Which Way Now? Andy Pearch, MediaSense

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In this presentation, Andy Pearch stated that the current models of performance evaluation, relationship management and remuneration have each failed to reflect that changes in the media landscape, in communications technology and in consumer empowerment over the last 20 years. He suggested that current ‘best practice’ is sometimes counterproductive and discourages media agencies from taking commercial or creative risks for their clients. The industry needs a reboot.

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Which Way Now? Andy Pearch, MediaSense

  1. 1. Wednesday 3rd November 2010 Which Way Now ? Stick or Twist This document is private and confidential and contains privileged and proprietary information. Which Way Now? Upstream or downstream? Andy Pearch, Co-Founder, MediaSense
  2. 2. 2 Mark Hunter, “Transformational change is required now in the marketing communications industry to ensure that clients and agencies maximise the opportunity for brilliant and effective work” Mark Hunter CEO, Molson Coors
  3. 3. Stephen Miron, “Auditors count price but they need to count value” 3 Stephen Miron Chief Executive, Global Radio
  4. 4. Richard Pinder “Tactics, measures and metrics are now in huge conflict. There’s only one way to reintroduce objectivity: go back to the consumer and view the communications world through their lens, not ours” 4 Richard Pinder CEO, Publicis Worldwide
  5. 5. Steve Williams: “If we didn’t have auditors or a pitch for a year, you watch the quality of client work go up.” 5 Steve Williams Chief Executive, OMD UK Group
  6. 6. 6
  7. 7. Best Practice? 7
  8. 8. 187 media pitches in 2008 260 media pitches in 2009 8 Source: RECMA
  9. 9. 9 Source: WFA 2010 8% 8% 31% 39% 39% 54% 77% 77% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Existing relationship not working Organisational/Strategic change Motivateincumbent Improveterms Better team on business Statutory Improveservicelevels Improvemedia costs What were the main reasonsfor change and objectives?
  10. 10. The illusion of “savings” 10 “Savings”
  11. 11. Are we looking in the right direction ? 11
  12. 12. 1995 40% audited = 6% advantage 12
  13. 13. 2010 80% audited = 13 1% advantage
  14. 14. 14
  15. 15. 15
  16. 16. HSBC Halifax Lloyds Barclays Natwest Santander ABC1 Adults Profile 16-44 Adults Profile 10 x Magnification
  17. 17. HSBC Halifax Lloyds Barclays Natwest Santander ABC1 Adults Profile 16-44 Adults Profile Actual Size
  18. 18. Consolidation of Sales Points 18
  19. 19. 36% of creative agencies receive over 50% of their PBR 19 Source: ISBA Paying for Advertising
  20. 20. 87% of media agencies receive over 50% of their PBR 20 Source: ISBA Paying for Advertising
  21. 21. “Media agencies role in successful marketing comms will diminish as they increasingly look after their own interests rather than their clients” MediaSense 2010 Survey 21
  22. 22. “They get data. They have a commercial eye. The issue is increasingly they focus on delivering surrogate media outputs rather than true insight and advantage for a brand or business. 22 MediaSense 2010 Survey
  23. 23. The nature of the churn and pitch culture, reveals media agencies to be commoditised in clients eyes. 23 MediaSense 2010 Survey
  24. 24. “Significant clients will move buying in- house or have minimal agency contact, media owners will increasingly encroach on other agency activities such as research/sponsorship/creativity” 24 MediaSense 2010 Survey
  25. 25. Not a pretty picture 25
  26. 26. 26
  27. 27. 27 Reach / Frequency Click thru rate Expansion Rate Interaction Rate Game play rate Video Play rate Video completion rate Sound initiated video play rate Dwell time Likes, shares etc Impressions, clicks Registrations Downloads Applications Sales ...
  28. 28. 28 Digital networks act as antennae
  29. 29. In digital, the price paid has little bearing on Performance 29 Plan 1 Plan 2 Plan 3 Cost per 1000 Conversion Rate Cost per Sale £1.50 £2.00 £2.50 5% 6% 8% £38 £37 £28 Click thru rate 0.08% 0.09% 0.11%
  30. 30. 30 Current focus Cost Output Future focus Cost A: “Move away from measuring inputs to measuring outputs.” MediaSense 2010 Survey Q: And finally ... if you had one wish, what change would you make to the way media performance is evaluated? Output
  31. 31. Social media is a performance accelerator 31
  32. 32. Seek out Less Competed Areas and define your own Metrics 32
  33. 33. 33
  34. 34. “The client that agencies want to deliver their best work for” 34
  35. 35. You must carry more risk to become a long term partner 35
  36. 36. 36
  37. 37. 37 Best Practice Better Practice  Contract cycle pitches  Cost the key metric  CPTs and Reach vs Pool  Retrospective measurement  Metrics fully-controlled  Pay for time  Gut-feel decision-making  Investments commercially-driven  Media Owners at arms length  Strategic reappraisals  Performance the key metric  CPEs and CPAs vs Target  Adaptive measurement  Metrics are managed  Empirical decision-making  Investments results-driven  Media Owners fully involved  Pay for value
  38. 38. 38 ...clients need independent help to navigate change and improve performance: they don’t need to hear they can get a cheaper deal down the road...”
  39. 39. 39 “If agencies can understand the link between media and its business impact, they will become fundamental” MediaSense 2010 Survey
  40. 40. 40 Media Agencies have the best line of sight across all channels and also have deepest understanding of consumer and audience behaviour in relation to both brand and media consumption” MediaSense 2010 Survey
  41. 41. “Simplistic benchmarking using aggregate statistics is valid only for standardized processes that are intended to produce low-cost, non- differentiated services for internal or external customers” 41
  42. 42. 42 Clarence Darrow “It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.”
  43. 43. Wednesday 3rd November 2010 Which Way Now ? Stick or Twist This document is private and confidential and contains privileged and proprietary information. Which Way Now? Upstream or downstream? Andy Pearch, Co-Founder, MediaSense

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