Developing	
  Effec.ve	
  	
  
Compensa.on	
  and	
  Agency	
  	
  
Performance	
  Measurement	
  	
  
in	
  Digital	
  
Ja...
§  20	
  year	
  digital	
  veteran	
  
§  Agency	
  leadership	
  background	
  (knows	
  where	
  the	
  
skeletons	
 ...
Confiden'al	
  3	
  
Everyone
shares the
same pain and
frustration…
4	
  
How to wrangle the
complexity of digital
§  Are	
  we	
  inves.ng	
  properly?	
  
§  Are	
  we	
  working	
  with...
Today’s consumer is …

Connected

Empowered

Distracted
Confiden'al	
  6	
  
Digital	
  marke.ng	
  is	
  equal	
  parts	
  	
  
Mad	
  Men	
  and	
  Minority	
  Report	
  
Agencies have a big task 
§  Beyond design, UX of everything
§  Creating great content, and a lot of it
§  Managing a c...
Marketing procurement has an equally big task 
§  Create a win-win relationship 
§  Motivate agencies to do their best w...
9	
  
Marketers struggle with various levels of accountability
Quan.ta.ve	
  	
  
measures	
  
Qualita.ve	
  	
  
measures	
  
P...
Digital requires both a quantitative and qualitative lens
Reach,	
  exposure	
  
Engagement	
  
Sales	
  /	
  	
  
ROI	
  ...
Your agency relationship toolkit
§  QualitaDve	
  review	
  of	
  
performance	
  against	
  goals	
  
§  IteraDve	
  st...
Evaluating your agencies on traditional
quantitative measures alone is misguided
Quan.ta.ve	
  measures	
   Qualita.ve	
  ...
Establish	
  goals	
  and	
  
forecasts	
  
14	
   Confiden'al	
  
1	
  
2	
  
3	
  
Review	
  performance	
  
against	
  g...
Develop a weighted scorecard
Account	
  
leadership,	
  
strategy	
  
• Rank	
  each	
  criteria,	
  
N/A=0,	
  1=Must	
  ...
Understands	
  our	
  business,	
  brand(s),	
  culture,	
  our	
  category,	
  and	
  our	
  compeDtors	
  
Communicates	...
Agency	
  evaluates	
  client	
  
Briefs	
  clearly	
  define	
  projects,	
  objecDves	
  and	
  definiDons	
  of	
  succes...
18	
   Confiden'al	
  
§  Where	
  does	
  the	
  agency	
  excel?	
  
What	
  should	
  the	
  agency	
  
conDnue	
  to	
...
19	
   Confiden'al	
  
§  What	
  should	
  the	
  agency	
  start	
  
doing	
  that	
  they	
  are	
  not	
  
currently?	...
20	
   Confiden'al	
  
§  What	
  does	
  the	
  agency	
  need	
  to	
  
stop	
  doing?	
  
§  What	
  are	
  the	
  sor...
§  FTE	
  +	
  Overhead	
  +	
  Profit	
  model	
  provides	
  
transparency	
  and	
  a	
  founda.on	
  for	
  a	
  
succ...
 
§  Include	
  risk/reward	
  bonus	
  structures	
  
where	
  appropriate	
  
§  Analyze	
  overhead	
  costs;	
  expe...
§  Ownership	
  of	
  work	
  and	
  source	
  files	
  
§  Ownership	
  of	
  all	
  data	
  
	
  
§  Pass-­‐through	
 ...
§  Iden.fy	
  as	
  much	
  of	
  the	
  tech	
  stack	
  as	
  
possible	
  going	
  in	
  
	
  
§  Direct	
  contracts...
Consolidation vs. diversity in your agency portfolio
▪  Where	
  scale	
  creates	
  aggregate	
  data	
  
opportuni.es	
 ...
Confiden'al	
  26	
  
Structuring	
  resources	
  to	
  maximise	
  output	
  in	
  
the	
  digital	
  area	
  –	
  SEO,	
 ...
Thank	
  you	
  for	
  listening!	
  
You	
  have	
  a	
  lot	
  of	
  work	
  	
  
ahead	
  of	
  you.	
  
Jason	
  Helle...
Upcoming SlideShare
Loading in …5
×

Developing Effective Digital Agency Compensation and Agency Performance Measurements in Digital -- Procurecon Marketing London 2014

945
-1

Published on

Presentation from Procurecon Marketing and Digital in London on June 3, 2014. Presented by Jason Heller.

