St John’s Wood was developed in the early 1800s as a genteel London suburb, with low density villas as opposed to the terraces familiar in the East and South of the Capital. As such there would have been plenty of business for ostlers (or stablemen) and ready employment for lamplighters who strode along the streets at dusk and dawn with the long poles that were the tools of their trade.
Of course both occupations have long since disappeared. As I walked briskly yesterday afternoon from Lord’s to the Tube at the end of the ISBA Conference, I fell to wondering if admen and marketers could suffer the same fate.
This was ISBA’s 25th Annual Conference. In years gone by the relationship with agencies would have been a key agenda item. Prominent agency leaders would have been speaking. Marketer delegates would have felt like ‘clients’. How very different this March. As snow flurries freshened up the Nursery Ground, agencies were conspicuous by their absence from the agenda – nor were there many agency attendees.
In the morning, delegates were regaled with presentations on EU regulation, newspapers, social media and brand purposing. We saw ads, but they were mere illustrations (and mostly unattributed) from EffectiveBrands, a marketing consultancy firm dedicated to taking their clients global.
Isn’t that what BBDO, McCann, Ogilvy and co used to do? Of course it was Ogilvy who were responsible for the legendary Dove case history. Sad therefore that in the EffectiveBrands presentation their ads were shown but not credited to the agency.
If the morning had been awkward viewing for sensitive agencies, the afternoon was hardly a comfort blanket for the legion of marketers in the room. First, any complacency would have been blown away by the performance of this year’s crop of Marketing Academy students (mainly 30 somethings from clients and agencies). Not only were their communication and presentation skills ahead of what their seniors managed earlier. Their message was encouragingly and chillingly clear:
• The role of marketing needs to be redefined to deal with its many critics
• Marketing has to be seen to be ‘doing the right thing’, rather than just push products and services. A moral code is needed
• The talent pool needs to be urgently refreshed with people with more diverse backgrounds and experience.
Then we heard from a panel of seasoned marketers who had made it to the Boardroom – no mean feat, given that only 40 of the FTSE Top 350 companies have a marketer on their boards. Were these super-successful ex-marketers reassuring about the profession that had been their pathway to glory? Absolutely not. They were also worried about the talent pool. They criticised marketers who were full of jargon and short on numbers and accountability. They said marketers were often un-cooperative and not on the right agenda. They want marketers to be more widely experienced – preferably in consumer-facing roles. They said that marketers should have a single-minded focus on driving sales and top line growth. They encouraged marketers to pick up experience internationally, so they can learn new things and become less insular. They bemoaned the loss of so many of the old ‘marketing universities’. Steve Langan spelled it out: ‘marketing is a tool to an end, not an end in itself’.
It’s a tough environment for both agencies and clients. We all know that. What I took out of the ISBA Conference was that neither can take the security of their position in the world for granted. It is now apparently open season to talk about marketing communications and say little about agencies. Also for both the new generation and those with years of experience to talk about the future of marketing in much less than admiring language.
But there’s always hope. I suppose ostlers graduated to work in garages, while the lamplighters were the forerunners of today’s energy companies!
Last summer I made one of the toughest decisions of my life: that my company AAI would turn its back on the conventional way of conducting agency pitches. I believe it was a great decision. But it was not an easy one.
Because making difficult decisions is one of the crucial tests for any decision taker, I thought it might be helpful to share the story.
By July 2012 AAI had been advising clients on finding new agencies as a specialist consultant for exactly 24 years. AAI had an established reputation across many countries as a state of the art facilitator of agency pitches. Running pitches was roughly 75% of our revenue stream, and our methodology was well known and accepted by advertisers and agencies alike as the default setting. Rival consulting practices and numerous advertisers across the globe had followed our lead.
Yet we made the announcement that we were no longer prepared to handle pitch assignments if it involved agencies giving away creative work for free. Why make that change, when we had been closely involved in organising such contests for many years?
First, and importantly, I emphasise in my book Decide (to be published by Kogan Page in February) how vital it is to make formal choices by establishing robust criteria, and sticking to them. At the outset of a pitch, all our clients work with us on deciding which boxes the agency of their dreams needs to tick (the criteria and sub-criteria). No client in our experience has ever been brazen enough to stipulate that their agency choice should be based largely on which agency provides the most plausible free campaign in the shortest number of days!
Secondly, we recognised that there had been a significant and continuous slippage from what was the custom 30/40 years ago – agencies offering just an indication of a possible solution – to effectively providing complete free campaigns.
