www.trinityp3.com Mark Bowling, TrinityP3 Senior Consultant based in Singapore recently addressed the World Federation of Advertisers Sourcing Forum on the current issues and trends in Marketing Management and Marketing Procurement and Sourcing. In the presentation he discusses: 1. Scope of work setting and management 2. Agency remuneration models and trends 3. The challenges of a performance based remuneration model 4. Issues encountered during agency negotiations 5. Agency roster relationship and performance management

1. marketing management consultants
Tight Briefs
Focused Scopes
and Value Creation
Mark Bowling
TrinityP3
October 2015
For WFA Procurement Meeting, Singapore

2. marketing management consultants
Are your conversations about fees like this?
https://www.youtube.com/watch?v=KLirjATEZBI

3. marketing management consultants
Local, Regional And Global
TrinityP3 works across Asia-Pacific including Australia, China and SE Asia with offices in Sydney,
Melbourne, Hong Kong and Singapore and globally through our membership in the Marketing FIRST
Forum (M1F).
M1F is a global collective of like minded marketing professionals providing global expertise and local
knowledge to assist marketers achieve maximum marketing potential and value.
TrinityP3 and M1F are aligned to provide globally consistent services, tools and processes but with
local market knowledge. The M1F structure often mirrors our clients own business unit structures.
Thus, as a united team we work efficiently and effectively to the benefit of our clients.
View more information on M1F at http://www.m1f.org

4. marketing management consultants
Our Scope of Work
Marketing Performance
Services:
1. Marketing business
alignment.
2. Budget KPI and ROI
setting.
3. Marketing structure
process review.
4. Marketing planning
process review.
5. Sustainable marketing
assessment.
6. Relationship
performance evaluation.
Agency Performance Services:
1. Strategic supplier alignment/
Relationship management.
2. Supplier search.
3. Agency selection / Pitch.
4. Media buying benchmarking.
5. Agency assessment
modelling.
6. Contract reviews.
7. Contract negotiations.
8. Scope of work management.
9. Rate card review
(Ad Cost Checker).
Delivery & Implementation
Performance Services:
1. Engagement agreements.
2. Relationship performance
evaluation.
3. Production management
assessment.
4. Production transition
management.
5. Sustainability assessment.
6. Results report assessment.
7. Media performance
assessment.
View our full scope of services at http://www.trinityp3.com/services/
TrinityP3 has more than 15 years experience and expertise in providing specific services to achieve
maximum marketing potential. These services are provided to our clients on both a project basis
and as part of a more expansive optimisation process.

5. marketing management consultants
Scope Fulfillment
• Checklist all the things you are paying for
• Are you getting everything?

6. marketing management consultants
Diligence in Delivery
• Checklist ongoing
• Procurement liase with Marketing on
delivery
• Helps assess quality and value of the
Scope deliverables
Deliverable Delivered? Quality
1 2 3 4 5
Weekly Reporting
Monthly Newsletter
Daily Campaign Optimisation Summary
Quarterly Competitive Review
Quarterly Business Review
Half-Year CEO Check in

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Comfort Zones are Dangerous

8. marketing management consultants
Scope Review
• Checklist all the things you need for the
business
• Do you need to change your SOW?

9. marketing management consultants
Tight Briefs and Detailed SOWs Save Money
• Out of Scope work can be up to 180% of
the cost of In-Scope work
• If 40% of your agency work is Out of
Scope, then your agency fees could be
22% over budget
WORK COST
Out of Scope
In Scope

10. marketing management consultants
How do you know how much to pay?
https://www.youtube.com/watch?v=oZofzH468NA

11. marketing management consultants
Remuneration Models
• Most common remuneration models:
• Commission & Service Fees
• Resource Package Fees (Retainer)
• Variable fees based on actual hours
• Project Fees
• Hybrids
• Latest Trends:
• Move from cost to value based
• Return of the commission
• Incentive based models

12. marketing management consultants
Performance or Incentive
• Benefits:
• Improved agency performance.
• Improved advertiser performance.
• Goal alignment and congruence.
• Types:
• Bonus - additional to the agreed profit margin.
• Cost recovery - represents all profit.
• Shared risk and reward - agency puts % of margin at risk
and advertiser meets that % in pool.
• Earn back - agency puts % of margin at risk to be paid in
results.

