Marketing Agency & Strategic Supplier Management

2012 ANA Financial Management Conference

2012-05-12T00:19:38Z

This year's ANA Financial Management conference was bigger and better than ever! Held at the Boca Hilton Resort in Boca Raton, Florida, over 550 enthusiastic marketing procurement, finance and agency attendees were treated to two and a half days of presentations and networking. Sopan Shah of Nestlé chaired the event and provided an excellent foil to the presentations in handling most of the Q&A sessions after each segment. His experience in managing one of the world's largest advertising budgets showed during each Q&A, and he was as classically "Swiss understated" as Nestlé are. Thanks also to our Business Director, Steven Wales, who as part of our co-sponsorship of the event opened the conference.

Of course I am sure that each attendee had their favorite sessions and the points below were ones that, with our focus on marketing agency management, were of specific interest to me or stimulated conversation during the breaks. I will look to add to these in subsequent posts as the amount of content delivered at the conference was enormous.

Accountable compensation

Jockey and their agency TPM delivered a well prepared and thought provoking discussion on their journey down the road of what they term "accountable compensation". This program features a "zero profit" methodology which holds back profit until the previously and mutually agreed end-of year measures of performance have been achieved. Although not revolutionary in that it uses the standard incentive compensation methodology of balancing business objectives, brand objectives and client/agency performance evaluation results to calculate the agency profit / bonus, Jockey and their agency have partnered to develop an almost unique program which compels both the marketing team and the agency to achieve success in order to secure an appropriate financial return. The program is relatively new and is sure to be watched closely by marketers and agencies alike.

Agency Objections?

Interestingly, in listening to subsequent conversation with attendess from other agencies, there was vociferous objection to the idea of holding back 100% of agency profits until the end of the year. The increased pressure to manage cash flow in this model was seen as unfair. Interestingly, the Coca-Company who perhaps lead the market in terms of agency compensation models, seem to have balanced this aspect in a more equitable manner by increasing the frequency of payments to the agency to assist in managing their cash flow requirements.

The rise and rise of Scope of Work

If there was one reoccurring theme that emerged during the conference, it was the rise in importance of a tightly defined Scope of Work. Jockey and TPN, for example hammered hard on this theme recommending that SOW management needs to clarify the nature and complexity of the work to be undertaken and how the agency should staff to achieve these goals. It would seem that the fee-based model that now underpins the base compensation for most client-agency relationships mandates a more tightly defined SoW. Interestingly though Jockey and TPN revealed that this does not impinge on the flexibility of the marketer and agency to easily swap work in and out during the year, as long as the total budget is not affected and the work is of roughly the same complexity. This parallels our experience where we see clients wanting clarity upfront on how the proposed budget will be spent, but not wanting to overburden marketers with constant revisions to the SoW during the year, as long as the top line budget is not affected and the changes don't do not cause "scope creep". Where the total budget does change, the scope does need to be amended of course and this requires a system to easily allow versioning of scopes and many marketers lack this functionality in their current tool set.

Welcoming the Junior Partner

Probably the most anticipated speaker was chairman of the WPP holding company, Sir Martin Sorrell. A consummate business person with a famosly formidable intellect, he was also possibly the most entertaining speaker I have heard at an ANA event, in a classically British style. He gave us a real insight into the world of the holding company, and his referenece to the positioing statement "a partner, but a junior partner" gave a focal point for later discussions. Perhaps too often we hear the term partner being bandied around, when everyone knows that the client-service provider dynamic is an asymmetrical relationship. His positioning was perhaps far more realistic but at the same time does elevate the agency to being significantly more than a supplier.

Talent, talent, talent!

Sir Martin also emphasized that his role is fundamentally to "develop and deploy talent". This nails the point that great strategy and creative can only come from great talent. Given Sir Martin informed us that he comes from a financial, not marketing, background, this gives everyone hope that procurement/finance can assist marketing in getting the most appropriate talent on each part of the business (at the optimal cost), with the aligned goal of building a stronger brand.

The ultimate bean counter?

