Aquent/AMA Webcast: How To Do More With Less: Exploring Decoupling Strategy and Execution for Marketing Projects

Editor's Notes

• #4: In addition to AMA webcasts - Did you know that AMA also offers virtual events?   Coming up on May 24, we invite you to attend The Evolution of Email: Essentials for Campaign Success   During this comprehensive event you’ll have the opportunity to learn from email marketing experts, who will present on the latest topics, including: deliverability, design, list growth and new technologies. Registration is free and AMA members will receive exclusive access to conference speakers and give-a-ways! Visit marketingpower.com/emailvx for more information and to register!
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• #7: Tom Reynolds is a Vice President, Enterprise Solutions with Aquent Studios, a leading provider of tactical brand execution solutions for Fortune 1000 companies. In his 10 years with Aquent, Tom has worked with over 80 clients to create the most efficient and cost effective models to execute their marketing initiatives. Clients such as Merck, Staples, AstraZeneca, Gillette and Rockwell Automation have engaged with Tom and his team. Tom is directly involved in day-to-day operations of the Studios organization. He provides executive oversight on all major accounts, ensuring that clients receive the right resources at the right time. His subject matter expertise and tenure with Aquent Studios give him a unique perspective on today’s topic. Prior to joining Aquent, Tom was providing a variety of outsourced solutions to clients like Microsoft, AT&T, Sprint and Ford Motor Credit.
• #8: Thank you all for joining today! As Alli said, I’m Tom Reynolds, Vice President of Enterprise Solution for Aquent. I work with Aquent’s largest clients to help identify the most efficient and cost effective ways for them to execute their marketing initiatives. As you all are keenly aware the last few years have been difficult when it comes to marketing budgets. As I meet with clients I hear a common theme, we are being asked to do more with less. The need to maximize budgets is more crucial than ever. Today, I hope we can show you one way clients are maximizing budgets and seeing significant results. It’s called decoupling you may also hear it referred to as unbundling.
• #9: Survey: Was your marketing budget in 2012 flat, increased or decreased? According the the CMO survey conducted last year budgets are being increased by 8.1% in 2012 (which by the way, is below 2011’s increase of 9.2%). So there is an increase in budget but the same report shows that there will be a 39% decrease in hiring of marketers. What does that mean: more work, with less people!
• #10: Survey: Was your marketing budget in 2012 flat, increased or decreased? According the the CMO survey conducted last year budgets are being increased by 8.1% in 2012 (which by the way, is below 2011’s increase of 9.2%). So there is an increase in budget but the same report shows that there will be a 39% decrease in hiring of marketers. What does that mean: more work, with less people!
• #11: Over the past few years there have a been a variety of ways marketers have looked to reduce their budgets. Some have been successful, others not so much, and others still we are waiting to see. Clearly, one of those strategies is to look at agency consolidation. As clients look at gaining economies of scale by reducing the number of agencies that support them. More and more companies are reducing the agency roster list in hopes that more business for fewer agencies will drive costs down. GM believes that through agency consolidation they can save over $2 billion, yes that is with a B, over the next 2 years! We won’t know the results for a couple of years but that is still significant opportunity. Even if they only receive 50% of their expectations it would be a great result.
• #12: One of the other ways clients have identified as a way to reduce marketing spend is a pay for performance model with their agencies. A couple of years ago, Coca Cola was a driving force behind pay-for-performance models. If you could only pay your agency when your could measure the actual results clearly there would be savings. However, this model has not gained much momentum. In addition, it would only apply to the most strategic initiatives executed by a client and not to the bulk of the work which is more execution related.
• #13: Much is being said about the demise of broadcast advertising and according to an ANA and Forrester survey the numbers seem to confirm that although there was a jump from 2011 to projected 2012 spend. Dropping the budget allocations in TV can significantly impact the overall marketing budget. From 2008 until 2010 TV budget dropped 42% from 58% of overall budget to 41%. However, in the last year the TV budget increased to 47% but it still 23% below 2008 levels.
