eve reiter chair, agency relations committee – association of …€¦ · chair, agency relations...
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Eve Reiter Chair, Agency Relations Committee – Association of National Advertisers VP, Marketing Category Mgmt/ Agency Relations, American Express
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Top 50 agency companies = $69b revenue globally, +12% in 2011 US = +9%; non-US = +15% Big Four = two-thirds of total revenue
Overall US Agency Revenue = $33b, +8% in 2011
Outpacing 3.6% growth forecast for media spend Digital ($10b total revenue) growing 2x speed of overall business
Source: Advertising Age “Not so Slow Recovery: US Agency Revenue Surges Nearly 8% in 2011” – April 29, 2012
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TV Digital Mobile Other
41
25
8
26
42
19
1
38
Consumer Media time
Marketing Budgets
-6%
-7.5%
+12% +1%
(Print, Radio, OOH) Source: Advertising Age “Martin Sorrell on Procurement, Enfatico, and the $20b Digital Opportunity” – 5/7/12 by Francois Durand
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Earned
Paid
Owned
Channels you pay to be in: • Online Advertising • TV/ iTV • Print, Radio, OOH • Direct Marketing
Channels you own and control – i.e. • Website or Blog • Mobile App • Facebook page • Twitter account
Attention you earn through customer interactions: • Social Marketing • Word of Mouth • Blogger Outreach • Public Relations
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Large, traditional full service
Mid-size Full
Service
Production
In-house
Strategy
Specialty
Mid-Size Digital
Increased use of in-house for simpler work for process and cost efficiencies
Specialty agencies are in demand for – • Digital/ social/ mobile • Reaching segments – ie. millenials • Specialized strategy work
Marketers are using new agencies for certain projects, for increased specialty expertise, fresh perspectives, and speed to market
IT services
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Billboards
Gaming
Interactive TV
Tablets
Computers
Mobile
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Example of a slide with a subhead Set the slide title in “title case” Set subheads in “sentence case” Generally set subhead to 36pt or smaller so it will fit on a single line The subhead color is defined for this template but must be selected. In PowerPoint 2007, it is the fourth font color from the left
Preferences Channels/Devices
User Experience
Content
Geographies Customer Service
Digital Marketing Platforms (DMP) will enable convergence by managing information to provide the right content, experience, product or service for the customer
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Digital has been a benefit from a revenue standpoint Opportunity to enable convergence - help clients form more meaningful connections with its audience regardless of channels or mediums Holding companies can help clients leverage synergies and best resources Scale to invest in new technologies/ data systems Global consolidation/ centralization New holding company relationships are being announced (ie WPP – MillerCoors and Bank of America)
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Scrutiny on Agency Compensation
Compliance Requirements
Growing Procurement
Role
Tight Budgets 65% of marketers plan to change their agency compensation this year*
• Rate benchmarking/ negotiations
• New compensation models
• Pay for performance
• Roster consolidation
*Agency Compensation Survey - Association of National Advertisers and R3:JLB Consultants
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Compensation Models: Salary + Multiplier (Overhead+Margin) Retainer (using hourly rates) Flat-fee Pre-negotiated Project Based Pricing Commissions (mostly used for media)
Pay for Performance Models:
Performance Incentives Value-Based
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Rates Project
Demand Process Overall Cost
Upfront briefing agreed to by decision makers Eliminate bottlenecks Clear roles/ responsibilities
Senior oversight Clear quarterly or annual scope Avoid scope creep
Simple and transparent methodology Single point of contact for fees
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Consider having a “lead agency” for multi-agency projects
Client/ agency should assess what did/ didn’t go well on each campaign
360 feedback 1-2 times per year – agree to 2-3 key action steps
Ensure agency employee recognition and empowerment
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Q & A