Advertising Compensation and Benchmarking, Contract Compliance and Risk Assessments are vital services for large corporations with tens of millions, if not billions of dollars of marketing spend. Advertising Audit International (AAI) provides exactly these services to a broad range of Fortune 500 brands. Adding BriefLogic’s new “agency input audit” to the mix gives corporations a first-ever 360 degree view of their agency engagements.

In the complex and often confusing world of client-agency transactions, AAI’s standard review techniques are cost-effective methods to ensure the accurate and timely review of advertising costs and expenses. While most financial review firms, auditors and CPA firms typically use sampling techniques, AAI examines each individual invoice and its related line item costs for accuracy and contract compliance.

However, as AAI CEO Michael Lay states, “all of the costs we help recover for our clients, and it is a staggering figure, may be just the tip of the iceberg as we go to market with our new BriefLogic partnership.”

According to some industry analysts, total communications spend worldwide, across all marketing disciplines will exceed one trillion dollars in 2010. Currently, the corporate side of the industry is focused on the outcomes of that spend. Marketers are constantly interrogating the output of their agencies, their creative ideas, or the “stuff that sells.” According to co-founder and CEO, Casey Jones, BriefLogic has proved conclusively that someone has to think more deeply about the quality of the direction that sets these billions of dollars in motion. In a recent survey conducted by Greenberg Brand Strategies, it was determined that 30 percent of all agency time and energy is wasted or made inefficient due to poor input from marketing and brand managers.

Where AAI has experience in making sure that every single dollar that a marketer’s agency spends is accounted for, BriefLogic makes sure that it is directed properly at the front end of the process. AAI provides comprehensive audits of agency spend after-the-fact, and BriefLogic provides briefing tools, audit services, and agency input training to give marketers and agencies confidence that waste and inefficiency don’t occur on the input end.

The following post is in response to the AdAge article titled, “Planning Your Next Move in Ad Land: The Challenges and Pitfalls Ahead for the Industry 2010.”

The most successful agencies in the next decade will not be averse to procurement executives. They will neither think “dreaded procurement,” nor dread the questions posed by procurement. They are, at their essence, questions about value and differentiation. Is the agency service valuable? Is it different from the shop next door? If the answers are yes, there is little to dread. If no, then they have only themselves to blame.

Procurement is getting smarter the more they get involved. At the moment, many of their executives don’t understand our industry. That is changing rapidly. Even if they dial down the pressure (which is not likely) the rules governing agency revenues and profits will never change.

Create business value, in a way that is different from your competition. If you do, the field is yours . . .

http://www.jonesandbonevac.com/media.php

The following comments are in response to the AdAge Article titled, “Fed Up Shops Pitch a Fit at Procurement”

Procurement departments vary, and talent within those departments varies,
just like it does with clients and agency staff in general. Some procurement
execs we’ve worked with truly understand that people are not parts. You pay
less for parts, you get the same parts. You pay less for people, and you get
fewer of them, or less of their time, or less creative and experienced ones.

The single most challenging issue on the table is that neither procurement,
nor most clients, nor most agency pitch teams can deal well with the issue
of causality. Many things outside of an agency’s control impact market
success, making it nearly impossible to isolate the value of their
contribution from the rest of the players on the field.

The ROI on agency cost is impacted drastically by:

1. Product quality: It’s easier to sell superior product, tougher to sell a
commodity product, and damn difficult to drive up ROI for a brand that is
struggling. Procurement must make sure where the brand or product stands
relative to demands on agency performance.

2. Competitive and environmental changes: Will procurement track competitive
pressure, or changes in the marketplace? Will the company cut agencies slack
if, for instance, a major competitor comes out with a breakthrough product
that gets massive press and run-away sales? What happens if the the national
economy takes off and all boats are rising? Should the agency be compensated
for being lucky enough to be on board when the entire sector is growing in
the double digits?

Lastly, and this is the tough one for procurement departments and client
leaders: GIGO. Garbage In = Garbage Out. How solid is the client-side of the
relationship? How high is turnover there? How experienced are the clients
managing the work? How consistent is their direction? These are the areas
that Agencies can legitimately push back on. Agencies can be stubborn and
“not cave.” It might be much more productive to ask for client-side
assurances that they will do their part well. If they commit, perhaps
agencies CAN do it for less, and without complaint.

We are client-input analysts, and we see vast difference in the quality of
RFPs and briefs agencies receive. As one of our clients remarked recently,
“Agencies lose money on badly briefed projects and make money on
well-briefed projects. It is in everyone’s interest for us (clients) to take
responsibility for improving our input.” If you’ve got that kind of client,
you can have more faith in your ability to meet procurement’s demands.

The answer for procurement is NOT to expect that agencies can be fully
accountable for outcomes in a vacuum. The FIRST place to look for efficiency
is on the input side. You can expect more from your agency; more success,
more accountability, more creativity, more support, better service. You can
expect the work to be more effective, but not if you focus only on the
agency-side of the equation.

Negotiate hard, but only when you know you have your act together.