This post is by Darren Woolley, Founder of TrinityP3. With his background as analytical scientist and creative problem solver, Darren brings unique insights and learnings to the marketing process. He is considered a global thought leader on agency remuneration, search and selection and relationship optimisation.

With only days to go before the Festive break, it is time to take a few minutes to review and plan the New Year.

It is ideal to do this now as invariably when you return from the holidays it is easy to get caught up in the day to day management of the brand and before you know it, it will be Christmas again and another year has gone by.

It is like the old saying “When you are up to your ass in alligators, it is difficult to remind yourself your initial objective was to drain the swamp”.

But here are 5 things to consider and plan to do in the coming year that will mean you will be sitting here in 365 days time with a more effective and efficient marketing program.

1. What:

What is required for the coming year?

What are the measurable objectives both for the business and the marketing team?

What is the marketing plan to deliver these objectives?

What is required to deliver this plan?

Without clearly understanding the “What”, delivery is almost impossible to plan and manage efficiently and effectively. So take some time to check the plan both forward and backward.

Forward to what is required in the scope of work and back that the plan is aligned to the strategy and the strategy is aligned to the objectives.

2. When:

Time to check the calendar or the annual planner.

Identify the reporting periods. The planning periods. The budget reviews. Contract renewal dates. Agency / Suppliers performance reviews.

Beyond the marketing plan for each brand, it is worthwhile including on this plan the other essential dates and timings to provide insights into any breaks and throughs.

This allows you to schedule less time-critical projects to manage the workflow to maximise the resource use within marketing.

3. Who:

You need to take stock of the internal resources and external resources.

This is best reviewed against the scope of work (see What) and the budget allocations by output or project. Many supplier rosters have developed organically over time and each year it is worth considering if the current roster meets your requirements.

With more diverse specialist services and agencies broadening the range of services they offer outside of their core offering, it is more effective to take a strategic approach than a functional one.

This means categorising your agencies and suppliers against your strategy identifying those who drive strategy, those who are specialists and those general suppliers in the mix.

4. How:

While the traditional approach was to brief the agency who took the process from strategy to implementation, marketers are now seeing the opportunities in matching the supplier to the specific requirements. After all, strategically essential tasks have very different requirements to preparing campaign collateral, so it does not make sense having the same quality of supplier and paying the same price.

Many marketers are now looking at investing in the strategically important components and looking for cost efficiencies in those areas that are less important. In production this is utilising transcreations companies and in media using data analytics specialists to inform the media trading.

5. Where:

The traditional view had services delivered either internally by marketing or externally by agencies and other marketing suppliers. But technology means that there are now more options available depending on your strategic requirements, budget, volume and complexity.

The options are best expressed as Here, Near and Far.

Increasingly marketers are either bringing services in-house such as social media management, SEO and SEM (Here). Others are looking at decoupling production from their agencies. (Near) Others are taking advantage of lower cost off-shoring, especially digital and print production. (Far)

It is worth reviewing your scope of work and budget allocation to see where you could be making your marketing budget go further.

There are not many marketers who have time to stop and consider the management of their marketing. But as you wind down to the festive break, taking some time to review and consider your requirements for the coming year could provide you with an insight or plan to make the process more effective and efficient.

Simply reflect on the Who, What, Where, When and How and you are going to get it all done next year.

Thank you for your interest, comments and sharing in 2012. It makes it all worthwhile.

Now we are going to take a well earned break and will be back on January 2, 2013.

Wishing you all a safe and happy festive season and see you all in the New Year.

This post is by Darren Woolley, Founder of TrinityP3. With his background as analytical scientist and creative problem solver, Darren brings unique insights and learnings to the marketing process. He is considered a global thought leader on agency remuneration, search and selection and relationship optimisation.

When we started 12 years ago the typical agency roster was a creative agency and media agency and then a whole lot of specialists like sales promotion and direct marketing and even occasionally a digital agency.

Today nothing is so clear cut.

On the channels side there is discussion and consideration around rolling all of media in with the media agency or sourcing specialists in SEM, SEO and Social.

On the content side there are more advertisers questioning the role of the creative agency and discussing and considering the role of other specialists such as data driven, direct marketing with a digital core competency.

The traditional creative agencies have certainly evolved over the past 12 years, building or adding competency in these areas, but there is an underlying belief with some marketers that the creative agency is not necessarily the ideal solution anymore.

Why?

