Issue 124, 29/09/10

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Welcome to the September edition of TrinityP3's e-newsletter. Here we bring you updates on the people, purpose and processes that are important to the marketing industry.

Have a question? Just ask us, we'd be happy to help.

Why PBR fails and what to do about it

Performance based remuneration or payment by results (PBR) is a component of many agency remuneration deals, but the fact is that in most cases both Agency and Client will tell you that it does not work.

The concept of providing a bonus payment for achieving results or rewarding desired behaviour is very attractive and has great merit. The problem is that it is rarely executed effectively enough to deliver the strategic outcome.

This is because of some very fundamental mistakes people make in implementing PBR, which include:
1. The stick is bigger than the carrot
2. The objective is virtually unobtainable
3. The calculation is way too complex (or too expensive)
4. The metrics are irrelevant to the business
5. Linking contribution and value creation to payment

Continue reading "Reasons why performance based remuneration or payment by results often fail"

Self assessment surveys flawed

Why self assessment surveys are flawed in Client/Agency relationships.

When British drivers were asked to assess driving ability in a survey:
1. 40% rated the overall standard of driving as bad but only 2% rated their own driving as bad
2. 24% rated the overall standard of driving as good, but 75% rated their own standard as good

In the same way, many marketers and procurement professionals are using self assessment systems to monitor and manage the relationships and performance of their agencies and other marketing services providers. These systems use gap analysis which measures the "gap" between the self assessment by the supplier/agency against the same criteria as the buyer/marketers assesses the supplier/agency.

BUT The ability of individuals to have self awareness is flawed as demonstrated by Dunning, Heath and Suls.

Continue reading Why self assessment surveys are flawed in client/agency relationships

Spikes Asia success

Darren Woolley's recent Workshop at Spikes Asia 'Is Creativity Valued?' was a huge success.

Through group discussions, participants challenged and created a set of principles for agency remuneration that recognise creativity as the source of business value.

Findings included:
• If agencies don't value their creative output, why should their clients.
• Taking action to legally protect the IP created demonstrates the level of value agencies place on their creative product.
• Ideas and concepts are products, not services, and so should be valued and provided that way.

Darren's summary included: "Most of the participants were from the agency side, particularly creative and account management, and quite senior. We had lots of enthusiastic feedback from the group as many of the participants had not had the chance to think about creative ideas and concepts in this way. The workshop went for 90 minutes yet some wanted more time."

Woolley to speak at Caxtons

Caxtons 2010 Seminar & Awards
Quay West Resort, Noosa, Australia
October 22 - 24, 2010

It’s shaping up as a vintage year for hot debate and brilliant insights from some of advertising’s most notable, not to mention frequently controversial, figures.

The line-up of speakers includes Jon Wilkins, co-founder of international advertising powerhouse Naked; legendary advertising icon, Ted Horton; Peter Sinclair, the man charged with marketing more than 58 beer brands at Carlton & United Breweries; and marketing management guru Darren Woolley. 

For information on the 2010 Caxton Seminar and Awards, contact Justine Kendall at Two de Force, +612 9281 8788. 

Most In Demand this Month

In the past month at TrinityP3 we have:
• Benchmarked media remuneration for an FMCG client
• Assessed a multimedia campaign for a Government client
• Assessed TV campaign costs for a global Beverages client
• Managed the agency tender for an Insurance client
• Benchmarked media buying for a Financial Services client
• Benchmarked the agency rate card for a global FMCG client
• Negotiated the Agency Contract for an FMCG client
• Reviewed the media rate card and remuneration for an FMCG client
• Managed the online Evalu8ing survey for an Automotive Services client

If you would like assistance or advice on any aspect of your marketing spend, contact us today for a confidential discussion.