Aquent/AMA Webcast: How To Do More With Less: Exploring Decoupling Strategy and Execution for Marketing Projects
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In an evolving marketplace, brands are required to have an active presence in a wide variety of traditional, social and mobile channels. Despite the complexity of the current marketing environment, doing more with less is the new normal. There has been much discussion in the C-suite about how to achieve aggressive marketing goals, yet reduce marketing spend, without compromising the brand. Consolidating agencies, paying for performance, and reducing broadcast spend are common alternatives. However, one idea that is gaining momentum and delivering results is the practice of “decoupling.”
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Aquent/AMA Webcast: How To Do More With Less: Exploring Decoupling Strategy and Execution for Marketing Projects
- 1. How To Do More With Less: Exploring Decoupling Strategy and Execution for Marketing Projects There has been much discussion in the C-suite about how to achieve aggressive marketing goals, yet reduce marketing spend, without compromising the brand. Consolidating agencies, paying for performance, and reducing broadcast spend are common alternatives. However, one idea that is gaining momentum and delivering results is the practice of “decoupling.” Decoupling is a strategy that works; brands around the world are adopting this very effective strategy and saving real marketing dollars. Find out more in this webcast, presented by Tom Reynolds, Vice President, Enterprise Solutions, at Aquent Studios.
- 2. AMA Webcast: How To Do More With Less: Exploring Decoupling Strategy and Execution for Marketing Projects Presenters: Tom Reynolds, Vice President, Enterprise Solutions, Aquent Studios Moderator: Alli Libb, American Marketing Association Sponsored by: The audio portion of today’s presentation is available via broadcast audio. You can also dial in to hear audio Participants (US & Canada, Toll Free): 800.945.9434 International Participants: +1 212.231.2907
- 3. The Evolution of Email: Essentials for Campaign Success May 24, 2012 A Full Day Online Forum Learn more at marketingpower.com/EMAILVX
- 4. Housekeeping Items Recording and Slides You will be provided with a recording of today’s presentation and a PDF of the slide deck Twitter Please reference hash tag: #AMAAquent, when tweeting about this webinar
- 6. Today’s Presenter Thomas Reynolds Vice President, Enterprise Solutions Aquent Studios •Works to create the most efficient and cost effective models for clients’ marketing projects •Provides executive oversight on all major accounts, ensuring that clients receive the right resources at the right time
- 7. How To Do More With Less Exploring a Decoupling Strategy for the Execution of Marketing Projects Presented by Thomas Reynolds Vice President, Aquent Studios 18 April 2012
- 8. Marketing Budget Trends Survey: Has your marketing budget increased, decreased or remained flat for 2012? 8
- 9. Marketing Budget Trends CMO Survey states there will be a modest increase of 8.1% in marketing budgets in 2012 yet there will be a decrease of 39% in hiring. More work, less people! 9
- 10. Recent Cost Reduction Trends Agency consolidation “Earlier this month, GM executives told analysts at a dinner meeting in New York that the company expected to save $2 billion over five years from the consolidation of advertising agencies, globally.” MoneyNews | March 27 ,2012 10
- 11. Recent Cost Reduction Trends Pay for performance Coca-Cola Co. is trying to start an industry wide movement toward a "value-based" compensation model. Basically, this arrangement promises agencies nothing more than recouped costs if they don't perform, but profit markups as high as 30% if their work hits top targets. 11
- 12. Recent Cost Reduction Trends Decrease in broadcast spend Respondents to the Association of National Advertisers/Forrester study of national advertisers said their TV ad spending will remain flat this year. They also reported allocating only 41 percent of their media budgets to television last year (2010) versus 58 percent in our 2008 survey. In 2012, TV ad spending will account for 47 per cent of budgets, up six per cent from levels recorded in 2010, the ANA reported. 12
- 13. Decoupling What it is: What it is not: Separation of Separation of tactical versus tactical versus strategic strategic tasks initiatives. or activities. 13
- 14. Decoupling Survey: Have you tried a decoupling strategy in the past or currently have one? 14
- 15. Decoupling: the Approach tier 0 strategic design - agency relationship complexity and strategic importance tier 1 original design tier 2 design from seed piece tier 3 produce from template tier 4 self-serve 15
- 16. Decoupling: the Approach 16
- 17. Decoupling: the Approach complexity c revisions/ complexity b complexity a adaptations, few multiple steps/ multi-stage, many stakeholders stakeholders, rework steps/stakeholders, pre-existing design original design 18 % 3% 2% strategic importance 1 strategic importance NASCAR externally facing, high brand/ brand guidelines sponsorship revenue impact event collateral revision campaign 24 % 17 % 14 % strategic importance 2 external with moderate brand/revenue impact publications/ ads solution/selection guide webcast 12 % 8% 9% strategic importance 3 internal, or external with low revenue impact poster - internal web landing pages training video complexity 17