I believe there are three core reasons for the questioning of the role the creative agency plays:

1. Corporatisation of agencies
2. Siloed structures within companies and marketing
3. Agencies forgetting where they create value

Here is why:

1. Corporatisation of agencies

While Sir Martin Sorrell recently and controversially stated that it was becoming “increasingly hard for independent agencies to thrive or survive” as marketers preferred efficiencies and convenience over effectiveness.

But the corporatisation of the advertising agency has driven this trend of cost efficiencies as public companies like WPP remind marketers and procurement of the premium they are paying with regular reports of record quarterly and half yearly profits for many of these publicly listed holding companies.

Of course any marketer will tell you that they want their agency to make a profit. But reports of record profits from their agencies when many brands and advertisers are facing falling revenue, profits and budgets simply reinforces the feeling that agency fees should be cut further.

Independents on the other hand are usually private companies and therefore do not have to report their finance publicly and so do not rub their client’s noses in their financial success.

Many feel that this very public focus on profits and profit reporting has also influenced the management of the agencies within the holding companies, with salary freezes and head count freezes to maintain or increase profit reporting occurring at the expense of retaining or even developing talent within the agencies.

Corporatisation has also seen the commoditisation of creativity as holding companies have managed conflict by creating pools of resources, over distinctive brands. This allows client conflicts, that have traditionally been a limitation to growth for the agency, to become the reason for the more generic and modular approach to agency brand management.

A client with a conflict in one agency can either easily be relocated into a similar generic offering or even, have an agency built around them to supposedly suit their specific requirements. What is invariably lost is the diversification of thought, stimulus and cross-pollination of ideas that feeds creativity and innovation as the modular agency becomes simply an extension of the client’s marketing department.

2. Siloed structures within marketing departments

In large companies, the management structure is increasingly silo based. This structure is then often replicated in the appointment of agencies to the client’s business either in multiple agencies or multiple and separate teams within the same agency.

This has two effects.

Firstly, it moves the agency involvement and influence further down the organisational structure as agencies are relegated, much like the marketers themselves, to be a service provider to a business unit or segment, rather than having input and influence at the C-suite. This means that the agency increasingly becomes simply an order taker for the delivery of advertising materials rather than providing strategic and innovative insights and recommendations to the higher levels of the business.

Secondly, this silo approach provides a manageable structure, but often at the cost of innovation and creativity. These silos become aligned in culture and expectation and are self perpetuating in their view of the world and the task at hand.

The silo structure within the organisation and mirrored externally within the agency means that research, insights and ideas are often not shared across the organisation. Increasingly CEOs are aware of this and are actively looking for ways to increase collaboration across the business units within their organisations.

Innovation and creativity are based on curiosity and necessity (it is the mother of invention). Without the cross pollination across silos creativity often stagnates within narrowly focused cultures. Agencies, which were in the past a source of this creative and innovative thought are no longer able to provide a whole of business view as their structures reflect their client’s organisational structure.

3. Agencies (and marketers) not understanding where they create value

It can be argued that from the earliest days of the advertising agency, back in the mid 1800s, J. Walter Thompson and his colleagues saw creativity as an added value service to secure the sale of media. The media commission remuneration system supported this approach with strategy and creativity provided under the commission and the client paying for the production costs.

With the separation of media and creative and the move to hourly rates and resource costs, media agencies have re-discovered revenue from the media proprietors, while creative and digital agencies are still generating their revenue disproportionately from production instead of strategy and creative thinking.

But where do agencies create value? The current remuneration models are largely cost recovery processes. The function of business is to minimise these costs and boost revenue growth.

Yet agencies, both media and creative and digital, generate more of their revenue from implementation than they do from creating. Yet without the strategy and creative process, without the creation of ideas, the production and implementation process is largely worthless.

Many agencies say that marketers will not pay for ideas. But perhaps it is because agencies do not believe in the value of these ideas, or more importantly the value that these ideas can generate, that they are willing to be paid based on this value.

At the same time technology is making the implementation process more cost effective and time efficient. Many agency holding companies have seen low cost production competitors taking their revenue and have commenced offering similar services at the expense of their creative agency revenue base.

In the meantime, other companies such as digital media and technology companies have recognised that their own brand of innovation and creativity is highly attractive to marketers. The increasing interest in SXSW and the increased involvement of Google and Facebook with developing marketing strategies means that creative agencies are no longer seen as having exclusive claim to the creative crown.

What do you think?

This is a guest post from Shawn Callahan – Founder of Anecdote, a management consulting firm that uses its expertise in story to inspire enduring change.

The nature of the successful strategy is changing. Today, a company’s success depends in large part on how deeply its strategy is understood and embraced. This understanding and acceptance gives an organisation the ability to learn and adapt to changes faster than its competitors. It becomes more agile.