Finally my favorite line of the conference (and apologies to Sir Martin if this is a slight paraphrase) "if you want to insult me, call me just a bean counter...then again if I am going to count beans I would rather count more of them". With group revenues of $18 billion I would like to nominate Sir Martin as the bean counter that bean counters all over the world can aspire to emulate!

Thanks to the ANA

As ever we cannot thank enough the ANA for their seamless conference management skills. Their team are the unsung heroes of the event and we at Decideware would like to extend a HUGE round of applause for this years event!!!

Author: Richard Benyon (Decideware)

Decideware named as a Gartner "Cool Vendor in Marketing, 2012"

2012-04-04T01:15:26Z

Cool Vendor Reports

We would like to thank Gartner Group for including Decideware in its latest "Cool Vendor in Marketing, 2012" report published April 3rd.

This is the second Gartner Cool Vendor report Decideware to feature Decideware - previously we were named as a "Cool Vendor in Procurement and Finance". This new report highlights the work we are doing to help large advertisers make substantial improvements to their marketing procurement discipline to attain spend and process efficiencies.

Key Quotes

Kimberly Collins, a leading analyst in the marketing arena, summarized her findings in an insightful phrase "Decideware helps CMOs make investment decisions".

She sees our work in the context of growing recognition by senior marketers of the importance of optimizing marketing value and the need to invest in that objective, "Decideware provides a next-generation MRM capability that helps CMOs and their advertising functions better manage their agencies and measure agency performance".

Managing the spend with marketing agencies is well known for its unique challenges, which have not perhaps been well addressed by technology vendors until now, as supported by this quote:

"However, MRM solutions do not support the level of agency management, performance assessment and skills alignment that is the hallmark of Decideware's solution."

Finally Gartner make this recommendation: "CMOs and marketing leaders with large advertising budgets and extensive agency relationships and dependencies should consider Decideware for its agency management solutions."

Author: Richard Benyon (Decideware)

Decideware to assist in ANA webinar: Improve Your Scope of Work Program, Wed 28 March 3pm Eastern

2012-03-18T23:00:59Z

Decideware is proud to be assisting the ANA to deliver the webinar Improve Your Scope of Work Program, on Wednesday 28th March 3pm Eastern - as part of a procurement series targeting their membership.

The ANA states, "In this webinar, Diane Gibbons, Director, Agency Management Global Procurement and Operations - Pfizer, Inc. and Richard Benyon, CEO - Decideware Inc will explain how marketing procurement / agency management professionals can design and implement best-practice scope of work techniques to achieve great results. Diane and Richard will help participants understand how to combine process and systems to achieve a pragmatic Scope of Work program that allows marketers to clearly articulate what they are looking for, delivers agencies greater transparency to help develop their resourcing estimates, and provides procurement / finance with a clear picture of the cost and value drivers that underpin the client / agency financial relationship."

Details of the program can be found, here:

http://www.ana.net/webseries/show/id/PRO-328

More Gain Less Strain, Optimizing Marketing Partner Performance and Value in a Digital World

2012-02-06T03:21:10Z

More Gain Less Strain, Optimizing Marketing Partner Performance and Value in a Digital World is a recent report produced by the CMO Council resulting from research conducted in late 2011 including qualitative interviews and qualitative surveys with 250+ marketing leaders.

The report sheds light on those issues most concerning CMOs and includes insightful thoughts from leaders in the field and a strong indicates that the marketing shift to digital, social, and mobile channels is significantly impacting agency relationships, compensation models, and use of marketing technology and measurement systems.

In particular, the factors contributing the most to stress and strain in client/agency relationships were identified, as:

Lack of an agreed-upon set of analytics and metrics that defines success and failure
Limited knowledge and comprehension of the client’s business
Lack of value-added strategic thinking
Pricing and budgeting issues
Integration of marketing plans and services

Examples of the quotes, include these:

“I think the most successful client / agency relationships are based on clear objectives, collaboration, open communications, and mutual respect. I think that in many cases, clients have a tendency to change agencies as a solution to their business challenges, but it can be much more effective to work to get
the most out of current agency partners.”

