www.trinityp3.com On Tuesday December 4, 2017 Michael Farmer, author of the award winning marketing business book Madison Avenue Manslaughter presented his Plan B for the industry to turn the manslaughter into a make over that would get brands and agencies moving again. This is the presentation where he defines why the industry needs a Plan B and what that Plan B should look like to deliver a Madison Avenue Makeover. The video of his lecture can be found here https://www.youtube.com/edit?o=U&video_id=zNhCKd3V-MA The transcript of his speech can be found here https://www.trinityp3.com/2018/02/plan-b-turning-madison-avenue-manslaughter-into-makeover-part-1/

1. marketing management consultants
Plan B:
Madison Avenue Makeover
Michael Farmer
TrinityP3 USA
December 4, 2017
© Copyright 2017

2. marketing management consultants
Plan B
What you do when
Plan A self-destructs

3. marketing management consultants
Time for Plan B

4. marketing management consultants
He’s Plan B?
Time for Plan C

5. marketing management consultants
Don needs Plan B

6. marketing management consultants
Plan B
Drowning in
deliverables

7. marketing management consultants
Plan B
The consultants are
coming

8. marketing management consultants
Plan B
Even for Holding
Companies

9. marketing management consultants
Sir Martin
Needs
Plan B
WPP Share Price 2017

10. marketing management consultants
Plan A has self-destructed
• Money and growth … dried up
• AOR relationships … disappeared
• Respect for agencies … a thing of the past
• Commodity pricing … worse every year
• Reviews … at the drop of a hat
• In-house agencies … a real threat
• Depressed salaries … invisible bonuses
• Client cutbacks … less faith in marketing

11. marketing management consultants
What is Plan B?
Before you decide,
… know what Plan A problems
need to be solved

12. marketing management consultants
PRICE,
PRODUCTIVITY AND
PROFITABILITY

13. marketing management consultants
Icarus Agency Office with 10 Clients
Client Name Fees FTEs Hours Fees per Hour
Alpha $1,423,811 7.2 12,679 112.30$
Bravo $1,640,593 17.1 30,070 54.56$
Charlie $842,052 5.3 9,402 89.56$
Delta $500,204 2.0 3,584 139.56$
Echo $3,737,841 13.9 24,455 152.85$
Foxtrot $67,345 0.3 544 123.88$
Golf $1,988,342 11.2 19,795 100.45$
Hotel $7,464,519 21.3 37,456 199.29$
India $1,780,009 6.2 10,960 162.41$
Juliet $3,558,578 9.4 16,572 214.74$
Total $23,003,295 94.0 165,515 138.98$ **
** Supports $104,000 – $110,000 in average salary per FTE

14. marketing management consultants
“Workload?”
“Income”
“Resources
& Costs”

15. marketing management consultants
“Income”
“Resources
& Costs”
PriceProductivity
Profitability
“Workload?”

16. DECLINING
PRICE FOR
AGENCY
WORKLOADS
-62.5% from ’92

17. INCREASED
OUTPUT PER
CREATIVE
+128% from ‘92
OUTPUT PER HEAD:
(SMUs PER CREATIVE PER YEAR)
Ideal level = 4.1

18. marketing management consultants
Office diagnosis – with workloads
Client Name
Fees Deliverables SMUs
Price (Fee per
SMU)
Creative
FTEs
SMUs per
Creative
Alpha $1,423,811 444 40.9 $34,837 2.3 17.8
Bravo $1,640,593 425 38.0 $43,219 7.2 5.3
Charlie $842,052 61 12.5 $67,611 2.0 6.4
Delta $500,204 73 4.0 $124,160 0.7 5.5
Echo $3,737,841 33 20.2 $185,459 4.7 4.3
Foxtrot $67,345 4 0.3 $194,966 0.0 8.2
Golf $1,988,342 26 7.4 $269,574 2.4 3.1
Hotel $7,464,519 158 26.8 $278,808 8.2 3.3
India $1,780,009 17 6.0 $297,627 1.8 3.4
Juliet $3,558,578 15 8.7 $407,764 4.2 2.1
Total $23,003,295 1,256 164.7 $139,693 33.4 4.9
Icarus ScopeMetrics® for Top Ten Clients -- 2015 SOWs
SMU’s = ScopeMetric® Units

