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Posts Tagged ‘agency wages’

With the news last week that P & G (Proctor and Gamble) was looking at its media buying and subsequent agency spending, it reminds me of the shifting sands that people in advertising work upon.

This statement can send a chain reaction down the hierarchy of any business quicker than high speed internet…in fact – it is most likely through the emails and digital files that most people will get this information. Spreadsheets are flying, you can bet on it.  Makes me shudder just to think of the poor sap at the end of that chain, the person who is performing the media buy as instructed by the layers upon layers of middle management.  That hard worker bee will most likely be the first one to go if the account drops its spending or leaves altogether.

The exact wording from Ad Age was: “The move to review comes as the packaged-goods giant aims to cut $500 million in agency fees and reduce the number of agencies it works with, according to comments from P&G Chief Financial Officer Jon Moeller on the company’s recent earnings call. Though P&G doesn’t disclose its total spending on agency fees, executives close to the company have estimated them at around $1 billion.”

I worked closely with some people who bought and sold ads for P & G…they are not extravagant media spenders, truly they were downright penny pinchers.  Looking at that revenue they are cutting just shows me the bottom line margin is shrinking and they – like most big business – are looking at ways to keep the top echelon earning their ridiculous bonuses while afore mentioned media buyer makes 35K and is lucky to leave work at 1pm on Fridays during the summer.  Just for the record, Bloomberg reports that Jon Moeller (the guys looking for the cuts) made $7,017,862 in total compensation. Of this total $850,000 was received as a salary, $897,600 was received as a bonus, $1,295,683 was received in stock options, $3,908,749 was awarded as stock and $65,830 came from other types of compensation.  7 MILLION dollars…really? That’s not a salary, that is the GNP for some small country, and he is only the CFO.

This revenue is shrinking because of the internet, the same exact way poor media buyer found out it was REVIEW time and cancel your summer vacation because Jon Moelller is ready to lose his bonus. Broadcast and other mediums are gasping for air trying to compete with free content and relatively low costs on social media.  The moral of the story here is that nothing, but nothing is worth any more that someone is willing to pay for it…and with all of the ridiculous TV programming and sensationalistic radio (yes, Rush – I am talking to YOU), this is why things like the net neutrality (internet equality) are important.  Internet CONTENT and drop down ads are just the tip of the iceberg…think back to dial up…THAT is how slow your favorite small site will take to load if they draw lanes in the digital highway.  Before the media can figure out a way to gouge you for surfing, pay attention.  Your vacation depends on it.

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“I can juggle but I can’t spin plates”, This is a saying I use OFTEN…particularly with clients in mind.  Most of my recent posts have been on expectations, something that is extraordinarily difficult to manage when it comes to clients.  This point is even harder in the environment in which we are working and living, more and more people want more than they can afford.

Recently I had a large project that required many different components, something that would require a whole team of people.  In discussions with this group, that fact was brought up on several different occasions in order to clarify and manage expectations.  With the client being reluctant to negotiate a higher fee, it became even more paramount that we discuss a couple of the components that would take a back seat to some that were a higher priority, like location (?!), people involved, itinerary and a whole list of “to do’s”.  Everyone was on board, nodding their heads and moving forward with our partnership.  This was particularly important because the person who brought me in was a friend in a pinch, someone I did not want to let down, so ignoring my red flags, I proceeded to sign and move forward.

The project came and went with a few minor snags which were not within my scope – ex. pertinent information withheld by one individual who was a part of the board, and a very low level of participation by the very board that hired me to do the job.  Unfortunately that became the benchmark for the event, ignoring the success of the project in the top three areas of discussion.  While my main client was happy with the results, in the wrap up meeting some of these low priority projects were focused on as an area where I had “failed”.  While I had hit the mark on so many other facets, this one fact was the one that was highlighted in the meeting.  I never like to leave a project that I left everything on the field for, but the moral of the story in this situation is an unfortunate reality: I should have never agreed to the project, because I can juggle but I can’t spin plates”.Spinning-Plates

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Can you feel it?  That rumble coming up from the ground?  It is the sound of creativity making its way into the hearts of people in the Motor City.  I am especially happy to living in Detroit right now because of it.

Sure, Detroit has haters…a LOT of them.  For some reason it is important to use Detroit as the benchmark for all that is wrong with the U.S.A.  We were too married to industry causing lack of public transportation, we had diversity until the riots of the 60′s sent a lot of people to the suburbs.  We are not what the media would have you believe however.

Detroit is quickly becoming the nerve central for all things creative.  Creative technology, creative thinking, creative funding, creative living.  We are sick and tired of you feeling like you haveIMGP0113 something on us.  I lived in Chicago for awhile.  When I moved back I felt like had to sell this city back to the people who lived here, they were believing the hype.  No longer.

For the record; Chicago has a 10.25 sales tax, think Kwame and Coleman were corrupt?  They actually auctioned off city jobs under Daly.   No offense to the Detroit Bad ass gangs – but Chicago gangs make ours look like West Side Story.

At the front end of all is this is artists.  Detroit and the state of Michigan over indexes the rest of the country in creative jobs.  Look, you will see it — Artists buying homes in Hamtramck, Artists living in New Center.  People like Dan Gilbert and others investing in a city that has all the same markings as any world class city and then some.  We have a riverfront, we have history, we have talent and we are running with it.  Do yourself a favor and look to Motown for your creative needs, we are ready for our close up.