John Costello, Chief Global Customer and Marketing Officer
Dunkin' Brands

“The advertising industry and the connection with consumers are continuing to evolve. It’s important to evolve your relationship with your agencies, as well as the services that they provide. From an external
environment standpoint, a lot of that continues to push the evolution of the agency and the
client relationship.”

Steven Schiller, Senior Vice President, Global
Sweets & Refreshment SBU
The Hershey Company

Note, advertisers wrestling with that most common issue, ie "a lack of an agreed-upon set of analytics and metrics that defines success and failure" should contact us on E: sales@decideware.com for advice on how to design and implement a first-class agency evaluation program.

Decideware profiled in Spend Matters procurement blog

2012-01-03T05:06:23Z

Decideware was profiled in a late December 2011 post by procurement expert and influential blogger Jason Busch at Spend Matters.

Writing about the importance of category-specific technology for managing supplier performance, Jason highlights Decideware in the Spend Matters blog as an example of a vendor specializing in SPM and relationship management for marketing.

"They've built a unique platform that really bridges the gap between what an agency of record does and how it reports to and engages its clients over time -- and of course the other way around as well. Most important, it puts category managers for services procurement in this complex category in the relationship driver's seat." writes Jason.

See the article here:

http://www.spendmatters.com/index.cfm/2011/12/22/Seven-Reasons-Complex-Services-Spend-Is-Difficult--and-Unique-Part-2

Four Best Practices to Improve Supplier Performance Scorecarding

2011-12-16T02:44:34Z

Effective supplier performance management is more than just the best KPIs. In fact, many performance management initiatives within the supply chain are unsuccessful because they do not measure the correct data, collect it accurately or communicate it with suppliers and other internal departments.

Here are four strategies to focus on when creating--or fixing--your performance management program.

1. Align business initiatives with scorecards
To figure out which KPIs and which suppliers to focus on, meet first with the executive team to determine what the main goals of the business are. Find out where improved performance will actually improve the business’ bottom line. Then, you can take a step back and develop scorecards that will benefit your business.

2. Establish how you will evaluate performance and communicate
The next step is to determine your thresholds for both excellent and poor performance. Before working with suppliers to improve their performance, you must internally set what your standards are going to be. When will suppliers be rewarded? When will you disengage with poor performers? Decide this before you begin working with suppliers.

3. Communicate with suppliers
From initial contact to the SLA to contract re-regotiations, performance mangers need to communicate with suppliers regarding performance expectations. Communicate and open dialogue will help both sides - suppliers will know what to expect and where they need to improve to succeed, and performance managers will learn what’s working for suppliers and what’s not.

4. Communicate internally
Performance scorecard results are useful for other supply chain departments, but information visibility is necessary for this to take place. Internal visibility will allow for collaboration between performance managers, and other stakeholders as they attempt to decrease the supply base’s susceptibility to natural and financial disaster.

For more on this discussion, check out this blog post: Four Best Practices to Improve Supplier Performance Scorecarding.

And check out the buyer's guide.

For more advice and assistance about developing screcards for your strategic supplier assesment programs, contact sales@decideware.com

Author: VJ Ratnam, Decideware

Decideware sponsors Agency of the Year category, B&T Awards 2011

2011-11-27T20:30:54Z

Decideware is the proud sponsor of the Agency of the Year category of the B&T Awards 2011.

Celebrating excellence across the Australian maketing landscape the prestigious B&T Awards are an eagerly awaited annual event.

Decideware is particularly proud to sponsor the Agency of the Year category given that we help many advertisers in Australia, the US and the EU to assess and manage their marketing agency relationhips and performance.

See more information at the awards site, here:

http://awards.bandt.com.au/

ANA Masters 2011 - Growth, Building Brands & Driving Results

2011-10-25T03:10:51Z

ANA Masters of Marketing Conference

Oct 20-23, 2011

The theme of the 2011 ANA Masters of Marketing conference was "Growth, Building Brands & Driving Results." However, from my perspective, the theme should have been Challenging, Great Content, Powerful Networking.