We were also influenced by four salient facts:
1. The first is the research carried out by the ISBA/IPA steering group (of which I was a member) on the Good Pitch initiative: only one in five of the campaign ideas that win pitches ever runs for real. That means four out of five fall through clients changing their minds, or at the research hurdle. And that’s just the winning agency’s idea. If six agencies make speculative creative presentations, five of those ideas are destined for oblivion anyway.
2. Academic evidence is clear that picking a winner from exceptional candidates is a demanding and specialist skill, which requires both strict criteria setting and a healthy dose of gut feel. The AAI casebook – over 24 years – shows no correlation between the ability to create instant magic and forging productive long-term relationships. Some agencies are particularly successful at winning pitches. Others have an enviable record at long term stewardship. We can find no evidence of a link.
3. We researched a wide spectrum of other professionals (including lawyers, accountants, management consultants, architects, surgeons and consultants), also service providers as diverse as defence contractors, caterers, and kitchen designers. No one gives away IP, or offers for free what they should be selling
4. We believe that the movement to raise ethical standards in public life (politicians, media owners, company chiefs, bankers) is unstoppable. We have spoken to several senior marketers who would prefer a less lavish, more practical and more effective way of finding new agencies.
There is a strong case for marketers, procurement professionals and agencies to try something different: a pitch process that is:
• Faster (target 5/6 weeks maximum), much less expensive for everyone, with fewer agencies involved
• Dependent not upon final presentations of speculative creative work, but creative work done for the agencies’ clients (with results), reputation, track record, people, fit and strategic alignment
We called our new process Mutual Decision™. The name reflects the fact that there are two decisions at the end of every pitch: the client’s to appoint a new agency, and the agency’s to take on a new client.
Mutual Decision™ is designed to be a far more effective way of forming a productive long term partnership, because it is based on mutually relevant criteria, not one side putting the other through a creative beauty parade, largely to the exclusion of more important considerations. It also provides for two other vital elements of any professional partnership – a proper induction period, and ongoing – and two-way – evaluation of the quality of the relationship, and the productivity engendered.
It was a difficult decision to change our business model so fundamentally. But for me, having just written a book on making better decisions in a better way, it would have been even more challenging to carry on recommending an agency selection system that is not only costly and time-consuming, but also relatively ineffective and ethically questionable.
Read MoreThe procurement function gets a lot of stick.
Organisations that supply services to big client companies (especially agencies) frequently complain about that they see as mean procurement departments. ‘They beat us up on price’. ‘They make us jump through all sorts of hoops’. ‘They impose tough payment terms on us’.
I’ve been known to say the same sort of thing myself!
But there’s a big truth out there: procurement’s job is to buy raw materials, goods and services for their company, and to do it selfishly. That’s because we all buy selfishly. We want things on our terms, at the lowest possible price, provided the quality is OK. The language is littered with sayings and aphorisms to underline this point.
“They are so desperate for the business, they’ll drop the price in the end”
“Never pay more than you have to”.
But the buyer can be sceptical too.
“No such a thing as a free lunch”.
“Pay peanuts, get monkeys”.
It is unrealistic to expect your commercial equation to defy the laws of gravity – whether you are an agency seeking a higher fee, or if you are trying to sell your house in a depressed market. Buyers will be buyers. But the other side of the coin is rather less obvious. If you want to be a success in sales, you can’t sell selfishly. If you sell what you want to sell, at the price you want to get, on the terms you insist on, you are likely to have very limited success.
That’s because we have to sell generously. We need to work out what people want to buy. We have to allow people to choose. We must get the pricing right. We are obliged to offer terms the buyer will accept.
Yet so often, we come across ungenerous sellers:
• The take it or leave it mentality
• Agencies that tell the client there’s only one creative solution, only one photographer, only one director
• Inflexible media deals, that aren’t deals, precisely because they are inflexible
• The used car that’s too pricey, or the house seller that won’t drop their price
Selfish buying demands generous selling. Hard-nosed buying makes sense. Hard-nosed selling makes none. Unless you are very tough – or very, very good.
Read MoreYou don’t have to look very far to find casualties of the downturn across
the Northern Hemisphere. Countries, regions, cities, industries, businesses,
families, individuals have all suffered from the consequences of economic reverse.
A developed, prosperous world has turned sour. Older people have no comfortable
retirement to look forward to. Those who should be in the prime of their working
life are either out of work or struggling. A generation of young have no
workplace in which to use their hard-earned education. So problems have become
the staple diet – for supra-national bodies, for countries, for the business
and public sectors, in homes……everywhere.
