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Kathleen Jordan on Thursday, August 28, 2014 0
Centralized or Decentralized? Consolidated or Unconsolidated? If you ask any sourcing professional the best route in organizing their company’s supply base and achieving cost savings, the most common response to these two questions is centralize and consolidate…as much as possible. But if you ask the question: “Coupled or Decoupled?”, these terms may not be all too familiar to a sourcing professional, unless they oversee the marketing spend category.

Most of the time, centralizing your supply base and consolidating wherever possible delivers the most benefits for your organization in the form of cost reduction and easier supplier relationship management. However, this approach might not make sense for certain spend categories you find yourself managing and there may be other objectives you need to keep in mind. If you are responsible for overseeing the marketing spend category, you may be asked by your stakeholders to decouple an agency relationship or two or at least explore the option given some recent trends in the industry. Well, what does decoupling mean exactly? And why would this approach make sense?

Decoupling is when an advertiser chooses to separate the production of a creative concept or idea from the actual development of the idea (and strategy behind it). The term can also apply when you are referring to the separation of media buying from creative. Traditionally, agencies have been viewed as a one-stop shop for developing and executing marketing campaigns, meaning they are responsible for the development of ideas, bringing these ideas to life through production (e.g. print, broadcast, digital), and then sharing these ideas with the end consumer through media platforms. Some traditional agencies are now only being asked to come up with the core idea and then this deliverable is passed off to production agencies, bringing rise to production houses focused strictly on one thing – you guessed it, production; and since this is their one and only core competency, they are able to deliver faster turnarounds, lower costs, strong expertise and reliability.

There is an ongoing debate about decoupling and whether or not it is the right strategy to employ. Decoupling may not make sense for every advertiser, and in fact, many still argue that media and creative should not be separated, which is a very common practice these days. Others say that the strategy makes sense, but only for digital media and digital creative projects. The reality is, the optimal solution depends on a company’s overarching marketing strategy and internal resources. Typically, if there is a great deal of production work required for certain marketing tactics within your brand’s campaign, decoupling may be a good sourcing strategy to consider. If the scope of a project is small, a single agency may be able to deliver and deliver effectively on every core competency needed to run a comprehensive campaign from start to finish. The decision to decouple depends on the makeup of your current agency network and how well they support your brand. Sometimes it does not make sense to disrupt the current state if relationships are healthy and ROI is high.

The topic of decoupling deserves its own blog series, so this post is the first of a few. In this series, we will be discussing all things “decoupling”, covering the following:

  • Historical and recent trends as they relate to decoupling services, specifically media and production, answering the question: How did decoupling originate as a strategy?
  • The advantages and disadvantages that the decoupling of agency services can have on your brand; key considerations before getting underway with this type of sourcing strategy
  • Scenarios where decoupling makes the most sense and which categories fit the model well; we’ll also call out some key players to consider that have sparked this trend
In our next post, we’ll provide some additional context around decoupling and why it is a topic that is growing in popularity.
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on Tuesday, September 09, 2014 0
As the relationship between Procurement and Marketing groups continues to evolve, decoupling becomes a more frequent discussion point amongst the two parties. Sourcing professionals are typically tasked with identifying cost savings opportunities and Marketers are expected to always be aware of the latest trends in their field in order to stay ahead or keep up with competition. If executed properly, decoupling is a strategy that can help both groups meet their objectives. Last week, The Strategic Sourceror introduced the topic of decoupling in the first installment of this blog series, explaining why it's something worth talking about (and debating). Today's post will cover the history of decoupling in advertising and how it currently applies to an advertiser.

First, a quick overview of what was covered in the first post of this series: What is decoupling? Decoupling is when an advertiser chooses to separate the production (and/or media) components of a campaign from the creative or strategic portion. Rather than utilize one agency for all marketing activities from soup-to-nuts, advertisers may choose to decouple their production activities and engage with specialized shops and studios to develop these elements, which can range from standard print jobs to digital assets like software applications.

