Managing Agencies through the Product Life-Cycle Dana M Small … · 2019-11-22 · Creative Advertising Media Planning, Buying & Distribution Branding Creative Services Production

Managing Agencies through the Product Life-Cycle

Dana M Small

Senior Category ManagerGlobal Commercial Operations Lead

The Product Life Cycle

The Product Life Cycle

(Sp

end

) +

Rev

enu

e (Potential)

Extension

Early Intro Growth Maturity

Decline

Demise

Inception Launch Loss of Exclusivity

Time

Traditional Classic Fad

Extended Fad Fashion BustRevival

Alternate Product Life Cycles

Why does product

lifecycle matter when managing

agencies?

“I’ve been

waiting for

your call”

Product Characteristics Drive Marketing

Strategy

Strategy Drives Agency Work

Agency Work Type Continually Changes to

Support the Product

The Continuous

Loop of the Product

Strategy

Ecosystem

Strategy

Profit

Demand

Sales

Customers

Competition

Advertising Mix

Sales Promotion

Product (s)

Pricing

Distribution

Product

Characteristics

Pre-Launch Intro Growth MaturityExtension /

RebrandingDecline

Marketing Strategy

Lifecycle

Budget Increasing Maxed Optimized Re-Prioritized Increasing Limited

Advertising Mix Build AwarenessContinue on pre-

launch campaigns

Mass Market

Awareness

Focus on

differentiators

Rebrand to Mass

Market

Loyal customer

focus

Sales

PromotionEducation Heavy / Trials

Reduce to focus

on profit %

Increase for

switchingHeavy Minimal

PricingAnalysis / Market

ResearchCost Plus

Price to Penetrate

Market

Beat Competitors /

Match

Analysis / Market

ResearchCut

Product Insiders Focus BasicExtension,

Service, Warranty

Diversify brand /

models

Phase out Weak /

New BasicPhase out Weak

DistributionResearch

StrategiesBuild Selective Enhance Selective Intensive Re-Assess Selective

Characteristics Drive Strategy Changes

Strategy Changes

Agency work

(more tactical)

12

65

4

3

2

1

7

8

9

10

11

Creative

Timeline

Pressure Complexity

of Work

Number of

staff

Business

Priority

Volume of

Work

Staff

Seniority

Budget

Size

Advertising Agency Work Characteristics

Content Creation

Global Brand Book

Focus: Creative and Strategy

Positioning / Strategy

Building Digital Tactics

Website updates

Routine Maintenance

Focus: Core Tactics

Account Management

Limited Event Attendance

Some new content / updates

Market Research

Focus: Strategy Refinement

Events / Symposia

Strategy Assessments

Examples of Agency Tactics Over the Life Cycle

Agency-Brand Relationship

A brand’s willingness to support procurement can drastically

change over the life-cycle

Pre-Launch and Launch

“They are a critical partner”

Growth

“We are very happy, but I’m sure there is

room for improvement”

Maturity

“We need to optimize and prioritize all

spend”

Decline

“Can we do more with less?”