- 18. Criteria for Decoupling: Tiering Strategic Importance Criteria 18
- 19. Criteria for Decoupling: Tiering, con’t. Complexity Criteria 19
- 20. Decoupling: Alignment of Resources tier 0 Agency of Record complexity and strategic importance tier 1 Internal or Agency tier 2 Internal or Brand Execution tier 3 Brand Execution tier 4 Brand Execution 20
- 21. Case Study Large agency was expensive Serious budget pressures Irregular brand compliance Long cycle times were inefficient Tactical initiatives assigned to expensive agency resources 21
- 22. Case Study (con’t.) 60% savings in execution work Streamline workflow with cost effective resource alignment Improved focus on execution detail Shorter cycle times = improved speed to market 22
- 23. Case Study (con’t.) 23
- 24. Decoupling Clients 24
- 25. Summary More with Less Be smart Evaluate your strategy Consider decoupling Do it right Chose the right partners 25
- 26. Thank you Contact me at: treynolds@aquent.com 617.535.4541 26
- 27. Questions and Answers How to Submit Questions • Submit questions using the chat box located on the left-hand side of your screen. • Submit questions via Twitter by referencing the hash tag #AMAquent Additional Questions? Contact our speaker at: treynolds@aquent.com General AMA Questions can be sent to: alibb@ama.org
- 28. Thank You for your Participation! Additional Questions? Contact Tom at: treynolds@aquent.com General AMA Questions can be sent to: alibb@ama.org Recording and slides A presentation recording and slide deck will be sent to you Twitter Please reference hash tag: #AMAquent, when tweeting about this webinar Today’s Presentation was brought to you by the ReadyTalk Web Conferencing Platform. If you are interested in learning more about ReadyTalk and their services, please visit www.ReadyTalk.com/AMA
Editor's Notes
- In addition to AMA webcasts - Did you know that AMA also offers virtual events? Coming up on May 24, we invite you to attend The Evolution of Email: Essentials for Campaign Success During this comprehensive event you’ll have the opportunity to learn from email marketing experts, who will present on the latest topics, including: deliverability, design, list growth and new technologies. Registration is free and AMA members will receive exclusive access to conference speakers and give-a-ways! Visit marketingpower.com/emailvx for more information and to register!
- Aquent's marketing practice helps some of the world's biggest brands find talented marketing contractors to achieve their goals. Talk to Aquent about how you can utilize contractors for specialized skills or to tackle fast approaching deadlines. Visit aquent.com to learn more.
- Tom Reynolds is a Vice President, Enterprise Solutions with Aquent Studios, a leading provider of tactical brand execution solutions for Fortune 1000 companies. In his 10 years with Aquent, Tom has worked with over 80 clients to create the most efficient and cost effective models to execute their marketing initiatives. Clients such as Merck, Staples, AstraZeneca, Gillette and Rockwell Automation have engaged with Tom and his team. Tom is directly involved in day-to-day operations of the Studios organization. He provides executive oversight on all major accounts, ensuring that clients receive the right resources at the right time. His subject matter expertise and tenure with Aquent Studios give him a unique perspective on today’s topic. Prior to joining Aquent, Tom was providing a variety of outsourced solutions to clients like Microsoft, AT&T, Sprint and Ford Motor Credit.
- Thank you all for joining today! As Alli said, I’m Tom Reynolds, Vice President of Enterprise Solution for Aquent. I work with Aquent’s largest clients to help identify the most efficient and cost effective ways for them to execute their marketing initiatives. As you all are keenly aware the last few years have been difficult when it comes to marketing budgets. As I meet with clients I hear a common theme, we are being asked to do more with less. The need to maximize budgets is more crucial than ever. Today, I hope we can show you one way clients are maximizing budgets and seeing significant results. It’s called decoupling you may also hear it referred to as unbundling.
- Survey: Was your marketing budget in 2012 flat, increased or decreased? According the the CMO survey conducted last year budgets are being increased by 8.1% in 2012 (which by the way, is below 2011’s increase of 9.2%). So there is an increase in budget but the same report shows that there will be a 39% decrease in hiring of marketers. What does that mean: more work, with less people!
- Survey: Was your marketing budget in 2012 flat, increased or decreased? According the the CMO survey conducted last year budgets are being increased by 8.1% in 2012 (which by the way, is below 2011’s increase of 9.2%). So there is an increase in budget but the same report shows that there will be a 39% decrease in hiring of marketers. What does that mean: more work, with less people!
