One of the catch cries of many agencies is that they practice financial transparency. However, the practice is less common than the rhetoric in the cases we review.

One of the services offered by P3 and decried by many agencies is our production assessments where we review the proposed costs and estimates prepared by the agencies prior to the advertiser approving the cost.

This assessment is designed to provide the advertiser with the reassurance that the proposed cost represents good value for money. It is a service that would be less popular with advertisers if agencies actually did practice financial transparency and provided estimates and quotations that were detailed and clear.

Continue reading "Why do agencies talk of financial transparency and do not deliver it!" »

A recent article in AdAge was sent to me by Patricio de Matteis at Accenture Marketing Sciences.

The headline read "P&G Pilots New Agency Model for a Digital Age".

Jack Neff, the writer states "P&G is testing a system that essentially designates one agency as a "single point of contact" on each brand -- and sounds an awful lot like the old full-service agency model the marketer, and most agency holding companies, dismantled more than a decade ago in favor of agency specialization."

But this is NOT an integrated agency offering. Instead what it is a lead agency or Central Strategy Group model which I detailed in a webinar almost two years ago.

Continue reading "P&G wants a single contact point for each brand across disciplines?" »

Imagine you have a script with a voice over to be recorded and this same voice over is going to run in six different versions of the commercial for the same brand or product on a national campaign for 12 months. How much is the voice over talent fee?

Interestingly, according to the Media, Entertainment & Arts Alliance (MEAA) Award for voiceover talent it depends on the medium. You see, if those six versions are radio then the cost is $360. But if the same voice over recording is applied to six 30-second television commercials the cost is six times $650 or $3,900.

Continue reading "Should voice over fees be paid by media or execution?" »

Across the Asia region and in fact globally, there is a huge dissatisfaction with the concept of performance based remuneration or payment by results (PBR) from both the agency and advertiser perspective.

This is due to the number of factors, including:
1. It is often difficult to reach agreement on what the metrics should be
2. PBR is often used to reduce agency profitability rather than provide an incentive
3. Measurement can be complex and complicated to measure
4. Advertisers often feel they over pay, while agencies feel under rewarded
5. Marketing budgets lack the elasticity to accommodate the payment

In our experience, the fundamental problem is that PBR is more about stick than carrot and that perhaps a better approach is to forget performance and focus on profit sharing.

Continue reading "Performance based agency remuneration or profit sharing?" »