While most companies expend considerable effort and resources on creating a strategy, few focus on the fundamental question, ‘Do we have a strategy that will be understood and embraced?’ Or to put it another way, ‘Do we have a strategy that will stick?’

There are many things you can do to make a strategy stick. At Anecdote, we have a 12-month program that helps participants to achieve this result. But some strategies are just better than others from the moment they come out of the strategic planning gate. Here, we will examine the stickability of the new strategy.

There are a number of obvious factors that reduce the chances that people will understand or believe your company strategy. For example:

• If it’s longwinded, it will be forgettable.
• If it’s merely a task list, a series of dot points, it will be forgettable.
• If it’s abstract or ambiguous, it will be forgettable.

We all know this. These are the obvious mistakes.

But less obvious are the factors that will increase the chances that your strategy will be understood and embraced.

Here are five things that will help your strategy stick.

1. A meaningful purpose

The executive team sat around the boardroom table. They’d reached an impasse. Half the group felt the company’s purpose was merely to return value to its customers and shareholders. The other half thought the company existed to provide a financial safety net for its clients’ families during the toughest times. In the end, they compromised and said it was both, instantly reducing the potential impact of their strategy.

Purpose is the bedrock of strategy. If employees don’t care about their company’s purpose, they are unlikely to invest any energy in understanding it, let alone believe it.

A strong purpose, one that everyone is proud of, one that has meaning beyond merely making money, helps make your strategy stick.

2. Clear, bold moves

Companies have gotten into the habit of believing that a strategy is a vision, a mission, with values and strategic objectives or goals. But as strategy guru Richard Rummelt makes clear, this alone is a recipe for a bad strategy. A good strategy requires strategic choices, or what we call bold moves.²

Objectives such as ‘Great place to work’ or ‘People engagement’ are not bold moves. Rather, employees want to know, in broad terms, ‘What are we going to do?’

A case in point is when the natural resource giant BHP Billiton shed ‘all parts of the business that weren’t natural resources’ – a bold move. It sold its steel business, its IT consulting division and its fleet of vehicles, among many other things. Its goal was to focus on being a leading global resources company, and it was willing to make bold moves to achieve this.

Strategies with clear, bold moves are more likely to stick.

3. You can feel it

Even as a boutique consulting firm, we still take ourselves through a strategy creation process every three years. In fact, we’ve just finished the process of creating our new strategy, and I have to say that, while considering our next bold moves and where we want to get to in the next three years, I had a knot in my stomach, a mixture of excitement and trepidation. We were facing a real challenge and I could feel it – it was palpable.

Humans are hardwired to notice differences. If a strategy is just ‘more of the same’, then it’s likely to remain unnoticed. On the other hand, a strategy that evokes an emotion will grab our attention and we will want to know more.

We remember what we feel. A strategy that triggers an emotion, that make us feel it, is more likely to stick.

4. In sync with leadership behaviour

People have finetuned bullshit detectors. If a company strategy says, for example, ‘We are going to embark on a strategy of collaboration’, but every single employee knows that their leaders have never demonstrated a single collaborative behaviour, then they are highly likely to dismiss this strategy as BS.

However, if a strategy is in sync with what we know is the character of our leaders and the culture of our organisation, it becomes plausible. For example, when IBM took the bold move of leading with IT services, the history and capabilities of the company supported its strategy. It was a plausible story.

A strategy that is aligned with and reinforces the ingrained behaviour of a company’s leaders is more likely to stick.

5. Can be shared as a story

A strategy that can be shared as a story is more memorable and meaningful than a collection of dot points and abstract statements like, ‘We will provide branded products and services or superior quality and value that improve the lives of the world’s consumers, now and for generations to come’ (from Procter & Gamble).

Converting your strategy into a story has three other benefits:

1) the story explains why particular bold moves were chosen;

2) it’s easier to retell a story than a series of dot-point arguments, no matter how well honed they are, so it’s more likely it will be shared across your organisation; and

3) a story can be expanded or contracted depending on the audience and the time you have available.

Wrapping your strategy in a memorable story will help make it stick.

So as you are developing your strategy, think about how you can craft it to increase its chances of being quickly understood and embraced throughout your company. The five factors described above are a good checklist to start off with.

This is a guest post by Nathan Hodges, TrinityP3‘s General Manager. Nathan applies his knowledge and creativity to the specific challenges of marketing management, with a particular focus on team dynamics and behavioural change.

Our judo teacher at school wasn’t a large man, nor was he the fittest. But he could throw far taller, far stronger people across the mat and into the floor with regularity, ease and a sly smile.