Brand

Risk

High

Agency

Reliance

High

Brand Risk - Agency Reliance Curve

Early Life Cycle Priorities

• Finding the right team / mix of staff

• Ability to Scale

• Key Creative Talent

• Hitting Milestones / Timelines

• Alignment with Brand Priorities

Late Life Cycle Priorities

• Refinement of Tactics

• Finding Brand Efficiencies

• Maximizing Budget

• Removing Low-Performing Strategies

• KLTO – Keep the Lights On Activities

Projects

01

02

03

04

05

Willingness to support Procurement can also be

based on a Product Level of Maturity / Spend

Brands

Franchise

Global / Regional

Company Wide

High

Low

Best Practices with Brands,

Drive Procurement Support

• Skip Procurement Lingo

• Brand Planning/Budget

• Alignment of Goals

• Transparency of Needs

• Multiple Options

• Importance of Relationships

The Advertising Industry

Advertising Industry

Advertising

Creative Advertising Media Planning, Buying & Distribution

Branding Creative Services Production Production Support

▪ Brand Positioning

▪ Brand Naming &

Identity

▪ Corporate Branding

▪ Brand Design &

Product Design

▪ Concept development

▪ Campaign planning &

execution

▪ Campaign evaluation

▪ Pre Production

▪ Talent scouting & talent

acquisition

▪ Location planning

▪ Crew & Equipment

Management

▪ Production Execution

▪ Editing

▪ Music Support

▪ Graphics & Effects

▪ Post Production

activities

Life Use to Be Simple for Agencies

Marketing performs business analysis

Marketing team briefs agency

Agency develops creative

Campaign launch across

channels

Measures channel

effectiveness

Marketing summarizes key

learnings

Changes Over the Years

New Platforms

Media Transparency

In-house Agencies

Data Sources

Procurement’s Involvement

Channel Mix

New External Agencies

“Agency

relationship/processes

are undergoing

dramatic change to

adapt to new ways of

reaching consumers.”

Source: McKinsey & Company, 2017

Agency Process (Value Chain) Mapping

03

01

02

04

05

06

08

07

Marketing

creates a

request with

the agency

Advertisement

Reaches

Target

Audience

Creative

Brief Created

Marketing

Approves Brief

Copy

Development

(Storyboard)Creative

Approval*

Production

Rough Cut

ApprovalPost

Production

Pre-Clearance

by Networks

Partnering with all the companies touching

agencies / platforms is key

Have a good understanding the ecosystem

Understand where there can be efficiencies over

the value chain

Agency should have a good understanding of

internal approval processes (onboarding)

Managing Agencies Through the Life Cycle

1. Service Bundling 2: Go Global 3: Value chain

▪ Creative, Media, Production

activities are bundled under

the Agency of Record

▪ Regional Sourcing approach is

adopted. The creative

categories of a specific region

is consolidated to a agency of

record

▪ Project Based & Retainer

models are widely adopted

▪ No proper KPI evaluation

system or technology

platforms are leveraged

4: Optimizing the content

supply chain

▪ Creative, Media and

production activities are

unbundled and respective

agencies are assigned for

each activity

▪ Global sourcing approach for

high spend categories such

as Media and creative is

established

▪ Retainer models widely

adopted over project based

model

▪ KPI based evaluation is

established

▪ Agency structuring and brand

mapping is established. Each

map is assigned a lead

creative, lead media agencies

▪ Global and regional

executional activities are

clearly defined. Marketers

adopt production de coupling

to leverage cost savings

▪ Performance based model is

implemented for strategic

relationships. Retainer is

widely adopted

▪ KPI based evaluation is

enhanced. Digital asset

management is established to

manage global and regional

creative assets

▪ Agency structuring is

enhanced with a lead digital

agency for each brand

▪ A clear sourcing strategy is

defined for every type of

service provider mentioned in

the value chain

▪ Performance based model is

widely adopted over retainer

model

▪ Focus is on optimizing content

value chain by leveraging best

in class technologies in the

market1

2

3

4

5

6

Advertising Category Strategy – Best Practices

Spend

Rate

Agency Mgmt.

SOW Type

Review/Audit

In-house/Out

Negotiations

Procurement Strategy Steps

Life Cycle

Management

Increase in tactical work +

Decrease in creative /

strategy =

Decrease in Staffing

Support and Costs

Spend / Budget Increasing

Rate Type Blended

Agencies RFP Process

Retainer / Project Retainer

SOW Review /

AuditLimited

Maxed

Blended

AOR Global

Retainer / Hybrid

Limited

Optimized

Blended / Hybrid

AOR Regional

Hybrid

Standard

Re-Prioritized

Hybrid / Rate Card

Consolidation

Project

Intensive

Increasing

Tiered

RFP Process

Hybrid

Intensive

Limited

Rate Card

Single Agency

Project

Over kill

In-House /

OutsourceOutsourced Outsourced Hybrid Hybrid Outsourced/Hybrid In-House

Negotiations Most Leverage Staff Focus Push on Rate Efficiencies Hybrid Hard Line

Procurement Strategy Change Through the Life Cycle

Create a Partnership

Alignment of Expectations, Timelines, anfvcd Goals

Clear Communications

Reconciliation of Individual SOWs

Consistent QBRs

Quantitative SLA’s and KPI’s

Agency

Management

Best Practices

• Yearly Negotiations

• SOW Reconciliations – Quarterly to Bi-Yearly

• Audit (if there is no change after 2-3+ years)

• 360 Feedback Quarterly

• Affiliate Language in Contract Terms

Agency Life

Cycle

Adjustments

Questions?