13. marketing management consultants
Performance Criteria
• Business Performance (Hard)
• E.g. sales, traffic, profit, market share, volume growth,
etc. These can be measured by the same criteria that the
advertiser uses for their internal bonus systems.
• Advertising Performance (Medium)
• EG: product awareness, ad awareness measures,
consumer measures, attitude ratings, persuasion,
purchase intent, awards, brand equity, image,
effectiveness awards, etc.
• Agency Performance (Soft)
• Relates to the evaluation of agency functional areas:
account services, creative and media in terms of:
performance, service, relationship, cost efficiencies, etc

14. marketing management consultants
Moving from Input/Costs to Outcome/Value
• Most of the existing models are input / cost based that
reward volume of work and not effectiveness.
• The current best practice is to move to an output based /
pricing model that fixes the value based on output.
• The leading trend is for a value based remuneration model
where the reward is based on the value created or
contributed.
• Therefore the global remuneration trend is summarized by:

15. marketing management consultants
Inputs vs Outputs vs Outcomes

16. marketing management consultants
5 Challenges of Performance Payments
1. Agencies are hesitant to link
compensation to performance
2. The performance criteria prove difficult to
agree on
3. The scope of the incentive is too narrow
4. It proves difficult to budget the payment
5. Disputes over the payment of the
incentive

17. marketing management consultants
Common Mistakes
• Negotiating one variable, such as the
overhead and profit multiple and miss the
other variables
• Using average cost per FTE (divide the
total cost by the number of FTEs)
• Not agreeing total or maximum billable
hours

18. marketing management consultants
Ongoing Hygiene Problems
• Accounting for total man hours

19. marketing management consultants
How many working hours in a year?
Salary $100,000 $100,000 $100,000
Billable
Hours
1540 1650 1840
Multiple 2.4 2.4 2.4
Hourly Rate $156 $145 $130

20. marketing management consultants
Ongoing Hygiene Problems
• Accounting for total man hours
• Assessing Team Dynamic and Relationship

21. marketing management consultants
Understanding Valuable Relationships

22. marketing management consultants
Tapping into the best talent
• Demand Agency Org Charts – are you aware of
the size and structure of the agency
• Are Management part of ‘Overhead’? Are heads of
capabilities actively involved in your business?
What proportion of their time are you getting?
• Track award winning business from your agency –
why are your team not winning? Is another client
getting a ‘better’ team? If so, why?

23. marketing management consultants
Ongoing Hygiene Problems
• Accounting for total man hours
• Assessing Team Dynamic and Relationship
• Reviewing Capabilities and Agency
Product

24. marketing management consultants
Assessing Agency Capabilities
• Don’t underestimate the
value of a capabilities review
with your roster agencies
• Agencies usually only provide
to clients what they are
requested and do not have
time to update you on their
progress in other areas
• Calibr8or is launching to help
assess agency capabilities
and performance

25. marketing management consultants
Benchmarking Agency Rates
• Agency costs are difficult to
break down
• No standard costs are
followed and limited
resources to assess where
your stand
• Benchmarking is one simple
solution

26. marketing management consultants
Accessible to Clients and Agencies

27. marketing management consultants
Are you compensating for DAMAGES?
https://www.youtube.com/watch?v=AUaA78Ch5rs

28. marketing management consultants

29. marketing management consultants
For more information contact:
TrinityP3 Pty Ltd
Sydney
+612 9964 9900
Melbourne
+613 9682 6800
Hong Kong
+852 3478 3982
Singapore
+65 6631 2861
people@trinityp3.com
www.trinityp3.com
Trinityp3.com/blog/
@TrinityP3
TrinityP3
TrinityP3.StrategicMarketingConsultants