Including me.

As he always explained to us, the secret was never to battle with your opponent head on – never meet strength with strength (because then strength will win). Instead use your opponent’s momentum and lack of balance against him or her.

We’ve been working with several large marketing departments this year, helping to re-engineer their processes and ensure that structure follows purpose.

And towards the end of each project, the question often arises as to how best to ‘launch’ the new way of working to the rest of the company – especially to the sales or product divisions or to the vertical business units.

In marketing, we like to convince and persuade.

We use data and research to help substantiate our arguments and make them more compelling. We still love to be working with a ‘big idea’ (even if lots of agencies can only present them in the one medium) or even lots of small ideas.

We prefer to ‘launch’ and ‘reveal’ and ‘present’ and ‘unveil’.

We spend hours on our vision and mission statements.

We speak the language of conversion.

The trouble is, this is just the way that many sales teams like to work too. And product departments. And most business units as well.

So we all end up presenting to each other, trying to convince each other, meeting strength with strength, and getting nowhere.

Perhaps all this is the opposite of what we should be doing. Maybe we should be thinking more like a judo master.

Influence – like judo – doesn’t try to confront or oppose. It’s not just an abstract noun – it’s a recognised set of techniques that can, like everything in life (and like judo) be learned and practised. It’s constantly confused with persuasion, of course – usually by the very people who love to persuade.

But the real beauty of influence is that it isn’t concerned with changing beliefs or even attitudes. It’s all about what everybody claims to be about at the moment: changing behaviour.

Influence acts just at the moment before that behaviour takes place, and it can work powerfully for people, organisations and brands.

If you’ve never come across the work of Dr Robert Cialdini, then treat yourself. Google him.

Cialdini’s argument (briefly and brutally summarised for a short blog piece) runs like this:

People are much more likely to do what you’re asking them to do if they:

1) like you

2) owe you

3) believe that people like them are doing the same thing

4) believe that you have some degree of authority

5) feel they are being consistent with a decision they have taken before

6) believe that the chances of doing this at some other time are limited

Nothing in there, by the way, about being convinced, or converted, or people agreeing with you and everything you stand for and believe.

Cialdini’s thinking is disarmingly simple, but the practical implications can be profound.

Suddenly you don’t need agreement, you don’t need to convince everyone of your argument. You simply need to influence behaviour.

So here’s a good way to kick off 2013 – get yourself properly across Cialdini’s thinking, and in particular take a good look at his six psychological cues of influence.

Work out which ones you use already, which ones work most powerfully on you and which ones could be most easily employed to improve the way you work – either as a marketing department with the rest of your company, or as an agency with your clients.

Then – the fun bit – work out which ones to apply to your communications and the brands you’re working with next year.

Our judo teacher was also our physics teacher. I wonder if Cialdini ever thought about teaching judo. I bet he’d be amazing.

This is a guest post by Nick Hand a Senior Consultant at TrinityP3. Nick has over 15 years experience in advertising agency finance and operations. His expertise and knowledge covers the spectrum from large multi-national operations down to the boutique creative shop.

A couple of weeks ago I wrote about agency accounting practices that leave clients frustrated and annoyed.

You won’t be surprised to hear that the traffic goes in both directions, and agencies deserve a right of reply.

So herewith, the top 5 client accounting demands that leave your agency feeling unloved and unvalued.

1. Removing legitimate business costs from the overhead calculation

Previous TrinityP3 blog posts have covered how the agency overhead mark up is calculated. Unfortunately many advertisers insist that agency costs and time spent pitching for new business not be included in that calculation.

As one marketing director put it to me: “my agency pitching for new accounts adds absolutely no value to my business and has nothing to do with me, so why should I pay for it?”

A comment like that is the same as me demanding a percentage be taken off the price of the FMCG I’m about to purchase, because I don’t think I should have to pay for new product R&D. In one word: ridiculous.

A regular new business pipeline is essential for agencies surviving, let alone prospering  (just as new products or offerings are for any business). Winning new business adds financial stability to an agency, allows investment in new and better people, and puts a spring in everyone’s step; how a client can believe that doesn’t add value to their business is beyond me.

Advertisers move agencies more from global realignments and changes in marketing director than they do because of poor performance – neither are the fault of the agency, but accounts that need to be replaced to maintain the agency as a going concern.

And while clients continue to insist on full creative pitches, agencies spending good time and money on it is a necessary (if evil) cost of doing business and a legitimate overhead expense.

2. Stretching agency payment terms

The lowest common denominator linking all business is that they exist to generate cash, and regular cash flow is the lifeblood of any business.