- Over the past few years there have a been a variety of ways marketers have looked to reduce their budgets. Some have been successful, others not so much, and others still we are waiting to see. Clearly, one of those strategies is to look at agency consolidation. As clients look at gaining economies of scale by reducing the number of agencies that support them. More and more companies are reducing the agency roster list in hopes that more business for fewer agencies will drive costs down. GM believes that through agency consolidation they can save over $2 billion, yes that is with a B, over the next 2 years! We won’t know the results for a couple of years but that is still significant opportunity. Even if they only receive 50% of their expectations it would be a great result.
- One of the other ways clients have identified as a way to reduce marketing spend is a pay for performance model with their agencies. A couple of years ago, Coca Cola was a driving force behind pay-for-performance models. If you could only pay your agency when your could measure the actual results clearly there would be savings. However, this model has not gained much momentum. In addition, it would only apply to the most strategic initiatives executed by a client and not to the bulk of the work which is more execution related.
- Much is being said about the demise of broadcast advertising and according to an ANA and Forrester survey the numbers seem to confirm that although there was a jump from 2011 to projected 2012 spend. Dropping the budget allocations in TV can significantly impact the overall marketing budget. From 2008 until 2010 TV budget dropped 42% from 58% of overall budget to 41%. However, in the last year the TV budget increased to 47% but it still 23% below 2008 levels.
- One of the trends that seems to be gaining momentum is the idea of decoupling or unbundling. At an ANA event last year there were 3 presentations on this topic. It is proving significant results. So what is decoupling? Actually let’s start with what it is not. Decoupling has been discussed for a number of years. However, initially it was discussed in terms of handing off projects between resources so that one team focused on the strategic tasks and another company took the project over and executed the tactical activities of that project. There are some fundamental flaws with that model. The amount of communication and project management to get the project completed was significant and it drove cycle times up for completing the projects. It can also lead to a lot of finger pointing on who was supposed to do what and when. So unfortunately there is often a strong push back on “decoupling” strategies. We hear we tried that and it did not work for us. However, if decoupling is done correctly, which is to identify strategic and tactic projects with the correct teams handling the execution of those projects (not the activities or tasks) from start to finish, there are substantial dollars to be saved. It is crucial to identify specific projects you will assign the execution of to one agency and another group of projects to another resource.
- One of the trends that seems to be gaining momentum is the idea of decoupling or unbundling. At an ANA event last year there were 3 presentations on this topic. It is proving significant results. So what is decoupling? Actually let’s start with what it is not. Decoupling has been discussed for a number of years. However, initially it was discussed in terms of handing off projects between resources so that one team focused on the strategic tasks and another company took the project over and executed the tactical activities of that project. There are some fundamental flaws with that model. The amount of communication and project management to get the project completed was significant and it drove cycle times up for completing the projects. It can also lead to a lot of finger pointing on who was supposed to do what and when. So unfortunately there is often a strong push back on “decoupling” strategies. We hear we tried that and it did not work for us. However, if decoupling is done correctly, which is to identify strategic and tactic projects with the correct teams handling the execution of those projects (not the activities or tasks) from start to finish, there are substantial dollars to be saved. It is crucial to identify specific projects you will assign the execution of to one agency and another group of projects to another resource. Survey: Have you tried a decoupling strategy in the past or currently have one?
- Drawing the line between strategic marketing and tactical is not easy. We do not recommend taking a look at your deliverables and randomly assigning them based on one persons opinion, You need a well articulated methodology for segmenting strategic and tactical initiatives – one that both marketers and creatives understand and can agree on We recommend a tiering strategy that is based on two axis’. One is the strategic importance of the project and the second is the creative complexity of the work. Once you identify specific criteria for evaluating strategic importance and creative complexity – the process of tiering initiatives and deliverables becomes easy and even intuitive. Based on those effort s we generally assign 5 tiers to the work as noted here. Tier 0 being the most strategic and tier 4 the least with varying degrees between.
- When we establish tiering strategies for our clients we want to have a strategy that will get them to the best decoupling . Each organization has a unique criteria for what is strategically important to them and trust me you will likely have some spirited discussion among the team on this one! Complexity of work is a little less unique but based on industry and deliverable types there can be some minor variance.
- , here is a sample high level tiering structure we did for a client. In this case we looked at the complexity of the work based on the number of stakeholders that were involved in the process and also whether there was original design required, if there was existing design to work from or whether it was straight revisions or adaptation to existing design. The strategic importance for this client, and this varies by client, was based on revenue impact So with this client as you can see in the top right hand corner, NASCAR Sponsorship Program is high in strategic importance and the complexity is high based on revenue impact and the fact that would require original design. However, internal posters on the lower left hand side, are often template driven and utilize existing assets so therefore are low on complexity and lower on strategic importance. People often look at this tiering strategy and say “great this will allow us to prioritize work. It does not. What it does do is ensure you have the right resources aligned the the right projects., once that happens there becomes less of a prioritization effort because there is less juggling between highly complex work and lower level tactics. Each has the right resources on it.