• #14: One of the trends that seems to be gaining momentum is the idea of decoupling or unbundling. At an ANA event last year there were 3 presentations on this topic. It is proving significant results. So what is decoupling? Actually let’s start with what it is not. Decoupling has been discussed for a number of years. However, initially it was discussed in terms of handing off projects between resources so that one team focused on the strategic tasks and another company took the project over and executed the tactical activities of that project. There are some fundamental flaws with that model. The amount of communication and project management to get the project completed was significant and it drove cycle times up for completing the projects. It can also lead to a lot of finger pointing on who was supposed to do what and when. So unfortunately there is often a strong push back on “decoupling” strategies. We hear we tried that and it did not work for us. However, if decoupling is done correctly, which is to identify strategic and tactic projects with the correct teams handling the execution of those projects (not the activities or tasks) from start to finish, there are substantial dollars to be saved. It is crucial to identify specific projects you will assign the execution of to one agency and another group of projects to another resource.
• #15: One of the trends that seems to be gaining momentum is the idea of decoupling or unbundling. At an ANA event last year there were 3 presentations on this topic. It is proving significant results. So what is decoupling? Actually let’s start with what it is not. Decoupling has been discussed for a number of years. However, initially it was discussed in terms of handing off projects between resources so that one team focused on the strategic tasks and another company took the project over and executed the tactical activities of that project. There are some fundamental flaws with that model. The amount of communication and project management to get the project completed was significant and it drove cycle times up for completing the projects. It can also lead to a lot of finger pointing on who was supposed to do what and when. So unfortunately there is often a strong push back on “decoupling” strategies. We hear we tried that and it did not work for us. However, if decoupling is done correctly, which is to identify strategic and tactic projects with the correct teams handling the execution of those projects (not the activities or tasks) from start to finish, there are substantial dollars to be saved. It is crucial to identify specific projects you will assign the execution of to one agency and another group of projects to another resource. Survey: Have you tried a decoupling strategy in the past or currently have one?
• #16: Drawing the line between strategic marketing and tactical is not easy. We do not recommend taking a look at your deliverables and randomly assigning them based on one persons opinion, You need a well articulated methodology for segmenting strategic and tactical initiatives – one that both marketers and creatives understand and can agree on We recommend a tiering strategy that is based on two axis’. One is the strategic importance of the project and the second is the creative complexity of the work. Once you identify specific criteria for evaluating strategic importance and creative complexity – the process of tiering initiatives and deliverables becomes easy and even intuitive. Based on those effort s we generally assign 5 tiers to the work as noted here. Tier 0 being the most strategic and tier 4 the least with varying degrees between.
• #17: When we establish tiering strategies for our clients we want to have a strategy that will get them to the best decoupling . Each organization has a unique criteria for what is strategically important to them and trust me you will likely have some spirited discussion among the team on this one! Complexity of work is a little less unique but based on industry and deliverable types there can be some minor variance.
• #18: , here is a sample high level tiering structure we did for a client. In this case we looked at the complexity of the work based on the number of stakeholders that were involved in the process and also whether there was original design required, if there was existing design to work from or whether it was straight revisions or adaptation to existing design. The strategic importance for this client, and this varies by client, was based on revenue impact So with this client as you can see in the top right hand corner, NASCAR Sponsorship Program is high in strategic importance and the complexity is high based on revenue impact and the fact that would require original design. However, internal posters on the lower left hand side, are often template driven and utilize existing assets so therefore are low on complexity and lower on strategic importance. People often look at this tiering strategy and say “great this will allow us to prioritize work. It does not. What it does do is ensure you have the right resources aligned the the right projects., once that happens there becomes less of a prioritization effort because there is less juggling between highly complex work and lower level tactics. Each has the right resources on it.