Consultants and advisers are queuing up offering to solve the problems
that management and internal teams are wrestling with. Before long there will
be more hot desks at Regus than work stations in company offices.
Communications agencies seem to be multiplying as production levels of
problem-solving ideas soar.
Is it the destiny of the developed world to identify problems, and solve
them?
I hope not. And really believe it is not the way to go. Problem solving
is plumbing by another name. The higher order activity is to spot opportunities
and realise them.
Opportunities are the gateway to innovation and growth. When I
interviewed high achievers for my forthcoming book Decide (to be published by Kogan Page in February), they all told me about the opportunities that helped to change their lives. Many about the opportunity they saw to change the lives of others. A solved problem, unless it gives rise
to an equal and opposite opportunity is a closed box or a finished crossword. A
realised opportunity is a launch pad.
As we all look for a better 2013, let’s change focus. The priority is not
to fight to be allowed to tackle problems which, in the majority of cases, have
been defined by others. The challenge is to look for opportunities which we can
capitalise upon ourselves, or help others to bring to fruition.
Read More
For a business built around vocabulary, advertising is beginning to struggle with its own semantics. We seem to be saddled with the cumbersome ‘marketing communications’ to embrace the expanded suite of ways in which paid communications can impact consumers and other target audiences. It really started with direct marketing and sales promotion, which demonstrably weren’t advertising, in that they weren’t delivered via the traditional media. And PR which was, but on an earned, not paid basis.
Now there are so many more activity areas: sponsorship, digital, content, events, guerrilla, buzz, social and so on. Is ‘Marketing Communications’ the correct cover-all. Or can we make a case for using the word ‘Advertising’ – albeit in an expanded and differentiated context. That’s what the late great Steve Jobs thought. He reckoned that anything the brand did was advertising.
If you are promoting a brand, an organisation or a cause, that’s advertising in a real sense. The collateral vocabulary supports that view. We are admen or adwomen, working in adland, making ads – not adverts please. We have paid our admission fees. We are addicted to our way of life. We are fuelled by adrenalin. It all adds up.
Read MoreBernie Ecclestone said this in an interview last November: ‘I think Europe is finished. It will be a good place for tourism but little else. Europe is a thing of the past.’
The back story was about Ecclestone’s determination to change the shape of F1 by holding fewer GPs in Europe, and more elsewhere. But his words grated with a lot of people on a far broader front. People who believe Europe is absolutely not finished. Struggling maybe. Certainly not in great shape.
But still the cradle of our civilisation. Still rich in culture and invention. Unbelievably diverse. Impossibly beautiful. Incredibly, spectacularly wonderful. And a great place to grow up, live, love, work and prosper.
Luckily advertising folk read what Bernie wrote and decided to fight back. The way the ad world does. With insights, ideas, ingenuity and professionalism. The EACA (European Association of Communications Agencies) is the body that embraces all the national advertising communities of Europe.
Today in Brussels, as the continent’s creative cream gather to celebrate the Euro Effies (effectiveness awards to you and me) EACA President Moray MacLennan, Worldwide CEO of M&C Saatchi, announced an initiative called “This is my future”. He also unveiled an initial TV commercial idea.
The official statement from EACA says, ‘The initiative is designed to inspire 500,000 new start-up businesses over the next three years. Based on the average value-added per micro-business, this would deliver a gross added value of €33 million and nearly two million employed positions to the EU. The campaign will be supported by a budget of €2.2 million to be funded by private enterprise, venture capital and contributions in kind from partners’.
So Ecclestone made a highly negative pronouncement, which caused much consternation and a considerable problem for what had started to look something of a beleaguered region. Europe’s ad community saw not so much the problem. More the opportunity. Their response: the whole ambitious “This is my future” programme.
It all goes to prove one of my favourite beliefs: opportunities are far more important than problems.
With a problem, you are left with sorting out the plumbing. Even if you manage to solve it, you are often no better off than before the problem emerged.
Opportunities are infinitely more powerful. There are two higher order tasks: identifying them, and realising them.
Go for it, EACA! You’ve spotted the opportunity. Now it’s up to us all to help you turn it into reality.
Read MoreThe lead story in the latest edition of Campaign (29th June) is about Lloyds Banking Group allegedly calling a pitch on a project called Project Verde. In the first paragraph the journalist Anne Cassidy says, “Lloyds has called a multimillion-pound pitch to create the advertising to support the launch”.
I think the quote is very interesting from two aspects: the pitch (not the assignment that follows) being multimillion-pound), and the assertion that the pitch (not the relationship that follows with the winning agency) is to create the campaign.
