Earlier this week the AFA launched their Advertising Effectiveness Awards, of which P3 is an official supporter.

It is interesting looking at the discussions around effectiveness - primarily the results achieved.

As the chairman of the AFA Effectivness Awards, Matthew Melhuish said "Advertising, in all its forms, is a powerful tool capable of transforming businesses and significantly adding to top-line growth. The ongoing challenge is to effectively demonstrate this power and prove ROI not just to marketers but to Chief Executives, Chief Financial Officers and the entire business community."

But when it comes to ROI it is often a greater struggle to account for the created value against the incurred cost. ROI has two components.

1. The value of the return - how has the activity added value or created wealth to the business.

2. The cost of the investment - what was spend and what costs should be apportioned to the base cost to calculate the ROI.

Of course, while many focus on the outcomes, it is equally important to focus on the cost control. Not at the expense of effectiveness, but certainly eliminating waste and avarice is an effective way to control costs and thereby improve ROI. Especially in situations with high or uncertain outcomes. By managing costs you minimise the cost of failure, which is a possible outcome in any marketing activity.

Author: Darren Woolley

In The Australian today, Simon Canning has drawn attention to the Campaign Brief blog.

Campaign Brief is the national and regional magazine of the advertising creative community, often referred to in agency pitches to new clients because they publish a "creativity index" for agencies based on awards one against size (based on the out-dated billing metric). Mind you it is only agencies ranked highly on creativity (ie Have won a lot of awards - sometimes for the one campaign entered into multiple awards) that use this reference.

However, reading through the Campaign Brief blog it seems it has become a "slagging" match to see who can put down their competitors, all with the protection of anonimity.

It is a pity this creative energy could not be harnessed more effectiveness to build the reputation of the industry by delivering outstanding creative solutions. But perhaps it is just a reflection of how many creatives are more focused asnd obsessed by winning Awatds rather than doing great creative for their clients' business.

Author: Darren Woolley

The marketing process

While marketing is more than simply marketing communications such as advertising and direct marketing, the marketing processes invariably leads to a point where external provider are engaged, be that to plan and buy media, create advertising, undertake market research, public relations, sales promotions and more. The efficacy of the Marketing Communications process is directly impacted by the other marketing disciplines.

Measuring process efficacy

While internal marketing processes can be mapped, reviewed, benchmarked and re-engineered, the measure of efficiency is often measured in the reduction of resources. While this is a valid measure of financial impact, it pale into insignificance compared to the impact poor process has on the efficiency of engaging external providers, where the total spend (especially in media) can be significantly higher and therefore the impact of poor process is significantly larger in financial terms.

Benchmarking external providers relationships

There are two types of expenditure with external providers being:
1. The remuneration paid to the provider for their services. Eg. Retainers, Fees, Head hours etc
2. Third party costs spent through the provider eg. Media, Production, Promotional items etc

Poor marketing process invariably leads to increases in both expenditures. In remuneration, we see resource requirement rise above the benchmark requirements. In the second we see either premium rates being levied or missed opportunities to yield the typical discounts available in the market place.

By benchmarking these relationships, P3 is able to quantify the level of inefficiency in the current process and determine the drivers. The three main drivers of inefficiency are: poor time and project management, lack of transparency, measurability and accountability and poor strategy execution. All of these are influenced or driven directly by the internal marketing process. Therefore quantifying the current inefficiencies and the drivers creates the basis of a strategy for reviewing the internal marketing processes to deliver the benefits.

External provider benchmarking process

The P3 benchmarking process captures retrospective data on:
1. What services were provided?
2. What resources were required?
3. What costs were incurred?

These are then benchmarked to determine and quantify the efficiency against the industry practice. Interviews are undertaken to identify which drivers are influencing this result and then these are reported to the marketer with recommendation on how to correct and realise the identified efficiencies.

Author: Darren Woolley

For years advertising agencies and their clients have demanded greater flexibility from traditional media. Why can't there be 20 second TV spots or 40 second radio spots? Why can't there be newspaper ads that weave through the editorial or outdoor advertising that interacts with the public? (Woops - yest we do have out-of-home that is interactive).