• #19: So the previous example showed how one client defined strategic importance and complexity but there are many criteria based on your industry and the size of your organization. Under strategic importance here are a few that we have seen most often: Size of audience: how many people are going to see this, what is our total exposure if we do this direct marketing piece how many will it reach an email campaign, how many people a web site, how many unique visitors Influence: Is this designed for a new customer or an existing customer Different values are assigned to each of these audiences Duration: What is the likely “shelf-life” for this project. is this a single day promotion or a mobile application for customers Newness: Exploring new channels, markets or audiences Are you looking at new channels tablet, mobile, social
• #20: From a complexity perspective it most likely involves: Production complexity, not only the physical specs but the number of pieces that may need to be completed as part of the initiative How many and who are the key stakeholders Content complexity: Images, legal content Newness-on brand or under existing templates or not We recommend you get a team from marketing, from creative and from procurement to create your own strategy. The marketing people can offer insight into the strategic importance of an initiative, creative can offer insight into the complexity and procurement can help establish the metrics that can help you track your progress and the savings you can realize. Please understand, this is not an easy endeavor and, depending on the size of the organization can take 3-12 months. It seems very straightforward and as you are doing it the Tier0/1 and tier 4’s are relatively easy to identify. But when you get to a tier 2 versus one or 3 versus two, there are some very fine lines. In addition, when you go through this exercise, realize that the strategy is going to apply to 80% of the initiatives. You are still going to have those 20% that are flyers and do n ’ t easily fall into the model.
• #21: Once you have completed the tiering process you can assign projects to the right resources. The decoupling line will vary from organization to organization and we have seen several models that are successful. Tier 0 is almost always done by the strategic agency. Although there are some companies that do everything internally although they are very rare. Tier 1 can be done by the strategic agency or in some cases clients will establish an internal agency to execute these initiatives Tier 2 starts to cross over into being done again by an internal agency or brand execution agency but in most cases does not have to be done by the strategic agency Tier3&4 should not be done by the strategic agency and most likely handled by the brand execution agency
• #22: A large pharmaceutical client was facing significant budget pressures and realizing that their agencies were expensive. Brand compliance was challenging. Cycle time for smaller projects was drawn out and they realized they were giving tactical execution related work to expensive resources. The decided to tier their work and bid the work according to the tier.. Approximately 39% of the work was tier 3 and 4.
• #23: The clients goal in the decoupling process was to realize a 60% savings on the tier 3 and tier 4 work. They wanted to get the right resources aligned to the right projects, have the agencies do what they do best in focusing on the strategic projects and the the execution work done by a brand execution agency. By utilizing a brand execution agency they knew the focus would not be on the big idea or the blue sky design but the tactical execution detail that would lead to shorter cycle times.
• #24: Aquent Studios was selected to be the Tier 3 and 4 brand execution agency. We were able to reduce the costs for this work by over 60% target established by the client. Our focus on executional detail allows us to do the work faster and generate significant savings. Last quarter our average cycle time from receiving the files to 1 st review to the client was 1.8 days. This client was able to save in excess of $20,000,000 in 2011 by leveraging a detailed and aggressive decoupling strategy. The client continues to work with strategic agencies and they create outstanding campaigns for the client but those are not the resources that are required to do versioning, edits, small creative changes and template driven work.
• #25: Clients like Merck, Rockwell Automation, Pepperidge Farm, Booz Allen Hamilton, Gillette and AstraZenedca have all leveraged a decoupling model in order to reduce costs and be more efficient in the delivery of their tier 3 and 4 tactics.
• #26: We are all being asked to do more with less, new channels, new audiences, new products We have to find ways to be smarter about the use of our marketing budgets Decoupling is a smart strategy Have to have a defined strategy Tieirng is an effective way to decouple Evaluate your initiatives based on strategic importance and creative complexity Once you have done that, identify the decoupling line and which resources will align with which tier of work Strongly consider utilizing a brand execution agency for a minimum of your tier 3 and 4 tactics
• #27: We are all being asked to do more with less, new channels, new audiences, new products We have to find ways to be smarter about the use of our marketing budgets Decoupling is a smart strategy Have to have a defined strategy Tieirng is an effective way to decouple Evaluate your initiatives based on strategic importance and creative complexity Once you have done that, identify the decoupling line and which resources will align with which tier of work Strongly consider utilizing a brand execution agency for a minimum of your tier 3 and 4 tactics