Decoupling has been around for longer than many may realize - originating over 20 years ago in Europe when advertisers began to take a closer look at their advertising budgets. Advertisers began to compare production costs across agencies to identify savings opportunities by segmenting out these services to a lower-cost alternative. Decoupling started with the movement of print production services from advertising agencies to specialized print shops. When print was a primary advertising tactic, printers who could produce high quality print work were sought after. Print production agencies are stand-alone agencies that emerged to fill this demand for high quality print services but at a lower cost than advertising agencies. While the advertising agency develops the creative concepts, the print production agency is completely dedicated to the production of these concepts. As broadcast media gained popularity as an advertising medium, media agencies were formed to execute broadcast media concepts. Media agencies gained their strength in the market because of the relationships media buyers were able to establish with media outlets, which could be leveraged to achieve savings for clients.

Now, one of the most popular services to decouple is digital work. The digital landscape is constantly changing as new technologies come to market and yesterday's technologies become outdated. With each new update or technological advancement, advertisers rely on their agency to react quickly and develop the skills and expertise needed to handle these new technologies and eventually incorporate them into a campaign. Your one-stop-shop advertising agency may not have the ability to dedicate resources to stay on top of the latest digital trends. Digital shops are often better positioned to adapt as they are leaner and more proactive. As a result, we have seen a shift in which advertisers are engaging their advertising agency to develop the overall strategy and concepts behind a digital campaign, and then move the actual production of the concept to a digital agency with the strongest technical expertise.

In general, decoupling is frequently born from the demand for technical expertise in a particular area of marketing which may not be cost-effective for larger advertising agencies to acquire. Today, the latest trends in decoupling are focused on digital services, which mainly include website and software application development and digital media. Many advertisers and sourcing professionals also debate about having digital media stand alone as a service offering considering its complexities. Depending on your target marketing and their presence in the digital space, it may be highly beneficial to have three agencies collaborate to execute a successful digital marketing campaign - one focused on creative and strategy, a second focused on development and build, and a third focused on media. To some, this may seem excessive, but to others, it may be necessary to ensure product/brand relevance and growth.

Regardless of the strategy employed by an advertiser in building their agency network, Procurement can serve as a decision support and help identify the agencies and production houses best suited to meet and advertiser's needs. Procurement is also known for its analytical mindset which can help marketers understand the cost benefit tied to decoupling.

Stay tuned for our next post where we'll discuss further the cost benefits of decoupling and other advantages it can deliver as a sourcing strategy. And we'll also explore the other side of the coin and call out some disadvantages. There are many considerations when deciding whether or not to decouple and we'll walk you through the most import ones. Also still to come, an overview of scenarios where it makes the most sense to decouple.
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on Monday, October 13, 2014 0
In the fist two posts of this series, we introduced the topic of decoupling and provided a brief overview of how the concept has evolved over the years. As a brief recap, decoupling is a term used often by marketing professionals and agencies referring to the separation of certain campaign assignments from the core creative and strategic elements of a marketing campaign. Typically, various production activities are decoupled. Decoupling as a sourcing strategy began with the creation of standalone print houses and it now also applies to media buying and digital development services. In this post, we will address why marketers choose to decouple certain services; we will also examine some drawbacks tied to decoupling.

Some of the advantages of decoupling include the following:

