The ANA Throws down the Gauntlet for Advertisers and Agencies - Mike Drexler

The 2011 ANA Financial Management Conference set the stage for what may be the most important strategic process of the decade That is how advertisers and agencies will work together in the future to ensure a successful and enduring relationship This is necessary now more than ever for several reasons Advertisers will no longer invest in media without knowing what to expect in return The idea of wasted media dollars is no longer acceptable Advertisers now insist that every dollar must be accounted for and measurable with full transparency The return on investment must always be greater than the spend or adjusted to accommodate the shortfall either in dollars strategy or executionThe two elements that bring the relationship between advertisers and agencies into focus are cost and benefit On the cost side procurement takes center stage How much can be saved from expenditures in resource workload media spend and compensation And how should costs be managed and controlled On the revenue side the result comes from increased sales That39s where the marketing function provides the expertise to invest effectively to produce maximum consumer response and contribution to brand growthBoth procurement and marketing need to be aligned of course to deliver bottom line profit The role of the agency is to work harmoniously with both parties by delivering creative and media strategies and execution efficiently and keeping their operating costs under control At the same time they need to provide the required leadership and innovation to insure full value in the communication process So what39s the problemWhen you ask advertisers about the procurement and marketing functions they are not aligned Procurement people believe they play a much larger role in agency review functions than their marketing colleagues believe they do In fact according to a 2010 ANA study there is a 33 average gap between the belief that procurement and marketing people hold regarding procurement39s role in evaluating several agency functions Here39s another statistic If you ask all three quotpartnersquot procurement marketing and their agencies about the health of procurement39s relationship with the agency it39s very discouraging Only 40 of agencies believe that procurement has a healthy relationship with the agency and only 50 of their marketing colleagues believe they do Not surprising however is that 91 of procurement people believe they have a healthy relationship with the agency Want more disconnect A startling 4 of agencies believe that procurement understands marketing and only a third of marketing people believe that their procurement colleagues do Here at least procurement people acknowledge that they need more understanding of the marketing function with about half saying they do When all is said and done the most disturbing question leads to the following What is the inflection point whereby excessive cost reduction will cripple a brand39s growth because of insufficient investment in marketing and resourcesClearly all three quotpartnersquot are not always on the same page and that spells trouble for the future unless it can be corrected honestly with an open mind and without resentment or defensiveness The process must of course have a monetized and measurable consideration In other words a balanced equation between cost savings on the supply side and investment on the demand side is the necessary model for success This must include a clear definition of roles and responsibilities an agreed upon measurement for value and accountability a curriculum for knowledge and understanding of specific qualitative and quantitative functions and methods for benchmarking and a collaborative approach to setting goals and continuously improving the process The ANA has put forth a welcomed first step in the formation of an ANAAAAA task force committee to investigate the issues and develop recommendations Hopefully we will not have to face the same situation next year It will be a sad day if we doShare your thoughts and comments hereMike Drexler is currently a Managing Partner at DrexlerFajen ampamp Partners a media agency review firm that works with advertisers to evaluate their agenciesamp8217 performance He can be reached at mikedrexlerfajencomCheck us out on Facebook at MediaBizBloggerscomFollow our Twitter updates MediaBizBloggerMediaBizBloggers is an openthought leadership blog platform for media marketing and advertising professionals companies and organizations To contribute contact Jackmediadvisorygroupcom The opinions expressed in MediaBizBloggerscom are not those of Media Advisory Group its employees or other MediaBizBloggerscom contributors Media Advisory Group accepts no responsibility for the views of MediaBizBloggers authors

Become a Thought Leader. Share your thought leadership article with industry professionals & have them archived in Thought Leadership

The ANA Throws down the Gauntlet for Advertisers and Agencies - Mike Drexler

Author

Publish date

Channel

Mike Drexler

Lead Human: Carolyn Everson on Courage, Culture, and the Human Future of Leadership (Video) - By Jack Myers

More Videos:

Become a Thought Leader. Share your thought leadership article with industry professionals & have them archived in Thought Leadership

The ANA Throws down the Gauntlet for Advertisers and Agencies - Mike Drexler

Enjoying This Commentary? There's More to Love

Mike Drexler

Lead Human: Carolyn Everson on Courage, Culture, and the Human Future of Leadership (Video) - By Jack Myers

The payment was successful

Cookies