ANA Agency Financial Management Conference Recap

May 13, 2013

SCOTTSDALE — Over 650 Marketing, Procurement and Agency professionals gathered to discuss best practices for marketing investment management at the 2013 Agency Financial Management Conference, hosted by the ANA. The sellout crowd was indicative of the continued pressure on marketing executives to optimize their marketing investment to better prepare for the challenges and opportunities brought on by the increased data explosion and continually evolving media landscape. Speakers from some of America’s top brands addressed the evolution of their Marketing Procurement function with the most discussion around how to better integrate Procurement’s new role and how better to bridge the gap between investing for growth while also cutting costs throughout the marketing supply chain. The ANA’s Agency Compensation Study, which was released on the last day of the conference, revealed that over 61% of respondents plan to offer their agency partner some form of performance incentive this year (up from 45% in 2010 and only 13% in 2000). “Some agencies are hungry for risk and we’d prefer they share the risk with us,” said Andy England, EVP and CMO of Miller Coors, in his keynote address. Miles Nadal, Chairman and CEO of MDC Partners, agreed and noted that “Agency performance measures should be based on client business measures – increasing volume or share against market.” Agency efficiency metrics were mentioned by several speakers and a key learning is that the evolving landscape has made some traditional measures of efficiency irrelevant.  For example, Bryan Wiener from 360i provided a thought piece on the uniqueness of agency partnership management in the digital space.  He presented several social media case studies including the Oscar Mayer Bacon Barter as examples of why digital channels are better measured through channel agnostic ROI, not working vs non-working media.  “If you feel like your agency dollars are truly ‘non-working’, then change your agency,” he said, “there are plenty of us out there.”  Additionally, Rick Brook from WPP demonstrated how overhead rates are also not a solid indicator of agency efficiency. He walked conference attendees through several scenarios to explain how overhead is calculated and why higher overhead does not always equal inefficient processes or payroll for agency employees. The Bedford Group, a marketing management consulting firm that pioneered business consulting from a marketing perspective, moderated a breakout session at the conference highlighting the yin and yang of how to achieve creative excellence with Procurement.  Panelist Joanne Fillion, Director of Creation – Images, Events and Lifestyle of Cirque du Soleil, noted the importance of leaving room for innovation in agency compensation models. “Going forward, build in space in the fee structure for spontaneity – it’s organic, not forced and companies wanting to build big business need to give agencies greater permission to explore.” A key takeaway from the conference is the need for Marketing Procurement to take a bigger role in innovation and process improvement to truly be considered a valuable partner to the marketing organization.  Jeff Jacobs from McKinsey pointed out that the industry is shifting from management of a few agencies to coordinating an entire ecosystem of suppliers. “Procurement can have a large impact” he said “but it requires building the relationship and knowing the business and the partner.”  This sentiment was echoed by Sopan Shah, Global Leader of Advertising and Marketing Procurement of Nestle, who spoke about the need for Marketing and IT integration, “The procurement structure of tomorrow can connect with IT to be an innovation accelerator.” Most speakers agreed that it is increasingly important for Marketing Procurement leads to have some marketing background to be successful. As the practice evolves, this will become more and more critical for success, but the talent pool is limited. Kevin Nash, Chief Procurement Officer and VP of Procurement Services of USAA, shared some best practices for building a best in class department and noted that “their mission is to enable goals through customer-focused solutions and strategic relationships – not cost cutting.” Other topics included management of in-house agencies, the importance of integrating data for ultimate relevance, commercial production incentives and corporate trade. More information about ANA’s events can be found at www.ana.net.

About The Bedford Group

The Bedford Group is an Atlanta based Marketing Management Consulting firm that has been in operation since 1986. It has built its reputation on marketing organization support, agency search and relationship management and strategic marketing consulting.  Unlike traditional advertising consultants, The Bedford Group looks beyond traditional marketing disciplines to solve complex, enterprise-wide issues for efficient resource management and improving marketing ROI.

CONTACT:
Kerry Kielb
(404) 237-7471
kkielb@bedfordgroupconsulting.com