Digital is changing the way clients and agencies operate, and as a result, the approach to compensation and agency relationship and performance evaluation and management is changing as well. Marketing and procurement organizations take heed -- the most important challenges to solve for are within your own organization. As procurement identifies ways to truly engage and partner with marketing - earning a seat at the proverbial table, the matrix structure that allows close collaboration between the marketing procurement function (marketing investment manager) and the CMO, CIO and CFO is more important than ever.

Beyond the organizational challenge, aligning on a combination of weighted KPI's is needed to facilitate proper evaluation and incentivize the best digital work from your agencies. Different contract terms are often necessary in digital to address growing data and technology needs as well as to encourage innovation and enable nimbleness.

Digital has nuances and complexity, but not nearly the amount of complexity that the ecosystem would leave you to believe.

Managing the digital marketing procurement process should not be taken lightly as it can unlock a significant amount of value.

Published in: Marketing, Business, Education
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
945
On Slideshare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
27
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Developing Effective Digital Agency Compensation and Agency Performance Measurements in Digital -- Procurecon Marketing London 2014

  1. 1. Developing  Effec.ve     Compensa.on  and  Agency     Performance  Measurement     in  Digital   Jason  Heller   1   Confiden'al   June  3,  2014  
  2. 2. §  20  year  digital  veteran   §  Agency  leadership  background  (knows  where  the   skeletons  are  buried)     §  Last  12  months  -­‐-­‐  involved  in  $500MM+  in  digital  agency   reviews,  compensa.on  structuring  ,  and  media.on     §  Works  closely  with  enterprise  marke.ng  and   procurement  leadership   2   Why should we pay attention to Jason?
  3. 3. Confiden'al  3   Everyone shares the same pain and frustration…
  4. 4. 4   How to wrangle the complexity of digital §  Are  we  inves.ng  properly?   §  Are  we  working  with  the  right   agencies?   §  Are  we  paying  the  right  rates?   §  Are  we  evalua.ng  the  right   metrics?   §  Are  we  moving  the  needle?  
  5. 5. Today’s consumer is … Connected Empowered Distracted
  6. 6. Confiden'al  6   Digital  marke.ng  is  equal  parts     Mad  Men  and  Minority  Report  
  7. 7. Agencies have a big task §  Beyond design, UX of everything §  Creating great content, and a lot of it §  Managing a complex media ecosystem §  Providing advanced analytics and insights §  Collaboration and playing nicely with others
  8. 8. Marketing procurement has an equally big task §  Create a win-win relationship §  Motivate agencies to do their best work §  Unlock and create value – beyond cost savings 
 and cost avoidance §  Create accountability within internal teams §  Support internal stakeholders while developing subject matter knowledge
  9. 9. 9  
  10. 10. Marketers struggle with various levels of accountability Quan.ta.ve     measures   Qualita.ve     measures   Performance   marke.ng   Difficult  to  .e  back  to  value   Easy  to  .e  back  to  value   CRM   Content   Website   Social  media   Mobile  apps   Mobile   adver.sing   Video   adver.sing   Brand  display   SEO   Social  listening   Crea.ve   CRM   Performance   marke.ng   Website   SEO   *  Not  exhaus've   Content   Social  media   Mobile  apps   Video   adver.sing   Brand  display   Social  listening  
  11. 11. Digital requires both a quantitative and qualitative lens Reach,  exposure   Engagement   Sales  /     ROI     Branding  effecDveness   CompeDDve   SOV,  social     buzz   Quan.ta.ve  measures   Qualita.ve  measures   Discoverability   Visibility    
  12. 12. Your agency relationship toolkit §  QualitaDve  review  of   performance  against  goals   §  IteraDve  strategy  reviews   §  SeOng  goals  for  the  following   quarter   §  Support  marketers  in  ways   that  they  cannot  support   themselves   §  DoRed  line  to  the  CMO   §  Internal  assessments  and   capability  development   §  Brands  evaluate  agency   §  Agency  evaluates  itself   §  Agency  evaluates  brands   Quarterly  Business  Reviews  (QBR)   Evalua.on  Scorecards  Marke.ng  engagement   A  FOUNDATION  OF  KNOWLEDGE:       Landscape,  best  prac.ces,  processes,  technology  
