketing focused on the demand generation side of the ledger and Strategic Sourcing on procurement best practices, the organization stands to benefit both in terms of in-market performance and in maintaining the appropriate controls, transparency and benchmarking data that can drive marketing vendor sourcing and performance management.

The old days of decades old agency relationships are not as prevalent as they once were. Therefore, advertisers must confront the impact of the growth in the number of marketing services vendors and the frequency with which this roster of agencies changes. With change comes opportunity to be sure. But change also increases the risk quotient. With Procurement and Marketing working together the opportunity to effectively manage the risks associated with these changes; improve vendor network performance and the organization’s return-on-marketing investment increases exponentially. Interested in learning more? Check out the article by Paul Broeren, Managing Partner of Quadrivium BV on how to enhance to effectively involve procurement in the marketing services procurement process at Procurement Leaders.

 

Is the Notion of Uncoupling Production from Creative Really That Foreign?

05 Mar

There is an interesting approach in the creative services procurement area that has been gaining traction among large, multi-national advertisers… the “unbundling” of creative and production services. As part of this unbundling process, advertisers turn to a production specialist, rather than their creative agencies as a resource for generating creative outputs.

At first glance, this seemed an unusual move fraught with agency management challenges and the risk of sub-standard creative outputs tied to the uncoupling process. However, upon further reflection, the approach is not dissimilar to the process employed today. The chief difference is that the advertiser serves on point in sourcing and managing the production resource rather than the agency. Aside from the obvious improvement in agency fee transparency tied to the segregation of services, the benefits are certainly intriguing.

With the advent of technology enhancements in the area of digital brand asset management systems, a production resource that can provide support across multiple regions and generate outputs for a myriad of media touch points could improve the effectiveness and efficiency of the advertiser’s creative development process. How? Effectiveness can be enhanced by the ability to manage brand expressions on a consistent basis, around the globe and across media. From an efficiency perspective the centralized control afforded by a brand asset management system and a client sourced production resource will improve the level of repurposing of creative assets, thus reducing the need to recreate the wheel time and time again across an advertiser’s creative agency network.

Finally, in a market where response time is a highly prized commodity, this approach will help advertisers carve time out of the creative development cycle. Interested.in an agency professional’s take on this approach? Check out the following blog by Steve Puttock, Managing Director of Schwak London Read More.

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