19. marketing management consultants
Resource Allocation
FTEs per
SMU
Price per SMU (by client)
Office or industry average,
Resource & Price
High Price,
High Resource
Clients
(Overperformers)
Low High
High
Low Price,
Low Resource
Clients
(Underperformers)

20. marketing management consultants
Creative Productivity
SMUs per
Creative
Per year
Price per SMU (by client)
Office or industry
average, Creative
Productivity & Price
Low High
High
High Price,
Low
Productivity
Clients
Low Price,
Stretched
Productivity
Clients

21. marketing management consultants
PROFITABILITY

22. marketing management consultants
AGENCY RESOURCES – to maintain profit levels
COMMISSION ERA CURRENT ERA

23. marketing management consultants
Similar Competitors but different performance
The typical Saatchi & Saatchi
Account Executive salary is $52,943.
The typical Bain & Company
Associate Consultant salary is $77,172
Data source: Glassdoor.com 1/2017

24. marketing management consultants
Billing multiples
2.3x salaries 5.0x salaries

25. marketing management consultants
Hourly billing rates
The typical Saatchi & Saatchi NY
Account Executive: $66/hour
The typical Bain & Company NY
Associate Consultant: $214/hour

26. marketing management consultants
Bain & company

27. marketing management consultants
Saatchi &
Saatchi
Our Purpose
Who we are
and what we
stand for
? ?

28. marketing management consultants
Leadership
Al Ross, The New Yorker, The Cartoon Bank. With permission

29. marketing management consultants
Decide: What’s wrong with Plan A
• Agencies have not exercised control over pricing
• Pricing is in decline because workloads have been ignored
• With declining prices, agencies have downsized
• With downsizing, agencies have eroded their capabilities
• With eroded capabilities, agencies have failed to solve
complex client brand problems
The fundamental problem to be solved is the
pricing problem

30. marketing management consultants
MISSION

31. marketing management consultants
Strategic mission (Agencies on behalf of clients)
1. Mission. Identify, quantify and realize brands’ full
performance potential
2. Relationship Requirement. Negotiate a Top level
Strategic Partnership -- an agreed LT program to
achieve brands’ full potential
3. Skills Requirement. Consulting-like business analytical
skills, leading to new brand strategies. Then….Scope of
Work development to achieve the strategies

32. marketing management consultants
Scope of Work management

33. marketing management consultants
SOW challenge
1. Required Role. The Agency must design and negotiate
recommended SOWs
2. Remuneration. Agencies must negotiate fees based on SOW
workloads
3. Agency Policy. “Every client in every agency office must have its
SOWs documented and measured in a uniform agency way.”
4. ScopeMetrics®. Use our SOW measurement system – the only one
in the industry to quantify SOW workloads for fee-setting purposes
(Google “ScopeMetrics®”)

34. marketing management consultants
Accountability

35. marketing management consultants
Accountability challenge
1. Requirement. Account Heads must be held accountable for results
-- for fees, workloads, resources
2. Overview. Agency top management must measure, review and
manage Account Head performance.
3. Requirements. Use ScopeMetrics®, and the use of ScopeMetric®
Units (SMUs) to measure workloads
4. Action Plans. Account Heads must develop “corrective action plans”
for clients who underpay relative to SOW workloads

36. marketing management consultants
In Summary
1. Reposition the agency to analyze and fix client brand problems
2. Create a culture of measurement and accountability
3. Implement ScopeMetrics® to measure workloads and performance
4. Track, measure and negotiate remuneration based on SOWs
5. Hold Account Heads accountable for fees, workloads and
resources
6. Review and measure Account Head performance
7. Fix underperforming clients
8. Achieve premium pricing (Price per SMU) based on
positive results

37. marketing management consultants
Plan B

38. marketing management consultants
For more information on Plan B contact
TrinityP3
New York
+ 1 (646) 666-7142
Sydney
+61 (2) 9964 9900
Singapore
+65 6631 2861
London
+44 (203) 790 9229
people@trinityp3.com
www.trinityp3.com
TrinityP3.com/blog/
@TrinityP3
TrinityP3
TrinityP3.StrategicMarketingConsultants