I have no knowledge at all whether the story itself is true, or whether the idea is to create the campaign at the pitch itself. I can easily understand that the campaign would cost a few bob, and that the agency list would be on the lines of the quality mixture of established players and newcomers listed.
LBG and the agencies (if they are indeed under consideration) are consenting adults. It is a free country and an open market between clients and agencies. My question is more generalised: should it be the function of a pitch to create a launch campaign? Or would it be better for our industry if clients chose agency partners on the basis of track record, reputation and people – and then briefed the winning agency to create a campaign within a working commercial relationship?
At AAI we started the Mutual Decision™ initiative to try and promote quicker, less expensive, more effective, and less exploitative pitches. That is because we believe that agency/client relationships are likely to last longer, and be more productive and successful if they start that way. There is no evidence that agencies who are good at speculative creative sprints deliver more value over the long term. There is conclusive evidence that around four out of five “winning campaigns” fail to reach the marketplace, also that the cost of big pitches is massive.
Read MoreI liked that Pret A Manger promotion for the Diamond Jubilee: “Keep it clean for the Queen”. Simple call to action. Positive CSR from a popular brand.
People say that the Jubilee was a rehearsal for the Olympics. But was it? Hardly. Just four days with almost everyone on holiday. The Olympics plus the Paralympics are going to last for over six weeks, admittedly with a gap in the middle. Apart from weekends, and annual holidays, everyone will be at work.
LOCOG has consistently assured us that London can manage – offices and businesses, the educational world, LRT, the rail network, the roads, the health and emergency services, utilities, retail, restaurants, cafes, the entertainment industry, communications of all sorts. But can they? Will they? Will London be able to cope with the direct inflow of people for the Olympics and Paralympics, over and above the millions of tourists that come here every summer? Oh yes – and there’s us – the people who live and work here.
I’ve started to listen to my tweet-mate Vince Cabbie. I was critical of him in the coalition, but now he’s thinking of quitting politics to become what I call a full time taxidermist (taxi driver who’s continually getting stuffed). He talks a lot of sense. He says the road system is in the worst state ever – in terms of road works, obstructions, diversions, and all manner of restrictions.
Today – two days after the Jubilee – the Mayfair / St James’s area was mayhem. It probably was everywhere else as well, but there was no chance to find out unless you went there on the Tube. Just imagine all that plus the dedicated “Games Lanes” and the 4000 BMWs to fill them, not to mention the parking restrictions. Remember the embarrassing lack of loos we saw last weekend, with the massively increased demand (if that’s the word) the Games will bring. Think about the effect of additional security, necessary as it obviously is.
How will people get to work, or school or college? Get home? Travel about town? Be on time to pick up the kids? What about restaurants, theatres, and all the venues that have to keep to time? How will husbands and wives, partners and friends, families and mates reach each other?
My slogan – for now right through September – is even simpler and more far-reaching than Pret’s. It is “Keep London Working”. I appeal on behalf of us all, our visitors, and our long-suffering city, for all branches of Government, Boris’s praesidium, the Met, the Armed and Security Forces, Fire and Ambulance authorities, the borough administrations and LOCOG to work together and take a long hard look:
• How bad could it get?
• What is the worst case scenario in each element of infrastructure?
• Are there any interventions and schemes that might make things better?
• Are there any decisions already taken that could profitably be reversed?
I’m not criticising the decision to bid for the Games, nor the huge effort that has gone into making it all possible. But I do worry that chaos and crises could do a lot more than knock the gilt of the gingerbread. There are so many clever people in London. So many of them could make a contribution to keeping the show on the road. I believe the authorities would do well to invite some of them to help – including those in our marketing and communications community for whom problem solving is one of the core skills.
For me it is equally as important for those who live and work in London to be able to carry on as normally as possible, as it is for us to look after and protect our visitors.
This is not as realatively remote as the Eurozone crisis, Afghanistan or Syria. This is here. This is now. Keeping London working is paramount. It won’t happen just because we want it to, as Vince would probably say.
Read MoreI always worry for people who hire Max Clifford. Not because he isn’t an effective publicist. He clearly is. It’s just that when someone you’ve never heard of engages Clifford, you know that Max has immediately become the story. It is a bit like that with Robert Jay of Leveson Inquiry fame. And I mean fame. He’s the star – the Perry Mason, the William Garrow, the guy in the John Grisham novel. Jay’s voice, his whiskers, his encyclopaedic grasp of dates, documents and potential misdeeds are Leveson to most of us.