My friend Shawn Callahan from Anecdote has drawn my attention to this blog about "Newspaper adscapes".

The blog reports that "Adscapes' are the latest look in newspaper advertising. No longer are newspaper ads relegated to squares and rectangles. Today, advertisers can attract attention with a variety of shapes and sizes".

But more interesting are the comments regarding the intrusive nature of the format to the boring content within most newspaper ads.

Author: Darren Woolley

In B&T yesterday, they reported that "ANZ has pulled all its advertising from News Limited properties including print, online and pay TV provider Foxtel, in retaliation to a front page story printed by The Daily Telegraph and other News Limited titles yesterday."

It turns out that the bank maintains that the report is technically wrong as ANZ do not have call centers in India and it appears they made News Limited aware of htis prior to the story running.

It goes on to quote Ken Miller, marketing professor at UTS, who said "by pulling its ads from News Ltd properties the bank might be missing out on the rich media opportunities available through its newspapers, magazines and television stations."

But isn't the issue the power and effectiveness of front page PR (especially bad PR) has effectively negated the impact of the work the ANZ marketing team is trying to achieve in their advertising. Would it not be throwing good money after bad running advertising alongside and in the same media that has run a negative PR story. Wouldn't ANZ be better taking their ad spend on the News Limited titles and using this in PR campaign to "correct" the incorrect perceptions created by the News limited stories.

In our last newsletter we reviewed the power of PR in the marketing mix. Perhaps the ANZ team have read it. In it it talks about research studies conducted in the late 1990's in the US by AT&T's Public Relations research department to measure the interaction between news coverage and advertising concluded that news coverage can have a substantial impact on consumers, on a par with advertising.

They suggest that news coverage can substantially impact the investment a company makes in various forms of paid marketing communications and that expert management of media relations is critical to protect and leverage this investment.

Interestingly, the studies suggest:

* when there is 'normal' news coverage, news and advertising work together, and incremental advertising has a positive impact on attitudes

* in times of widespread and extremely positive news coverage, the incremental positive impact of advertising is much less than in normal times

* in times of widespread and extremely negative news coverage, incremental advertising does not have a positive incremental impact, and may even have a negative effect

* advertising can, and should in some circumstances, be 'turned up and down' according to the level of unpaid news coverage

Author: Darren Woolley

In AdAge this week, it was reported that as Sony struggles "to transform itself into a digital powerhouse, Sony Corp. is reaching out to multiple ad agencies to create its first corporate branding campaign in years."

"The effort will be designed to create a common message for a sprawling company infamous for siloed business units".

Siloed business units and multiple stakeholders is not a new challenge for marketers.
But what is becoming an increasing challenge in executing a cohesive brand communication campaign is managing the increasing number of specialist suppliers involved in the process.

There was a time when marketers could execute a communication campaign with their agency (creative & media) and perhaps one or two specialist suppliers. Today, the explosion of channel specialist means that marketers may be managing five or more specialist suppliers in the execution of one campaign.

This creates a huge amount of management and co-ordination and then often the result is disappointing for the effort as each supplier has been working to their own end rather than to a collaborative end.

On Wednesday 25 October, 2006 @ 1pm AEST you are invited to participate in a webinar (online seminar) hosted by Premiere Global Services.

In this seminar I will be talking about the various agency management models we have reviewed and developed and provide insights into what makes them work and how to avoid failure.

For more information on the webinar click here.
I hope you can join in.

Author: Darren Woolley

A recent post on Forbes website has a creative approach to addressing the declien in effectiveness of the 30 second spot provided by Ken Krimstein, Creative Director at Seiter & Miller Advertising in New York City.

His options to address the decline of the 30 second spot in the face of TiVo and other PVRs are:

1) Embed the programming in commercials.

2) Beat TiVo at its own game.

3) Now the most radical solution of all. MAKE SOME GOOD COMMERCIALS!

As Ken points out, option 3 is not easy. It takes creativity and risk-taking on the part of both clients and agencies. But then again, neither is coming up with great five-second silent commercials to fulfil option 2.

Author: Darren Woolley