  • Specialized Experience/Expertise. As mentioned in Part 2 of this series, one of the main reasons a specific component of a marketing campaign is decoupled is because there is a high degree of technical expertise required to complete these services as well as a large demand for the services. Production houses are solely dedicated to the production of assets; therefore, they have a great deal of experience in a particular category and have been able to develop best practices over the years for the services they deliver.
  • Faster to Market. This benefit goes hand in hand with the former. A dedicated production team establishes best practices and process efficiencies from completing a number of projects within their service category. Process efficiencies translate to less time required to complete assignments and marketers are able to bring their campaigns to market more quickly than utilizing an agency without core competencies in the decoupled service category.
  • Greater Transparency and Stronger Control. The costs tied to production services for a campaign can sometimes be difficult to calculate if managed by an agency that often needs to engage a third party to complete the assignment. Decoupling eliminates the need for agencies to engage third parties with marketers now having a direct relationship with the third party themselves. This direct relationship delivers greater visibility into the costs of producing a tactic. It is important to note this benefit cannot be fully realized without implementing the proper procedures, communication channels and analysis to track all marketing activities, managed by both the agency and those suppliers handling the decoupled assignments.
  • Creative Freedom. Decoupling allows for greater flexibility in the generation of more in-house creative ideas that can be implemented without the involvement of a creative agency. Marketers with in-house marketing teams can develop their own creative concepts for a campaign and engage a production house for the execution.
  • Asset Standardization. Agencies have varying methodologies when it comes to approaching a production assignment and can lead to inconsistencies across assets distributed through multiple marketing channels. By utilizing the same production house for the execution of all production activities, there is greater consistency in the appearance and flow of content across all marketing platforms.
  • More Competitive Pricing. Typically, larger agencies have higher overhead costs when compared to smaller production shops and these overhead costs trickle down to every component of a campaign within the scope of work. By decoupling services to smaller shops, these overhead costs decrease and do not have as much of an impact on the cost of services. Also, as mentioned previously, decoupling leads to faster turnaround times for campaigns and less time and resources dedicated to production activities translates into lower costs.

The disadvantages of decoupling agency services include:

  • Managing Multiple Relationships. Decoupling means taking a certain set of services away from one agency that you are currently working with and assigning them to another supplier. Engaging with multiple agency partners to produce a campaign means managing multiple relationships. A great deal of time and resources will have to be dedicated to monitoring and managing each relationship to make sure they are operating effectively.
  • Ineffective Cross Agency Collaboration. Although creative and production take on different assignments, they must both operate under the same overarching marketing strategy. This means that both agencies will have to collaborate with one another in order to make sure that their activities are aligned. You may find these agencies not being able to work well together, competing against one another for a fair share of the budget.
  • Communication Issues. By having multiple agencies dedicated to the deployment of a specific campaign or set of activities, the path of communication lengthens and becomes more complex. Marketers need to manage the communication process with all agencies effectively and consistently communicating the goals and strategies of the campaign. Similarly, agencies need to communicate with one another in order to convey their ideas and concepts to make sure they are properly executed and delivered on time.

There is no right or wrong answer to whether or not a marketer should decouple agency services. Advantages and disadvantages exist for both scenarios and it really comes down to the marketer's overall needs and internal resources. In-house agencies are becoming more and more popular as well, which blurs the lines even further. The decision to decouple depends on the culture and strategy of your organization, the resources that you have internally, and the latest trends in the market. If you are really struggling with determining if decoupling is the right strategy to employ for your organization/brand, it might help to look at the concept from a different angle. Below are disadvantages and advantages we wanted to clearly outline that call out the benefits and drawbacks of choosing not to decouple. 

The benefits to utilizing one agency for all of your marketing needs include:

  • Cohesion. Marketers are able to keep a consistent and cohesive message and brand identity across all marketing channels.
  • Unified Strategy. Rather than each agency developing their own strategies for their respective tactics, there will be one overarching strategy dictating all marketing activities for the campaign.
  • Strong Relationship. Utilizing one agency means only managing one relationship, which allows for a strong focus on developing a true partnership where your goals are well understood and eventually achieved.
  • Growth Opportunity. Having a strong agency relationship where both parties have a familiarity and understanding of the others goals and culture means there is a greater opportunity for future successful engagements.

The drawbacks of utilizing one agency for all of your marketing needs include:

  • Increased Risk. There is a great deal of risk associated with using one agency for all your marketing needs. If some of your agency's team members decide to pursue other opportunities, you may find yourself not pleased with their replacements and the relationship can suffer as a result. Therefore, with all of your eggs in one basket, you may eventually realize you rely too heavily on a single agency.
  • Difficult Transition (if the relationship does not work out). The transition of all marketing assignments from one agency to another can be a very cumbersome and time consuming process. A great deal of coordination is required and the learning curve can be expensive.