So I felt a bit uncomfortable last week announcing Mutual Decision TM, AAI’s proprietary new pitch system. Pitches belong to the clients who want new agencies, and the agencies who want new clients. So why is a mere consultant launching a rival to the tried, tested, and traditional way of doing things? You know, RFIs flying out to dozens of agencies, more chemistry meetings than chemistry classes at school, a brief inviting five or six agencies to compete for the Golden Apple by preparing a free campaign, more iterations by the finalists, two rounds of research and three to four months entertainment for all.
The truth is, it may be the traditional way of doing things (albeit a relatively recent and substantially flawed tradition), and it has been tried often (not least by us, I confess), but it has tested badly. It is unnecessarily long drawn-out. It is nakedly exploitative. It is seriously expensive, not least for the client in terms of time and opportunity cost, and especially for the pitching agencies. Nor is there any evidence that a creative contest is a reliable way of developing the campaign the client wants to run tomorrow. Estimates vary, but most experts would settle for less than 20% of pitch creative going live.
Worse, there is still less evidence that this jamboree is a good prelude to a long and synergistic relationship. My analysis is that the process is too one-sided to segue naturally into a balanced partnership. Also in the four cases out of five when the winning shop’s creative has been turned down, the relationship kicks off with creative tension, probably exacerbated by the inevitable hassle over remuneration.
Mutual Decision TM is a new way of doing pitches, which is far more likely to find the right agency for the client, and the right client for the agency. It should deliver a productive relationship from a standing start. It is also much fairer, faster and less costly.
Sometimes you cannot afford to wait for the newsmakers if you believe in change. I very much hope that clients and agencies will choose to adopt our new way of doing things. That would be a win/win. OK, you’re right. If that happens, it will be a win for us too!
Read MoreIt was my favourite quote of last week, and regular readers will know how much I would like to see the infamous fee system (resource packages/FTEs) bite the dust – if only we can come up with something fairer and better. The fee system not only encourages inefficiency. It also has nothing to do with either deliverables or outcomes. It is purely an input measure, and encourages agencies to use bigger teams, at higher percentage utilisation, for longer periods – for no intrinsic benefit.
Intellectual heroes like Tim Williams of Ignition Group out of Salt Lake City (www.ignitiongroup.com) have been beavering away for years now, looking for new solutions, alongside innovative clients, agencies, and indeed consultants like ourselves.
But the quotation in the headline did not come from adland. It was from Lord Neuberger, the Master of the Rolls (Britain’s second most senior judge), and he was talking about solicitors. He said, ‘Businesses that base their charges simply on costs do not deserve to succeed, or even survive……Rather than treating time as the commodity which is being sold, we should be adopting an approach where skill and experience are the commodities which are sold’. And of course he is right – in the generality, and about any industry, like ad agencies, which was misguided enough to ape the solicitor’s business model.
Remuneration is back in the headlines – but for different reasons. The 7th May edition of Advertising Age has a disturbing article by Jack Neff on “nonworking media spending”, variously known as non-productive marketing spending. It is apparently a scourge which mighty advertisers like Unilever and PepsiCo are committed to reduce in favour of “working media”. The wasteful stuff is creative development and content creation. Working media spending is the money spent to run that content.
“Experts” have calculated that the target maximum for so-called nonworking media should be around 15%. To show how scientifically this figure has been arrived at, Mr Neff was told that it related to the old 15% commission level!
So the very companies that have been trumpeting the need for top level strategic and creative input from their agencies are now allegedly trying to reduce creative and content costs and devote the saving to media and other delivery mechanisms. At the zenith of the space era, this would have meant NASA spending more on rockets and less on the satellites and space stations they were propelling outside the earth’s atmosphere. Misguided lunacy, in other words.
The splendidly named Jordan Bitterman, SVP Social Media Platforms at Digitas, says that so far from reducing nonworking media to 15%, ambitious companies in the digital arena should be looking at raising it to 50%, because earned media, followed by owned media consistently drives purchasing well ahead of paid media.
In a related development, several heavy-hitting companies (Miller Coors, Sprint, Bank of America and GM) have recently moved to a dedicated holding company model. Why? Was it for greater strategic advantage and creative firepower? I think not. Industry commentators are convinced it has been to drive even tougher remuneration deals. I bet they are right.
To return to the top of this piece, the wretched fee system has a lot to answer for. As long as charging for inputs is the default setting, the agency world is super-vulnerable. Lord Neuberger is even more on the ball than he imagined.