I find it vexing when those organisations who generally have lots of it – many large, multinational corporations engaging in lots of advertising come to mind – make those who don’t – their smaller agency “partners” – wait 60, 90 sometimes even 120 days for it.

Factor in the 4 months the campaign was a work in progress, and that’s 8 months the agency is left bankrolling the client’s advertising, while the client’s treasury department reaps the rewards of the short term money market.

It’s even worse for the media agencies (operating on gross margins of 3 or 4%) that must, by hook or by crook, pay the media companies in 45 days.  Who would want to invest in an agency on those terms? You’d make a better return leaving your “agency start up fund” in the bank or under the mattress!

Worse still, advertisers offer to shorten payment terms as a negotiation tactic to get fees down. That little stamp freelance Mac operators sometimes put on their invoices: “please pay me, so I can pay him, so he can pay her, so she can pay you” may seem a touch quaint, but perhaps sums it up quite nicely.

3. Increasing the baseline hours number when calculating agency head hour rates

Agencies try and use as small a number as possible (because it increases rates) and clients try and use a number as big as possible (which reduces rates).

It is (or should be) a purely mathematical and logical exercise. Darren Woolley has blogged on this one before, but let me give you a refresher. Assume a 37.5 hour work week (which is around the mark in most developed countries). 52 weeks in a year equals 1,950 hours. Subtract 4 weeks annual leave (150 hrs), 10 days of public holidays (75 hours) and 10 days personal/sick leave and you get 1,650 hours, maximum, that an employee is available to do actual, productive work.

Factor in having to do some internal admin., training, or managing staff, and working on pro-bono and new business opportunities.

I don’t see how some client procurement departments (or their consultants) can insist upon as much as 1,850 or even 2,000 hours as the base that agency staff should be working on clients!  What they’re effectively asking is that their agency don’t take holidays (or work through them), don’t get sick, and that all administration, staff development and new business is done on the employees own (already over) time.

It’s not sustainable, the biggest cause of agency staff turnover, and in the long run not conducive to the marketer getting great service or great work.

4. Not getting the agency their Purchase Order in a timely manner (or not factoring the delay into the deadline)

The client Procurement or Finance department writes into the contract that the agency cannot commence work until they are in possession of a purchase order (or worse, they can’t submit an invoice without one).

And yet that same procurement or finance department creates a system and process bottleneck that means the agency is waiting a week or more.

So what happens?

The agency waits, and now doesn’t have enough time to properly meet the deadline and the quality of the work suffers.

Or, the agency does the right thing by the marketer (especially if it’s a tactical execution where the window of opportunity is small) and starts on the brief straight away, leaving itself exposed to breaching the contract, and not getting paid.

That’s no way to treat any supplier, much less one usually told they are a respected strategic partner.

If the client can’t fulfil their end of the bargain, there must be an alternative process written into the contract that gives the agency protection and allows the client to meet their timeline. Or brief the agency earlier.

5. Procuring agency services in the same way as stationery

Working for many years in agencies and with TrinityP3, I have met and dealt with dozens of client procurement people.

The majority are well credentialled professionals who understand the distinctions between making different purchases. Unfortunately the minority (as is usually the case) give everyone else a bad name.

Agency services are different to most things procurement departments contract for because advertising can directly influence income, and should not be considered an “overhead” item on a company P&L.

As with anything, cheaper is not always better (although you can always find a cheaper option). It is that minority of procurement professionals who focus on cost and not value, and so give agencies a hard time.

I don’t know what the difference is in quality between a box of pencils that cost $6 and a box that costs $3, but I’m sure it won’t make a difference to meeting the goals and objectives of the organisation if the cheaper pencils aren’t fully up to the job and break more often.

But purchase the cheaper advertising option just because it is cheaper, only to discover that the experience and thinking you get as a result is not up to the job, will have a negative impact on the sales and profitability of the organisation, and is not money well spent.

Or worse, forcing the agency that can deliver the results you want to price match the cheaper option only de-values their offering and ultimately, the quality and value you receive.

Yes of course there are budgets to consider, but the wonderful thing about market economies is that most things are negotiable and an equitable common ground can be achieved.

Choose your agency first on the results they can deliver, and then negotiate a market competitive price. It may not be the cheapest, and indeed may be the most expensive option, but the most important consideration is getting the people, thinking, ideas and service that can deliver the marketing objectives of your organisation – quality and value – at a price that reflects that value.

These are just the first 5 – I am sure you can think of many more. Leave a comment to share your agency/client accounting gripes now.