The conference was held at the JW Marriott Phoenix Desert Ridge Resort & Spa, from October 20-23. The facility was perfect, the food was great but the content and contacts were powerful. From the opening remarks by ANA President, Bob Liodice, to the over a dozen CMO's who shared their expertise and the many hours of networking, this conference was packed with information.

Here are a few key quotes from the conference speakers:

There are now more mobile devices in America, then there are Americans. ~ Google

The integration of the agency into the day to day of our business is critical. ~ Esther Lee - AT&T

In order to thrive in a Hyper-Connected World, average is no longer an option. ~ Thomas Friedman - New York Times

Feed your brain - All new ideas are the mashing together of old ones. ~ Dana Anderson - Kraft Foods

If your company or brand were to disappear today, would the world be a different place tomorrow? ~ Jon Iwata - IBM

We're shifting from the information web to the social web. From links to connections. ~ Sheryl Sandberg - Facebook

You have to trust your Agency! ~ Bryan Reese - Bolthouse Farms

I hope these quotes give you a brief glimpse of the powerful conference that was the ANA, Masters of Marketing.

Author: Steve Wales (Decideware)

Decideware supports 7th CIPSA Annual Conference - Risky Business

2011-10-17T04:54:00Z

Decideware exhibited at the very successful 7th CIPSA Annual Conference, entitled Risky Business in Melbourne last week.

Featuring 12 keynote speakers, 30 seminars, 6 pre-conference workshops and the annual Procurement Professional Awards, the conference was the biggest yet attracting - close to 1,000 procurement executives.

Globally, we see growing interest in the discipline of Strategic Supplier Relationship Management (SSRM) and we had many interesting discussions with procurement executives about software to manage strategic supplier assessment, scopes of work and rosters.

A key theme to emerge from the conference was the rapid growth of the procurement discipline and the maturing of approaches to manage strategic suppliers, as opposed to traditional SRM methods to assess the bulk of non-strategic suppliers.

There is a real understanding now that strategic suppliers need a specific assessment program and enabling tools to help procurement teams and their business unit stakeholders to measure and manage great relationships and performance.

We congratulate the organisers on an excellent program and the PP Award winners for their efforts to raise the standard of procurement practices in Australia.

Author: VJ Ratnam (Decideware)

Understanding your agencies' capabilities

2011-10-10T19:57:00Z

One area in which we are seeing a rising level of interest is Capability Management, where large advertisers are seeking to capture the intellectual property of what specifically their agencies can do for them (i.e. the services they provide and areas they specialize in).

In the past this information has generally resided in each marketers' head, but with the involvement of procurement and the desire to optimize the portfolio of agencies, organizations are now looking to formally capture and utilize this data.

Why do it?

In many cases the goal for the advertiser is to ensure that they are working with only their best agencies. This often allows them to reduce the number of agencies that engage with, which of course helps optimize costs, and also allows them to reward the agencies who are performing best, and who may well have additional capabilities.

As with other areas of organizations where Customer Management and Supplier Management have provided valuable insights, this new discipline of Agency Management has every chance of replicating those success stories by using similar processes and tools.

They also finding it a useful screening mechanism for new agencies who are looking to engage with them. He can be very difficult for clients to handle the constant stream of new business requests, and now looking for ways in which to streamline the collection of data and the decision-making process as to whether a new agency could be potentially used by that company.

What has happened in Direct supply?

So in many ways this mirrors what has happened in the direct supply base over the last 10 years, where specifically manufacturers have found that working with fewer (but better!) suppliers, not only delivers better product (through enhanced quality control), but also reduces their cost of doing business.

However, unlike direct supply where suppliers can readily provide information about their parts or services that they offer, there are not as many formal processes in the marketing environment as yet.

This means that the leaders in this particular area are forging a new path and in many cases learning as they go. We will be keeping a close eye on developments in this area and provide some follow-up posts on this topic in the near future.

Author: Richard Benyon (Decideware)