1) The document discusses the need for transformation in the marketing communications industry in order to maximize value for clients and agencies. 2) It notes issues with the current focus on costs, outputs and metrics in media and calls for a shift to evaluating performance and value. 3) The document suggests agencies should seek less competed areas, manage their own metrics, and view communications through the consumer's lens rather than their own.

1. Wednesday 3rd November 2010
Which Way Now ?
Stick or Twist
This document is private and confidential and contains privileged and proprietary information.
Which Way Now? Upstream or downstream?
Andy Pearch, Co-Founder, MediaSense

2. 2
Mark Hunter, “Transformational change is required now
in the marketing communications industry to ensure
that clients and agencies maximise the opportunity
for brilliant and effective work”
Mark Hunter
CEO, Molson Coors

3. Stephen Miron, “Auditors count price but they need
to count value”
3
Stephen Miron
Chief Executive, Global Radio

4. Richard Pinder “Tactics, measures and metrics are
now in huge conflict. There’s only one way to
reintroduce objectivity: go back to the consumer
and view the communications world through their
lens, not ours”
4
Richard Pinder
CEO, Publicis Worldwide

5. Steve Williams: “If we didn’t have auditors or a pitch
for a year, you watch the quality of client work go
up.”
5
Steve Williams
Chief Executive, OMD UK Group

6. 6

7. Best Practice?
7

8. 187 media pitches in 2008
260 media pitches in 2009
8
Source: RECMA

9. 9
Source: WFA 2010
8%
8%
31%
39%
39%
54%
77%
77%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Existing relationship not working
Organisational/Strategic change
Motivateincumbent
Improveterms
Better team on business
Statutory
Improveservicelevels
Improvemedia costs
What were the main reasonsfor change and objectives?

10. The illusion of “savings”
10
“Savings”

11. Are we looking in the right direction ?
11

12. 1995 40% audited
= 6% advantage
12

13. 2010 80% audited
=
13
1% advantage

14. 14

15. 15

16. HSBC
Halifax Lloyds
Barclays
Natwest
Santander
ABC1
Adults
Profile
16-44 Adults Profile
10 x Magnification

17. HSBC
Halifax Lloyds
Barclays Natwest
Santander
ABC1
Adults
Profile
16-44 Adults Profile
Actual Size

18. Consolidation of Sales Points
18

19. 36% of creative agencies
receive over 50% of their
PBR
19
Source: ISBA Paying
for Advertising

20. 87% of media agencies
receive over 50% of their
PBR
20
Source: ISBA Paying
for Advertising

21. “Media agencies role in successful
marketing comms will diminish as they
increasingly look after their own interests
rather than their clients”
MediaSense 2010 Survey
21

22. “They get data. They have a commercial
eye. The issue is increasingly they focus on
delivering surrogate media outputs rather
than true insight and advantage for a brand
or business.
22
MediaSense 2010 Survey

23. The nature of the churn and pitch culture,
reveals media agencies to be commoditised
in clients eyes.
23
MediaSense 2010 Survey

24. “Significant clients will move buying in-
house or have minimal agency contact,
media owners will increasingly encroach on
other agency activities such as
research/sponsorship/creativity”
24
MediaSense 2010 Survey

25. Not a pretty picture
25

26. 26

27. 27
Reach /
Frequency
Click thru rate
Expansion Rate
Interaction Rate
Game play rate
Video Play rate
Video completion
rate
Sound initiated
video play rate
Dwell time
Likes, shares etc
Impressions,
clicks
Registrations
Downloads
Applications
Sales
...

28. 28
Digital networks act as antennae

29. In digital, the price paid has
little bearing on Performance
29
Plan 1 Plan 2 Plan 3
Cost per 1000
Conversion Rate
Cost per Sale
£1.50 £2.00 £2.50
5% 6% 8%
£38 £37 £28
Click thru rate 0.08% 0.09% 0.11%

30. 30
Current focus
Cost
Output
Future focus
Cost
A: “Move away from
measuring inputs to
measuring outputs.”
MediaSense 2010 Survey
Q: And finally ... if you had one wish,
what change would you make to the
way media performance is evaluated?
Output

31. Social media is a performance accelerator
31

32. Seek out Less Competed Areas
and define your own Metrics
32

33. 33

34. “The client that agencies
want to deliver their best
work for”
34

35. You must carry more risk
to become a long term
partner
35

36. 36

37. 37
Best Practice Better Practice
 Contract cycle pitches
 Cost the key metric
 CPTs and Reach vs Pool
 Retrospective measurement
 Metrics fully-controlled
 Pay for time
 Gut-feel decision-making
 Investments commercially-driven
 Media Owners at arms length
 Strategic reappraisals
 Performance the key metric
 CPEs and CPAs vs Target
 Adaptive measurement
 Metrics are managed
 Empirical decision-making
 Investments results-driven
 Media Owners fully involved
 Pay for value

38. 38
...clients need independent help
to navigate change and improve
performance: they don’t need to
hear they can get a cheaper deal
down the road...”

39. 39
“If agencies can understand the link
between media and its business impact,
they will become fundamental”
MediaSense 2010 Survey

40. 40
Media Agencies have the best line of sight
across all channels and also have deepest
understanding of consumer and audience
behaviour in relation to both brand and
media consumption”
MediaSense 2010 Survey

41. “Simplistic benchmarking using
aggregate statistics is valid only for
standardized processes that are
intended to produce low-cost, non-
differentiated services for internal or
external customers”
41

42. 42
Clarence Darrow
“It is not the strongest of the species that
survive, nor the most intelligent, but the
one most responsive to change.”

43. Wednesday 3rd November 2010
Which Way Now ?
Stick or Twist
This document is private and confidential and contains privileged and proprietary information.
Which Way Now? Upstream or downstream?
Andy Pearch, Co-Founder, MediaSense