I have just read on Brand Republic that the UK Gym chain LA Fitness have signed a four-year profit-sharing deal with the celebrity Alesha Dixon. Her fee will be based on the success of LA Fitness over the four year contract period. It is rumoured that the highest amount (rumoured to be £3m) she could earn is three times bigger than the lowest fee (assume that this is a £1m).
I really like this reward and risk payment and I suppose in one way, that is why the old commission system work. If a piece of advertising works, then it runs and runs, and all the agencies involved in creating that advertising, benefit in the long term.
The key phrase there being long term. Perhaps it is a good time to start thinking about the current commercial models that are in place and see if there are ones that can financially reward all parties involved. What do you think?
30 November 2009
29 November 2009
Thursday part 2
I presented at the MandM Briefing on Thursday afternoon on Advertising strategies for the upturn. My fellow presenters were Guy Abrahams from ZenithOptimedia, Peter Walshe from Millward Brown and Nick Manning from Ebiquity. It was very well attended and we had a very panel discussion on topics such as measuring ROI, whose role is it to put measurement in place and the role of new technology in the media mix.
My bit was on the trends in the media world from a procurement / client viewpoint. I said that it was mainly focused on 2 key trends: Procurement is here to stay and (more) focus on Openability (not sure that is a real word!) and Accountability.
I thought that the whole briefing and panel discussion were good as procurement were seen as equals in the discussion topics and really able to contribute to the what is the future of advertising and advertsing budgets, and what we can do to help.
Copies of the presentations can be seen on http://mandmglobal.com/content/SocialNet/adknowledge/147896541236987453/198605334
My bit was on the trends in the media world from a procurement / client viewpoint. I said that it was mainly focused on 2 key trends: Procurement is here to stay and (more) focus on Openability (not sure that is a real word!) and Accountability.
I thought that the whole briefing and panel discussion were good as procurement were seen as equals in the discussion topics and really able to contribute to the what is the future of advertising and advertsing budgets, and what we can do to help.
Copies of the presentations can be seen on http://mandmglobal.com/content/SocialNet/adknowledge/147896541236987453/198605334
27 November 2009
Danish Pastries and Bacon Baps
Good turnout at the Iris Procurement Breakfast with very generous breakast choices ( I just had the fruit!).
Jane Dormer (Head of GB Procurement at Coca Cola) said that agencies should always look to invite their procurement clients into the agencies as soon as they are aware of the procurement person so they can understand the agency and what they are doing for the client. Totally agree. It happens as soon as a new Marketing person is appointed but not when Procurement are appointed (and we won't just look at the chocolate biscuits!).
She also touched on the new value compensation model that Coke have been rolling out globally and have just started to discuss with their UK agencies. It is about paying agencies on output / on their deliverables with zero profit. There is then a performance payment based on agreed measurement. This can be up to 30% of the agreed output level, and there are upper and lower limits on the output. I quite like the concept of paying by output and have worked with a few agencies that have used this model. My only observation is that it is the client 'dictating' the value of the output when all agencies work differently and is this bringing a degree of uniformity and standardisation into the commercial model ? Good food for thought though.
Tony Spong (Head of DM, SP & Integration (I think that is his title sorry Tony if it is not) from AAR) discussed the fact that a pitch is always a good time for the client to have a 'clear out from their garage' and use the pitch process and time to review how they work as a client. I really liked this idea as procurement can really help to evaulate ways of working and processes to make them more effectively and utlimately more efficient for all parties.
At Orange I worked with our contract publishing company - John Brown, to look at one page of amends and the costs that we had incurred. I then sent this information around to the marketing team for them to see. They could see that just by changing one word - what the impact on the timescales and the cost of doing that was. Quite powerful information.
Jane Dormer (Head of GB Procurement at Coca Cola) said that agencies should always look to invite their procurement clients into the agencies as soon as they are aware of the procurement person so they can understand the agency and what they are doing for the client. Totally agree. It happens as soon as a new Marketing person is appointed but not when Procurement are appointed (and we won't just look at the chocolate biscuits!).
She also touched on the new value compensation model that Coke have been rolling out globally and have just started to discuss with their UK agencies. It is about paying agencies on output / on their deliverables with zero profit. There is then a performance payment based on agreed measurement. This can be up to 30% of the agreed output level, and there are upper and lower limits on the output. I quite like the concept of paying by output and have worked with a few agencies that have used this model. My only observation is that it is the client 'dictating' the value of the output when all agencies work differently and is this bringing a degree of uniformity and standardisation into the commercial model ? Good food for thought though.
Tony Spong (Head of DM, SP & Integration (I think that is his title sorry Tony if it is not) from AAR) discussed the fact that a pitch is always a good time for the client to have a 'clear out from their garage' and use the pitch process and time to review how they work as a client. I really liked this idea as procurement can really help to evaulate ways of working and processes to make them more effectively and utlimately more efficient for all parties.
At Orange I worked with our contract publishing company - John Brown, to look at one page of amends and the costs that we had incurred. I then sent this information around to the marketing team for them to see. They could see that just by changing one word - what the impact on the timescales and the cost of doing that was. Quite powerful information.
25 November 2009
The replacement to Kelly's Directory
Went to the AAR End of Year Drinks party last night. It was great to see Kerry and Paul and lots of agency folk there.
Companies such as AAR (The Haystack Group and Creative Brief being the other two ones that I would also recommend) play an invaluable role in helping procurement and marketing know and keep up to date with the very complex and every changing agency market. Years ago (before the good old internet) I had to rely on Kelly's Directory (hands up who remembers that?). As Procurement we work alongside the process that they bring in managing all the commercial and contract elements of a pitch.