- So the previous example showed how one client defined strategic importance and complexity but there are many criteria based on your industry and the size of your organization. Under strategic importance here are a few that we have seen most often: Size of audience: how many people are going to see this, what is our total exposure if we do this direct marketing piece how many will it reach an email campaign, how many people a web site, how many unique visitors Influence: Is this designed for a new customer or an existing customer Different values are assigned to each of these audiences Duration: What is the likely “shelf-life” for this project. is this a single day promotion or a mobile application for customers Newness: Exploring new channels, markets or audiences Are you looking at new channels tablet, mobile, social
- From a complexity perspective it most likely involves: Production complexity, not only the physical specs but the number of pieces that may need to be completed as part of the initiative How many and who are the key stakeholders Content complexity: Images, legal content Newness-on brand or under existing templates or not We recommend you get a team from marketing, from creative and from procurement to create your own strategy. The marketing people can offer insight into the strategic importance of an initiative, creative can offer insight into the complexity and procurement can help establish the metrics that can help you track your progress and the savings you can realize. Please understand, this is not an easy endeavor and, depending on the size of the organization can take 3-12 months. It seems very straightforward and as you are doing it the Tier0/1 and tier 4’s are relatively easy to identify. But when you get to a tier 2 versus one or 3 versus two, there are some very fine lines. In addition, when you go through this exercise, realize that the strategy is going to apply to 80% of the initiatives. You are still going to have those 20% that are flyers and do n ’ t easily fall into the model.
- Once you have completed the tiering process you can assign projects to the right resources. The decoupling line will vary from organization to organization and we have seen several models that are successful. Tier 0 is almost always done by the strategic agency. Although there are some companies that do everything internally although they are very rare. Tier 1 can be done by the strategic agency or in some cases clients will establish an internal agency to execute these initiatives Tier 2 starts to cross over into being done again by an internal agency or brand execution agency but in most cases does not have to be done by the strategic agency Tier3&4 should not be done by the strategic agency and most likely handled by the brand execution agency
- A large pharmaceutical client was facing significant budget pressures and realizing that their agencies were expensive. Brand compliance was challenging. Cycle time for smaller projects was drawn out and they realized they were giving tactical execution related work to expensive resources. The decided to tier their work and bid the work according to the tier.. Approximately 39% of the work was tier 3 and 4.
- The clients goal in the decoupling process was to realize a 60% savings on the tier 3 and tier 4 work. They wanted to get the right resources aligned to the right projects, have the agencies do what they do best in focusing on the strategic projects and the the execution work done by a brand execution agency. By utilizing a brand execution agency they knew the focus would not be on the big idea or the blue sky design but the tactical execution detail that would lead to shorter cycle times.
- Aquent Studios was selected to be the Tier 3 and 4 brand execution agency. We were able to reduce the costs for this work by over 60% target established by the client. Our focus on executional detail allows us to do the work faster and generate significant savings. Last quarter our average cycle time from receiving the files to 1 st review to the client was 1.8 days. This client was able to save in excess of $20,000,000 in 2011 by leveraging a detailed and aggressive decoupling strategy. The client continues to work with strategic agencies and they create outstanding campaigns for the client but those are not the resources that are required to do versioning, edits, small creative changes and template driven work.
- Clients like Merck, Rockwell Automation, Pepperidge Farm, Booz Allen Hamilton, Gillette and AstraZenedca have all leveraged a decoupling model in order to reduce costs and be more efficient in the delivery of their tier 3 and 4 tactics.
- We are all being asked to do more with less, new channels, new audiences, new products We have to find ways to be smarter about the use of our marketing budgets Decoupling is a smart strategy Have to have a defined strategy Tieirng is an effective way to decouple Evaluate your initiatives based on strategic importance and creative complexity Once you have done that, identify the decoupling line and which resources will align with which tier of work Strongly consider utilizing a brand execution agency for a minimum of your tier 3 and 4 tactics
- We are all being asked to do more with less, new channels, new audiences, new products We have to find ways to be smarter about the use of our marketing budgets Decoupling is a smart strategy Have to have a defined strategy Tieirng is an effective way to decouple Evaluate your initiatives based on strategic importance and creative complexity Once you have done that, identify the decoupling line and which resources will align with which tier of work Strongly consider utilizing a brand execution agency for a minimum of your tier 3 and 4 tactics