  13. 13. Evaluating your agencies on traditional quantitative measures alone is misguided Quan.ta.ve  measures   Qualita.ve  measures   §  FTE  rates  and  alloca.on   §  Comparison  against  benchmarked   FTE  rates   §  Working  vs.  non-­‐working  media   spend   §  Analy.cs  output   §  Investment  performance   §  Account  leadership  and  strategy   §  Thought  leadership  and   innova.on   §  Crea.ve  and  technical  work   §  Staffing  appropriateness  
  14. 14. Establish  goals  and   forecasts   14   Confiden'al   1   2   3   Review  performance   against  goals  and   benchmarks   Iterate  strategy  and   op.mize  marke.ng   investments   Enforce  a     simple  process  
  15. 15. Develop a weighted scorecard Account   leadership,   strategy   • Rank  each  criteria,   N/A=0,  1=Must   Improve,  2=Could   be  beRer,  3=Good,   4=  Very  Good,   5=Excellent   • Provide  raDonale   for  each  score   under  3   Thought   leadership  and   innovaDon   • Rank  each  criteria,   N/A=0,  1=Must   Improve,  2=Could   be  beRer,  3=Good,   4=  Very  Good,   5=Excellent   • Provide  raDonale   for  each  score   under  3   CreaDve  and   technical  work   • Rank  each  criteria,   N/A=0,  1=Must   Improve,  2=Could   be  beRer,  3=Good,   4=  Very  Good,   5=Excellent   • Provide  raDonale   for  each  score   under  3   Staffing   • Rank  each  criteria,   N/A=0,  1=Must   Improve,  2=Could   be  beRer,  3=Good,   4=  Very  Good,   5=Excellent   • Provide  raDonale   for  each  score   under  3   AnalyDcs  and   performance   • Rank  each  criteria,   N/A=0,  1=Must   Improve,  2=Could   be  beRer,  3=Good,   4=  Very  Good,   5=Excellent   • Provide  raDonale   for  each  score   under  3   Financial   • Rank  each  criteria,   N/A=0,  1=Must   Improve,  2=Could   be  beRer,  3=Good,   4=  Very  Good,   5=Excellent   • Provide  raDonale   for  each  score   under  3   Average  score   Weighted  score   Weight   Average  score   Weighted  score   Weight   Average  score   Weighted  score   Weight   Average  score   Weighted  score   Weight   Average  score   Weighted  score   Weight   Average  score   Weighted  score   Weight   Total  score  
  16. 16. Understands  our  business,  brand(s),  culture,  our  category,  and  our  compeDtors   Communicates  clearly,  keeps  us  informed,  follows  up  thoroughly,  idenDfies  potenDal  issues  early,  and  limits   assumpDons   AnDcipates  our  needs  proacDvely     Account  leaders  are  advocates  and  stewards  for  our  brands  within  the  agency  and  the  market   Manages  Dmelines,  provides  adequate  Dme  for  internal  coordinaDon,  and  delivers  commiRed  work  on  Dme     UDlizes  a  project  management  system,  which  we  have  access  to  and  it  is  easy  to  use   RecepDve  to  and  follows  our  feedback  and  direcDon   Challenges  us  when  needed     Challenges  and  quesDons  their  internal  teams  to  drive  performance   UDlizes  our  Dme  and  their  Dme  effecDvely  and  producDvely   Develops  and  iterates  effecDve  digital  strategies  for  our  brand(s)   Collaborates  producDvely  with  our  other  agencies   Manages  problems  and  difficult  situaDons  swidly  and  effecDvely   Account  leadership,  strategy,  project  management   Sample criteria …
  17. 17. Agency  evaluates  client   Briefs  clearly  define  projects,  objecDves  and  definiDons  of  success   ExpectaDons  are  reasonably  aligned  with  budget  levels   Use  our  Dme/resources  well   Leverage  our  thought  leadership  and  POV's   Provide  clear  feedback,  and  follow  planned  iteraDon  cycles   Sets  reasonable  due  dates  giving  agency  adequate  Dme  to  deploy  its  best  resources;  if  deadlines  are  Dght,  explains  why  and   works  with  team  to  agree  to  feasible  deliverables  within  compressed  Dmeframe   Regularly  share  business  info,  company  prioriDes,  challenges,  trends,  insights  or  other  informaDon  that  can  help  us   Decision  making  process  is  streamlined  and  effecDve   Has  the  bandwidth  to  coordinate  effecDvely  internally  and  externally  to  move  projects  along   Educated  on  digital  topics  and  stays  up  to  date  on  trends,  and  can  effecDvely  collaborate  with  us  to  develop  best  in  class   digital  programs   Raise  issues  to  senior  management  when  appropriate   Appropriate  and  acceptable  turnaround  Dme  on  decisions  and  approvals   Treat  us  like  partners   Fair  aOtude  when  things  go  wrong;  displays  flexibility  and  understanding  when  problems  arise   Pays  us  on  Dme   Team  is  treated  well  and  enjoys  working  on  the  account   Top  talent  asks  to  work  on  our  account   Sample agency 360 evaluation criteria
