IPA President Ian Priest introduces the fourth chapter of his ADAPT agenda with a look at how the industry can attain win-win performance in client/agency relationships by moving towards less time based and more value/risk-based remuneration models. This presentation was shown at the IPA's Performance Adaptathon in London on 8th JUly 2014. Find out more at www.ipa.co.uk/adapt/performance and join in the conversation on Twitter using #ipadapt.

1. Win-Win Performance in Client
Win-Win Performance in
Client/Agency Relationships
Ian Priest, IPA President &
Founding Partner VCCP

2. The marketing and communications industry
Better commercial creativity
Toreshape the business model to reflect an evolving and dynamic
industry
By adapting faster and better in 5key areas
My ADAPT agenda
Who are we talking to?
What do we want to achieve?
How do we do that?
Why?

3. A Alliances lesspitches/morepartnerships
D Diversification lessone-dimensional/more multi-dimensional
A Agility lesssetpiece/more realtime
P Performance lesstime-based/more value-based
T Talent lesstraditional/more diverse
The 5 key areas

4. 3rd October 2013 Alliances Adaptathon+experiments
3/4/5th February 2014 Diversification Adaptathon+experiments
7th/ 8th May 2014 Agility Adaptathon+experiments
8th July 2014 Performance Adaptathon+experiments
7th October 2014 Talent Adaptathon+experiments
Adaptathon Schedule

6. Less time-based, more value-based

7. – Add marketing article
Marketing Feature July 2014

8. Setting the wider context

9. From survive to thrive
Source: Bellwether

10. From tangible to intangible value
36%
44%
38% 37% 35% 35% 37%
60%
48%
42%
51% 50% 47%
4%
5%
4% 4%
4% 4%
5%
8%
7%
5%
9% 8%
7%
7%
9%
8% 8%
8% 8%
8%
11%
8%
9%
11%
10%
8%
53%
42%
50% 51% 54% 53% 51%
20%
37%
43%
29% 32%
38%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Undisclosed Value Disclosed Goodwilll
Disclosed Intangible Assets (ex g/w) Tangible Net Assets
Global Enterprise Value 2001 – 2013 (%)
Intangible assets
Tangible assets
Source: 2014 BrandFinance® Global Intangible Finance Tracker (GIFT™)

11. From cost reduction to topline growth

12. From expenditure to investment

13. A new evidence base

14. Toward Win-Win Performance
- Key findings from IPA/ISBA workshop

15. “We need to focus less on cost, and more on value to
the business”
“It ends up being a trust issue between the client and
the agency”
“Scope of work needs to be clearer so we can cost
accurately”
All parties committed to a re-evaluation
of time-based remuneration
IPA/ISBA Workshop – May 2014

16. Keen to explore the Coca-Cola approach
Source: Unleashing the Creative in
Everyone, November 3013: Jonathan
Mildenhall in conversation with Ian Priest
www.youtube.com/watch?v=G1P3r2EsAos

17. Interested to make PBR work better
IPA/ISBA Workshop – May 2014

18. An appetite for new investment models
OpEx CapEx
VS

19. Business performance principles:
 Marketingshouldbeseenlessasashorttermanddiscretionary spendandmoreasan
investment tohelpgrowthebusinessnowandinthefuture
 Aminimum3yearbrandperspectiveisessentialinallcases,evenforquarterlybrandactivation
programmes
 Theindustryevidencebaseshouldbemorewidelysharedandusedtosetbudgetand planning
parameters(e.g.sharedbusinessandmarketingobjectives,sharedeconometrics, shared
trainingetc)
 Businessoutcomes,notjustinputsandoutputs, shouldbetheframeofreferenceforScopeof
Work
 PBRshouldbeused asanincentiveforexcellenceinperformance overandabovebasemargin
 Themarketingbudgetshouldaimtohaveapercentagesetaside forinnovation,
experimentationandmeasurement
 Opportunityexistsforco-invention andcollaborationontechIPprojects
 Reviewingwin-winperformance shouldbeongoing, onaquarterly/sixmonthlybasis,plusa
viewtothelongerterm,notjustannually
Joint Industry Performance Charter
(Draft)

20. Relationship performance principles
• Investingintheclient/agencyrelationshipwilldeliverabusinessreturn
• Thebasisoftrust isacollaborative,clearworkingrelationship,withsharedobjectives,
incentivesandclearKPIs
• Thelong-term valueofrelationshipsshouldbebetterevaluatedandrewardedwithina
relationshipandacrosstheindustrybycreatingarelationshipcontract
• Ourapproachtorelationshipmanagementandremunerationhastoholdweightwithkey
stakeholdersfrombothclientsandagenciesie CFO,CPO,CMOandCEO
• Itistheresponsibilityofclientandagencythoughtleaderstosetthestandardforwin-win
performance forthemarket
• Thewayit’salwaysbeendone,isnotthewayithastobe! Sharingofnewandinterestingways
needstobecomemoreregular
Joint Industry Performance Charter
(Draft)

21. Today’s Performance Adaptathon
- Setting expectations

22. Who we represent
IPA
Finance
Client Service
ISBA
Procurement
Marketing
Intermediaries

23. Our narrative flow
Provocation Inspiration Investigation Experimentation

24. Inputs Outputs Outcomes
Our mental framework for the day
Fee Joint venturePBR

25. Your participation in three AdaptLabs
AdaptLabs
• Time-based Remuneration
led by Martin Telling, Omnicom Media Group, IPA FPG
• Value-based Remuneration
led by Deborah Cornwall, EE and ISBA Compag
• Risk-based Remuneration
led by Ian Priest, VCCP, IPA President

26. Actions not words