Transparency, Compensation and New Agency Models: 2017 ANA Advertising Financial Management Conference
Last week, several thousand marketing/advertising professionals gathered in San Diego for the annual ANA Financial Management conference. There was a healthy mix of clients, agencies and vendors (marketing automation software, production consultants and more). Many of our clients were present, including Verizon, Mastercard, L’Oreal, Coca Cola, and Chick-fil-A. Worldgroup & IPG had representatives from McCann, Craft, MRM, Martin Agency, Huge, RGA and more.
While this may not seem like the most exciting conference in the ad world, there were actually some very meaty topics that will most certainly affect how we work with our clients and/or how we are compensated in the short- and long-term.
Production transparency was the biggest topic of this year’s conference with at least 3 or 4 sessions dedicated to this discussion. According to Danielle Korn, McCann’s EVP, Business Affairs lead, “Many sessions were focused on alternate forms of working on production including in-house agencies (Intel), having the clients do all the bidding and negotiating (Fiat/Chrysler), and direct sourcing of production (Coke).”
She continued: “There were continued concerns around agencies not disclosing joint ventures [related to U.S. Department of Justice announcement in December to investigate possible bid-rigging and other practices within the commercial production sector], and the ANA is recommending to its members that advertisers involve third parties to review production bids when an agency in-house facility is also being bid.”
Here are some of the other larger topics discussed:
· Compensation Models – ANA has released a new white paper around trends in compensation models
· New Agency Models – In-house agencies, emerging holding company models, co-owned agencies, etc.
· Media Transparency – Bot fraud and blocking continues to be a concern, but much less than previous year
It was also refreshing to hear more discussion on the importance of creative. While many debate the various methods of how to apply value to creative, the consensus was that creativity drives good partnerships, and is not a result of procurement negotiations.
When asked for comment, McCann CFO Eu-Gene Sung said, “In-house agencies may be the new decoupling.” For more information on what that means, or a lesson on compounding interest, reach out to Eu-Gene, as she has lots of free time.
Overall, the conference was a great opportunity to meet with our clients and network with colleagues in the agency world that are having similar conversations. It is critical for McCann to be a part of the conversation and to understand our clients’ concerns and pressures around procurement.