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Below is a terrific article from someone who I truly believe has the audience to speak out about something I have said for years and years.  Being that my blog at best gets a dozen readers (thank you), and his blog is on Advertising Age, he is able to get to the masses some very important information.  I am not diminishing the magnitude of good creative, I am also not saying that it is simple and quick.  What I am saying is that it isn’t rocket science and a media idea in the works shouldn’t celebrate birthdays.  I had the good fortune to speak to a couple of high school classes recently about advertising. The question asked of me repeatedly was, what is the biggest misconception about advertising and marketing?  My response – that it has to be expensive – it really doesn’t.  I also spoke to a client today about a project estimate we were desperately trying to keep in check.  We had made a low estimate and were asked to lower it even more.  I know what my team is capable of and based on our outline and the clients willingness to participate actively in the design, we were able to reach an agreement we were both comfortable with.  That was until, the simple task of designing stationary took on a life of its own involving a new design and colors.  I was committed to our original agreement and did not intend on going over, but needed to send up a small flare as a heads up.  The action was immediate and swift, the client was convinced I was trying to bail.  Never, not me, and not my team…we discussed the hourly pay scale that neither one of us liked or felt was relevent anymore.  However, a lot of creatives still employ the system and since I am not an employer of these folks, I had to submit in an hourly fashion.  We were able to have the obligatory “come to Jesus” meeting and left with smiles on our faces.  As much as we don’t like the hourly rate system, it is industry standard, and my feeling is as project managers, consultant and employers it is up to us to manage it and make sure it doesn’t spiral out of control either by indecision or time waste.  Below is the article by Scott Montgomery, enjoy.

 

Great Ideas Don’t Take As Much Time As Many Ad Agencies Claim
The Myth of Time and the Creative Process
By: Scott Montgomery Published: November 16, 2011
CMOs? Ad managers? Perhaps you’ve suspected this. I can confirm it: Making ideas really doesn’t take as long as you’re told it does.
There. I said it.
It’s like I’m burning my Advertising Creative Union card by saying this, right? I mean, creative actually does take time — and smarts, risk, effort, sleep deprivation, and extended bouts of weeping — just not as long as some agencies make it take.
A few months ago I listened in on a conference call with one of our newly minted account managers as she negotiated campaign timing with a new client. Actually she wasn’t really newly-minted. She’d worked for a few years at a creatively decent, but now deceased, agency. And every word she used, every number she referenced, each timeline, was designed to secure more time for campaign delivery.
So, I popped down afterwards to undo several years of very good, traditional account training.
Agencies (like her old one) have built up elaborate time, tracking and billing structures that David Ogilvy would still recognize — structures designed before Internet speed, and turned into tradition with layers of process that . . . Slow. Things. Way. Down.

At the same time, creative people, even admirably busy ones, almost always put most of their actual work-work nearer to Deadline Eve than to project initiation. I do it. Think. Get coffee. Think. Get panicky. Freak. Execute. That, too, is tradition.
So, if we all just agree that, today, technology lets us collaborate, create and execute far faster than those 80s-era agency structures can — the ones where 90% of the creative portion of the effort happens in the last 72, 48, 12 or 4 hours anyway — well, let’s just go ahead and move that hunk of time closer to project’s initiation.
Like, all the way closer.
Here in flyover land — essentially advertising’s nowhere — speed is a requirement. We have to be faster to compete with bigger agencies. But it turns out the positive effects of this reality have piled up for us. So we’ve made it the rule. Or rather, the basis of our guiding principles, which we use to go about undoing all that excellent account training I mentioned.

Principle 1: The less time it’s in our shop, the more profitable the effort. Seems strange to say in an industry with billable hours as a standard. But we’ve had projects that have celebrated birthdays. Not one of them has been profitable. Bill to a quote, deliver value, execute, delight your client. Repeat.

Principle 2: Speed reduces mootness. If we develop concepts before market conditions render the brief moot, it decreases the chances that the effort will die of irrelevance in six months because a client’s competitor moved faster. Yet, some agencies act like clients’ competitors never change. They do.

Principle 3: Speed helps your client-side partner be indispensable to her organization. Speed tends to delight her project team; executional alacrity helps that lead person keep (and excel in) her job, be assigned more things to execute, and (hell yes), make more work for us. Yet, culturally, agencies are full of creatives who think the client is the enemy. They’re not.

Principle 4: Speed lets you avoid second-guessing a thing to oblivion. Almost all our most interesting projects could have been easily killed by a lot of debate. Creative inventions are always fragile, and proper scrutiny should kill the weakest — absolutely. But you can always construct an argument that can kill even the most awesome ideas. Speed just reduces that opportunity. And yet, some agency creatives talk about working for months on things that are never produced. Somebody pays for that wasted effort.

Principle 5: Executing the fresh beats the hell out of executing the stale. I personally have the attention span of an Irish Setter. I’m easily bored, and always ready for the next thing — a lot of creative people are. Execute before our minds wander. Executing ideas in the energy-glow of spontaneity, newness, and invention is, frankly, more fun. You can usually see it in the results. What was I saying? Oh…

Principle 6: Speed lets you collaborate with your client earlier. Speed makes you be decisive. Speed lets you be well on your way before another agency can get the job opened.

This may seem anti-creative to some. But I can report that nearly every really unusual, innovative or award-winning idea we’ve created over the last few years has coalesced within hours of setting our minds to it. The speed can be breathtaking, but the results can be, too.

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