The Future of Digital Agency Compensation

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Presentation to iMedia Conference, Phuket , Oct 2009

Transcript of The Future of Digital Agency Compensation

The Future&

Getting Paid for it

R3

Who are we?• Asian based global consultancy • Helps marketers and agencies be more efficient and

effective• A ‘coach’ , not a ‘policeman’

• Equally hated and loved

Why are we here?

• Our clients have no clue about Digital

• Even the ones you think have a clue – don’t really have a clue

• We don’t want to be equally clueless

Today1. What Clients Want

2. The Future of Them Paying You

3. Secret Tips to Master Them (and R3..)

5

What Clients Want

1. What

Clients Want

8

Ask them!

The biggest relationship issue

R3 REGIONAL STAKEHOLDER RESEARCH170 Interviews

Face to Face One Hour

38% of advertisers cite creativity as the most positive aspect of the digital agencies currently engaged

Part

O

ne

Base: 102 clients

IDEAS MATTER

HOW TO MEASURE?44% of advertisers cite lack of ROI as the biggest

barrier to increasing budget for digital marketing

Part

O

ne

Base: 102 clients

60% of advertisers believe their own marketing teams’ understanding of digital is not strong enough

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ne

Base: 102 clients

33%

60%

7%

S trong enoug h

Not s trong enoug h

Don't know/ NA

SKILLS

84% of advertisers would welcome more training from their agencies on new media/ new digital platforms

Part

O

ne

Base: 102 clients

9%

7%84%

Agree

Dis agreeDon't know/NA

EDUCATION

Only 23% of advertisers believe the current market instability has made them cautious about trying new media and digital formats

Part

O

ne

Base: 102 clients

23%

69%

8%

C autious

Not cautiousDon't know/NA

TIME IS RIGHT

WHY ?

61% of advertisers themselves are using more than 2 forms of social media frequently (eg Facebook, Twitter)

Part

O

ne

Base: 102 clients

61%

31%

8%

Us e

Don't us eDon't know/NA

SELF USE

WHO IS LEADING DIGITAL?

% of advertisers

Base: 220 China, 214 India

China

India

The Concubine Category…adidas

- 21 Communications (CN) – One Xeno (CN/HK) – Isobar: wwwWins (CN), AgencyW (KR), OneDigital

(AU), Digithais (TH) Sony

– i2K (SG)– Nokomai (SG)– Qais (SG)– Euro RSCG (AU) – The Upper Storey (SG) – Bascule (JP)

Coca Cola– 21 Communications (CN)– Arachnid (MY)– The White Agency (AU)– Euro RSCG (SG) – Clear Blue Day (AU) – Profero (CN)– Isobar: wwwWins, Digithais, Carat Interactive,

AgenciaClick, Carat Fusion, Molecular, Marvelous McDonald’s

– Arc (CN, AU)– Tribal DDB

Motorola– 21 Communications (CN) – digitalDigm (KR)

Nokia – XM Asia/RMG Connect (SG, CN)– Formul8 (SG)– The Upper Storey (SG)

OCBC (Robinson’s card)– Formul8 (SG)– Proximity (SG)– Isobar (SG)

P&G– XM Asia (AU)– Saatchi & Saatchi– Digital Digm (KR)– Nurun (CN) – Proximity (AP)– G2 (AP) – Publicis Modem (AP)

Radico Khaitan– Proximity (IN)– Euro RSCG (IN)– G2 (IN)

Toyota/Lexus– Saatchi & Saatchi (regionally)– Arachnid (MY)

Visa– XM Asia (SG)– Blue Interactive – Proximity

HP– 21 Communications (CN)– Blue Interactive – XM Asia (SG, CN) – Digital Digm (KR)– Euro RSCG (KR)

eBay– Blue Interactive (SG)– One Xeno (HK)

J&J– One Xeno (CN/HK)– 21 Communcations (CN)– Agenda/i2K (HK) – Proximity– Blue Interactive (CN), (Acuvue)– Euro RSCG (KR)

2. The

Future

If you’ve been listening for two days… the old model is broken

Even last year’s model looks old

Clients are making moves

Even….crowdsourcing….http://econsultancy.com/blog/4511-q-a-unilever-s-noam-buchalter-on-crowdsourcing-peperami-ads

19 million ways forward….

Sapient Wish List Study1. Greater knowledge of the digital space.

2. More use of “pull interactions.”

3. Leverage virtual communities.

4. Agency executives using the technology they are recommending.

5. Chief Digital Officers make agencies more appealing.

• 6. Web 2.0 and social media savvy.

• 7. Agencies that understand consumer behavior.

• 8. Demonstrate strategic thinking.

• 9. Branding and creative capabilities.

• 10. Ability to measure success.

Sapient Wish List Study

Top 8 Creative Agencies

• Source – Gunn Report

TBWA\Chiat\Day New York US Omnicom

Saatchi & Saatchi New York, Los Angeles US Publicis

DDB London UK Omnicom

Dentsu Tokyo Japan Dentsu

Fallon London UK Publicis

TBWA Paris France Omnicom

Ogilvy & Mather Singapore Singapore WPP

BBDO New York US Omnicom

Top 8 Digital Agencies

• Source – Gunn Report

Far Far Sweden Aegis

CP&B US Independent

Forsman & Bodenfors Sweden Independent

R/GA US Interpublic

Goodby Silverstein US Omnicom

FramFab Netherlands Independent

Glue London UK Aegis

Great Works Sweden TYO Group

The New Agency Model

A. Consultative

B. Collaborative

C. Creative

D. Cashed Up!

A. Consultative

• We don’t think that the toilet bowl has any unpleasant meaning. Human beings can live several days without food but toilet bowl even one day, other wise the world must turn into the mass. The deep culture of toilet bowl is a criterion of the civilization. Equanimity and imperturbability being able to stand pressure with enthusiasm are the toilet bowl’s characters.The combination of responsible, sacrificing and readiness is the spirit of toilet bowl. The toilet Bowl can release the pressure and make you comfortable.The beauty of toilet is willing to clean itself and fresh forever! So! for our client, unconditional offerings is Meikao’s spirit

• CEO only

• Flat fee

• Sales Incentive

B. Collaborati

ve

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Red Lounge

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Results

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40

Spontaneous Awareness Top 10 Brands

Q 7-1. Can you tell me what Olympic sponsors you know?(No prompted,Maximum:6)

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Promotion that leave strong impressions

Q 8-1. Please tell me which Olympic sponsor’s promotions have left a deep impression on you?

26.5%

7.3%

5.1% 4.9%3.5% 3.4% 2.7% 2.2% 2.2% 1.9%

0%

5%

10%

15%

20%

25%

30%

Coca-Cola China

Mobile

Yili Lenovo Mengniu Pepsi Li Ning Nike Adidas Bank of

China

C. Creative

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Snickers USA

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D. Cashed Up!

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Measure it. Move it. Make it

• Differentiate based on results. Not price

• New content relationships

• New media relationships

“Risk – Reward”Did he say “Reward – Reward”?

Who’s Doing it Well?

A ConfidentialR3

Case Study……

52

What Clients Want

3. Secret Tips to Master Them!

“80% of agencies have the same point of

difference”

“We are an integrated, full service digital

agency that believes in brand building solutions that are highly creative”

“Please meet our CEO and our Regional Strategist.

You will never ever see them again”

Market your brand as if it was your client

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58

Write a MARKETING brief

Remember….

ADVERTISE

What is YOUR Advertising to Sales

ratio?

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Write a PRESENTATION brief

Identify, Diagnose and Cure

the Business Pain

Be nice to (some of..) the consultants!