Agencies and procurement

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Agencies and procurement

  1. 1. Data protection 2013 Friday 8 February #dmadata Supported by Agencies and procurement: towards a model that works Tuesday 10 June 2014 #dmacips
  2. 2. Welcome from the Chair Will Hamilton, Managing partner, Hamilton Associates #dmacips
  3. 3. 4.00pm Registration 4.30pm Welcome from the Chair Will Hamilton, Managing partner, Hamilton Associates 4.40pm Agencies perspective Samantha Nolan, Chief client officer, RAPP Gavin Wheeler, Chief executive, WDMP 4.50pm Procurement perspective Tina Fegent, Director, Tina Fegent Limited 5.00pm Finance perspective Colin Fleming, Chief operating officer, AMV BBDO 5.10pm Panel discussion Samantha Nolan, Chief client officer, RAPP Gavin Wheeler, Chief executive, WDMP Tina Fegent, Director, Tina Fegent Limited Colin Fleming, Chief operating officer, AMV BBDO 5.50pm Closing comments Will Hamilton, Managing partner, Hamilton Associates 6.00pm Drinks and networking Agenda
  4. 4. Paying the Agency… There are Differing Remuneration Models
  5. 5. Good Reading Remuneration Guides
  6. 6. The Dilemma • We have moved from the age of commission to the age of fee, time based schemes, to the era of ‘what on earth are we going to do next?’ • Commission was predictable, and linked agency fortunes to the success of a brand – But had nothing to do with scope of work or agency costs • Fees reflect scope of work and agency cost – But are difficult to negotiate – And do not relate to whether the marketing communications are working – Or marketplace success – Some agencies like more risk/reward than others
  7. 7. The key questions • Are we really moving away from time based remuneration models • Is there any further future in commission? • How well is Payment by Results (PBR) working? • Paying by value? • Are there any new ideas?
  8. 8. No Sacred Cows
  9. 9. No Silver Bullets
  10. 10. No Black Boxes
  11. 11. No “one size fits all”
  12. 12. Lets hear a perspective from: • Advantages (Pro) • Disadvantages (Cons)
  13. 13. Agencies perspective Gavin Wheeler, Chief executive, WDMP #dmacips
  14. 14. Market in growth
  15. 15. Rising costs
  16. 16. The perfect storm
  17. 17. Pitching
  18. 18. • Retained • Strategy Retained • Project Costs • Performance Related Fees • Value Based Pricing • Commission • Equity
  19. 19. Agencies perspective Samantha Nolan, Chief client officer, RAPP #dmacips
  20. 20. So, this is the way I see it..
  21. 21. 3 things…….. Relationship Value Bravery £
  22. 22. 3 things…….. What are we? Supplier or Partner? Looking upwards
  23. 23. 2. Value over Cost
  24. 24. Being brave……..
  25. 25. Procurement perspective Tina Fegent, Director, Tina Fegent Limited #dmacips
  26. 26. Finance perspective Colin Fleming, Chief operating officer, AMV BBDO #dmacips
  27. 27. My 5p’s worth
  28. 28. Panel discussion Samantha Nolan, Chief client officer, RAPP Gavin Wheeler, Chief executive, WDMP Tina Fegent, Director, Tina Fegent Limited Colin Fleming, Chief operating officer, AMV BBDO #dmacips
  29. 29. Closing comments Will Hamilton, Managing partner, Hamilton Associates #dmacips
  30. 30. Ten Step Process to Success • Client provides agency with goals. • Negotiation on extensive scope of work. 1. PREPARATION • Agreement on tenure 2. TENURE • Vital to establish the territory covering the appointment 3. TERRITORY • Agency prepares costs on agreed scope of work • Prepares work plan based on people hours 4. FIRST SUBMISSION ON AGENCY COSTS • We feedback ranking only - and then agency makes Second submission to form agreement5. SECOND SUBMISSION
  31. 31. Ten Step Process (6-10) • Both sides agree level of agency remuneration…At the point where cost provision and the cost of people hours intersect 6. AGREEMENT • Client confirms KPI’s to Agency. The two sides agree PBR terms (which may involve ratcheting the profit margin) 7.KPI’s • At this point Client and Agency come to terms on how much Client is going to pay the Agency 8. TERMS AGREED • Client and Agency agree how performance is going to be evaluated…and remuneration reviewed in a year’s time. 9. PERFORMANCE EVALUATION • The final step: definitive discussions on exactly how the agency is to be paid and on the form of contract to be used 10. FINAL TERMS
  32. 32. Drinks and networking #dmacips

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