Companies such as AAR (The Haystack Group and Creative Brief being the other two ones that I would also recommend) play an invaluable role in helping procurement and marketing know and keep up to date with the very complex and every changing agency market. Years ago (before the good old internet) I had to rely on Kelly's Directory (hands up who remembers that?). As Procurement we work alongside the process that they bring in managing all the commercial and contract elements of a pitch.
23 November 2009
Malaysia - our fame is spreading
Just seen an article from the Malaysia press (http://biz.thestar.com.my/news/story.asp?file=/2009/11/21/business/5138912&sec=business)
Quite an interesting viewpoint from the author - Paul Loosley, with 2 paragraphs that stood out for me - shown below. Interesting re his view of the ad agencies and one I have to say that I do agree with. But re the 2nd extract I don't want this blog to become a listing of all the negative press that marketing procurement get but it is funny that it seems the world over, the view is similar. Let's spread the positive word - we can help and we can make a difference (sermon over with !)
"Due to market forces, the alignment of planets or perhaps a prediction from the Mayan calendar, the ad world seems to be suffering from an amazing amount of seismic shifting.
...nature is super heating the traditional core of advertising; the ad agencies. They are being hit by a veritable tsunami of change; the heavy hand of procurement, the removal of the media function, marketing input taken up by consultants, the digital revolution and so on; so much so, agencies are now calling themselves “creative” agencies to try to stop the end of days
Quite an interesting viewpoint from the author - Paul Loosley, with 2 paragraphs that stood out for me - shown below. Interesting re his view of the ad agencies and one I have to say that I do agree with. But re the 2nd extract I don't want this blog to become a listing of all the negative press that marketing procurement get but it is funny that it seems the world over, the view is similar. Let's spread the positive word - we can help and we can make a difference (sermon over with !)
"Due to market forces, the alignment of planets or perhaps a prediction from the Mayan calendar, the ad world seems to be suffering from an amazing amount of seismic shifting.
...nature is super heating the traditional core of advertising; the ad agencies. They are being hit by a veritable tsunami of change; the heavy hand of procurement, the removal of the media function, marketing input taken up by consultants, the digital revolution and so on; so much so, agencies are now calling themselves “creative” agencies to try to stop the end of days
22 November 2009
Goings on this week
Two events that may be of interest this week
iris are hosting a Procurement Breakfast at their offices on Thursday at 8.30am. Guest speakers are Jane Dormer of Coke and Tony Squires of 4C. Contact Nicola Osmond (nicola.osmond@iris-worldwide.com ).
There is a M&M Briefing event also on Thursday looking at “When Should You Spend? Advertising Strategies in Recession and Recovery”. The event is sponsored by the FT and should have around 100 agency and marketer delegates attending. Contact emily@csquared.cc
iris are hosting a Procurement Breakfast at their offices on Thursday at 8.30am. Guest speakers are Jane Dormer of Coke and Tony Squires of 4C. Contact Nicola Osmond (nicola.osmond@iris-worldwide.com ).
There is a M&M Briefing event also on Thursday looking at “When Should You Spend? Advertising Strategies in Recession and Recovery”. The event is sponsored by the FT and should have around 100 agency and marketer delegates attending. Contact emily@csquared.cc
21 November 2009
Hot off the press
Just seen this blog posting from Blair Enns whose business is about how to win without pitching. He works closely with the DBA in the UK. Very strong views on procurement and how the venture into marketing procurement is not working. Worth a read.
http://www.winwithoutpitching.com/the-rise-and-fall-of-procurement
http://www.winwithoutpitching.com/the-rise-and-fall-of-procurement
Here we go - first ever blog!
"As I hurtled through space, one thought kept crossing my mind: Every part of this capsule was supplied by the lowest bidder." John Glenn, Astronaut
“The question remains whether the procurement process can successfully purchase creative services in the way door handles or raw materials are bought. The emphasis on procurement seemed to have started in the pharmaceutical industry and then moved elsewhere.” Martin Sorrell – CEO WPP
I thought it was appropriate to start off my first blog with a few quotes about procurement - the latter from Sir Martin on the wonderful world of marketing procurement that I work in.
The question that has been bugging me this week is why is there so much negative press about marketing procurement. There has been the recent article in Ad Age bemoaning the experience or the perceived lack of marketing experience of procurement folk. Do other industries and their trade mags see the involvement of procurement be it in the buying of travel or raw materials as negative ?
As with every role there are good people and there are some that perhaps may need some further training (happy to help of course!)- but it would be good to stop the negative comments and get the role and value that marketing procurement bring to agency relationships as positive and as natural in the marketing procurement sphere as the search and selection and media auditing companies. All suggestions welcome!.
“The question remains whether the procurement process can successfully purchase creative services in the way door handles or raw materials are bought. The emphasis on procurement seemed to have started in the pharmaceutical industry and then moved elsewhere.” Martin Sorrell – CEO WPP
I thought it was appropriate to start off my first blog with a few quotes about procurement - the latter from Sir Martin on the wonderful world of marketing procurement that I work in.
The question that has been bugging me this week is why is there so much negative press about marketing procurement. There has been the recent article in Ad Age bemoaning the experience or the perceived lack of marketing experience of procurement folk. Do other industries and their trade mags see the involvement of procurement be it in the buying of travel or raw materials as negative ?
As with every role there are good people and there are some that perhaps may need some further training (happy to help of course!)- but it would be good to stop the negative comments and get the role and value that marketing procurement bring to agency relationships as positive and as natural in the marketing procurement sphere as the search and selection and media auditing companies. All suggestions welcome!.
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