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On Tuesday December 4, 2017 Michael Farmer, author of the award winning marketing business book Madison Avenue Manslaughter presented his Plan B for the industry to turn the manslaughter into a make over that would get brands and agencies moving again. This is the presentation where he defines why the industry needs a Plan B and what that Plan B should look like to deliver a Madison Avenue Makeover.
The video of his lecture can be found here https://www.youtube.com/edit?o=U&video_id=zNhCKd3V-MA
The transcript of his speech can be found here https://www.trinityp3.com/2018/02/plan-b-turning-madison-avenue-manslaughter-into-makeover-part-1/
10. marketing management consultants
Plan A has self-destructed
• Money and growth … dried up
• AOR relationships … disappeared
• Respect for agencies … a thing of the past
• Commodity pricing … worse every year
• Reviews … at the drop of a hat
• In-house agencies … a real threat
• Depressed salaries … invisible bonuses
• Client cutbacks … less faith in marketing
18. marketing management consultants
Office diagnosis – with workloads
Client Name
Fees Deliverables SMUs
Price (Fee per
SMU)
Creative
FTEs
SMUs per
Creative
Alpha $1,423,811 444 40.9 $34,837 2.3 17.8
Bravo $1,640,593 425 38.0 $43,219 7.2 5.3
Charlie $842,052 61 12.5 $67,611 2.0 6.4
Delta $500,204 73 4.0 $124,160 0.7 5.5
Echo $3,737,841 33 20.2 $185,459 4.7 4.3
Foxtrot $67,345 4 0.3 $194,966 0.0 8.2
Golf $1,988,342 26 7.4 $269,574 2.4 3.1
Hotel $7,464,519 158 26.8 $278,808 8.2 3.3
India $1,780,009 17 6.0 $297,627 1.8 3.4
Juliet $3,558,578 15 8.7 $407,764 4.2 2.1
Total $23,003,295 1,256 164.7 $139,693 33.4 4.9
Icarus ScopeMetrics® for Top Ten Clients -- 2015 SOWs
SMU’s = ScopeMetric® Units
19. marketing management consultants
Resource Allocation
FTEs per
SMU
Price per SMU (by client)
Office or industry average,
Resource & Price
High Price,
High Resource
Clients
(Overperformers)
Low High
High
Low Price,
Low Resource
Clients
(Underperformers)
20. marketing management consultants
Creative Productivity
SMUs per
Creative
Per year
Price per SMU (by client)
Office or industry
average, Creative
Productivity & Price
Low High
High
High Price,
Low
Productivity
Clients
Low Price,
Stretched
Productivity
Clients
23. marketing management consultants
Similar Competitors but different performance
The typical Saatchi & Saatchi
Account Executive salary is $52,943.
The typical Bain & Company
Associate Consultant salary is $77,172
Data source: Glassdoor.com 1/2017
25. marketing management consultants
Hourly billing rates
The typical Saatchi & Saatchi NY
Account Executive: $66/hour
The typical Bain & Company NY
Associate Consultant: $214/hour
29. marketing management consultants
Decide: What’s wrong with Plan A
• Agencies have not exercised control over pricing
• Pricing is in decline because workloads have been ignored
• With declining prices, agencies have downsized
• With downsizing, agencies have eroded their capabilities
• With eroded capabilities, agencies have failed to solve
complex client brand problems
The fundamental problem to be solved is the
pricing problem
31. marketing management consultants
Strategic mission (Agencies on behalf of clients)
1. Mission. Identify, quantify and realize brands’ full
performance potential
2. Relationship Requirement. Negotiate a Top level
Strategic Partnership -- an agreed LT program to
achieve brands’ full potential
3. Skills Requirement. Consulting-like business analytical
skills, leading to new brand strategies. Then….Scope of
Work development to achieve the strategies
33. marketing management consultants
SOW challenge
1. Required Role. The Agency must design and negotiate
recommended SOWs
2. Remuneration. Agencies must negotiate fees based on SOW
workloads
3. Agency Policy. “Every client in every agency office must have its
SOWs documented and measured in a uniform agency way.”
4. ScopeMetrics®. Use our SOW measurement system – the only one
in the industry to quantify SOW workloads for fee-setting purposes
(Google “ScopeMetrics®”)
35. marketing management consultants
Accountability challenge
1. Requirement. Account Heads must be held accountable for results
-- for fees, workloads, resources
2. Overview. Agency top management must measure, review and
manage Account Head performance.
3. Requirements. Use ScopeMetrics®, and the use of ScopeMetric®
Units (SMUs) to measure workloads
4. Action Plans. Account Heads must develop “corrective action plans”
for clients who underpay relative to SOW workloads
36. marketing management consultants
In Summary
1. Reposition the agency to analyze and fix client brand problems
2. Create a culture of measurement and accountability
3. Implement ScopeMetrics® to measure workloads and performance
4. Track, measure and negotiate remuneration based on SOWs
5. Hold Account Heads accountable for fees, workloads and
resources
6. Review and measure Account Head performance
7. Fix underperforming clients
8. Achieve premium pricing (Price per SMU) based on
positive results
38. marketing management consultants
For more information on Plan B contact
TrinityP3
New York
+ 1 (646) 666-7142
Sydney
+61 (2) 9964 9900
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+65 6631 2861
London
+44 (203) 790 9229
people@trinityp3.com
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