  18. 18. 18   Confiden'al   §  Where  does  the  agency  excel?   What  should  the  agency   conDnue  to  do  in  terms  of  how   they  manage  the  relaDonship?   §  How  can  we  challenge  the   agency  to  improve  this  even   further?   Con.nue   1.  ________________________   __________________________   __________________________   __________________________     2.  ________________________   __________________________   __________________________   __________________________       3.  ________________________   __________________________   __________________________   __________________________     Con.nue  
  19. 19. 19   Confiden'al   §  What  should  the  agency  start   doing  that  they  are  not   currently?     §  Where  are  there  gaps  in  how   the  agency  manages  the   relaDonship  and/or  your   investments?   Start   1.  ________________________   __________________________   __________________________   __________________________     2.  ________________________   __________________________   __________________________   __________________________       3.  ________________________   __________________________   __________________________   __________________________     Start  
  20. 20. 20   Confiden'al   §  What  does  the  agency  need  to   stop  doing?   §  What  are  the  sore  spots  or   negaDve  factors  in  how  the   agency  is  managing  the   relaDonship  and/or   investments  that  need  to   change?   Stop   1.  ________________________   __________________________   __________________________   __________________________     2.  ________________________   __________________________   __________________________   __________________________       3.  ________________________   __________________________   __________________________   __________________________     Stop  
  21. 21. §  FTE  +  Overhead  +  Profit  model  provides   transparency  and  a  founda.on  for  a   successful  rela.onship   §  Review  FTE  proposals  and  scope  of  work     very  carefully   §  Never  accept  “zero  margin”   21   Negotiating agency compensation and contracts
  22. 22.   §  Include  risk/reward  bonus  structures   where  appropriate   §  Analyze  overhead  costs;  expect  overhead   to  be  close  to  100%  of  FTE  costs     §  Profit  margins  range  from  ~10%-­‐20%,   depending  on  scale  and  scope   22   Negotiating agency compensation and contracts
  23. 23. §  Ownership  of  work  and  source  files   §  Ownership  of  all  data     §  Pass-­‐through  of  all  discounts  and  rebates   §  Full  transparency  on  net  costs   §  Monthly  reconcilia.on  /  burn  repor.ng   for  retainers       §  Acceptance  clause   §  Address  approach  to  staffing  shiis   23   Contracts: general digital nuances
  24. 24. §  Iden.fy  as  much  of  the  tech  stack  as   possible  going  in     §  Direct  contracts  with  key  marke.ng   technology  plajorms   §  Nego.ate  an  extension  of  agency  rates   where  possible     §  Agency  to  manage  use  of  plajorms     24   Contracts: marketing technologies
  25. 25. Consolidation vs. diversity in your agency portfolio ▪  Where  scale  creates  aggregate  data   opportuni.es   ▪  Eg:  Media,  Social  media,  CRM     ▪  The  same  digital  fundamentals   services  are  managed  and  produced   across  mul.ple  agencies   ▪  Front-­‐end  producDon   ▪  Social  community  management     ▪  Marke.ng  technology  categories   with  minimal  differences  or  clear   market  leaders   When  to  consider  consolida.on   When  to  consider  diversifica.on   ▪  Specialized  capabili.es  that  require   best-­‐in-­‐class  specialists   ▪  Crea.ve  vision  varies  from  agency  to   agency,  and  diversity  allows  for  the   development  of  unique  brands  and   campaigns   ▪  Some.mes  smaller  and  more  nimble   agencies  can  provide  services  at   lower  costs  
  26. 26. Confiden'al  26   Structuring  resources  to  maximise  output  in   the  digital  area  –  SEO,  social  media,  apps,   mobile  –how  much  investment  should  go   where?   How will we maximize the output of digital spending? §  Develop  subject  maler  knowledge   §  Collaborate  with  marke.ng   §  Help  support  rigorous  data-­‐driven  decision  making   §  Establish  goals   §  Review,  evaluate,  and  iterate  frequently    
  27. 27. Thank  you  for  listening!   You  have  a  lot  of  work     ahead  of  you.   Jason  Heller   27   Confiden'al   jason@agiliDpartners.com   @jasonheller  

×