In the next and final part of this series we will review some situations where decoupling makes the most sense to marketers. Also, we will be closing out this series with an infographic summarizing the key takeaways from the Decoupling Debate - stay tuned for this as well.
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on Thursday, July 25, 2019 0
   

The Strategic Sourceror has served as a resource for supply chain professionals since 2008 and covers anything from procurement transformation to packaging specifics. You can access any of our categories from our header, but we wanted to put a little something extra together for you. In this series, we're giving you a list of our top blogs of all time and we're going to give them to you per area of expertise. This is a perfect opportunity for those getting an introduction to Procurement and Supply Chain Management to familiarize themselves with the hottest topics in the industry.

In this edition, we’ll focus on Marketing.

1. Contents of a Thorough Marketing Statement of Work 
3/31/2014
The statement of work (SOW) is an essential, if not the most essential, part of a work contract. This document will outline and describe the responsibilities and costs of a project and, therefore, eliminate any foggy areas. A SOW needs to be especially detailed for a Marketing project to ensure all deadlines and requirements are met. Victoria Baston lists the five sections that should be included in a SOW and offers a few pointers to keep in mind during the drafting process.

2. Media Buying? No . . . Media Procurement 
5/15/2009
Marketing somehow manages to be both invaluable for a company's success and shadowy in terms of its hard dollar worth. This is due to its intangible nature. That said, cost savings is generally one of the main goals for a procurement team and it can be difficult to give marketing a fair space up against the more tangible departments. While there is no concrete formula for determining the ROI of marketing, companies are still recognizing its worth and more Procurement teams are finding value to investing in media purchases. Steve Tatum weighs in on how Procurement’s interest in media investments is evolving.

3. The Stunning Growth of Adidas 
10/18/2018
Although Adidas has long held a prominent spot in the performance wear market, 2017 and 2018 have been especially revolutionary for the brand. Eric Yoder discusses the reasons why Adidas has been able to wrestle with the Jordan Brand for the second spot in the market (with Nike in first). The article hones in on celebrity endorser, Kanye West, who launched his line Yeezy line in 2015 and brought Adidas into the spotlight.

4. Five Best Sourcing Practices for Marketing 
2/18/2014
The RFP process can be tedious and troublesome as many suppliers don't know how to distinguish themselves from other applicants. Expectations and timelines should be explicitly outlined for productive communication to occur, whether that results in a business relationship or not. Both parties risk losing time and resources if the operation is not handled properly. Katherine Wang outlines five best practices to keep in mind when carrying out the RFP process.

5. The Decoupling Debate (Part 3): The Pros and Cons of Decoupling Agency Services 
10/13/2014
In the Marketing world, decoupling is the process of outsourcing certain creative content within the advertising division. Both separating duties and centralizing them have their pros and cons, but here's a breakdown of both arguments. This blog stands as part three of the great "Decoupling Debate" where Megan Connell and Kathleen Jordan unwrap everything "decoupling". Read the first installment to get a better understanding of decoupling here.

6. A Procurement Professional’s Guide to Keeping Up with Marketing Trends, Part II 
4/8/2014
Procurement teams must stay briefed on the latest breakthroughs and trends in Marketing. This can be difficult to achieve properly as the number of resources for obtaining information is always growing. This article is a continuation of a two-part series by Megan Connell, addressing how procurement managers can remain acquainted with Marketing news.

7. A Procurement Professional’s Guide to Keeping Up With Marketing Trends 
2/14/2014
It can be difficult to discern which resources will deliver the most accurate and up-to-date information due to the large scope of the internet. As procurement professionals, you're going to want to know what's really occurring in the Marketing sphere. In this series, we'll provide a list of resources you can trust to deliver credible and relevant information in marketing today.

8. PepsiCo Decentralizes Their Marketing Team 
11/13/2015
PepsiCo has recently decided to decentralize its marketing department. They have made strategic moves such as allowing each brand under PepsiCo to manage their own advertising and marketing strategies and allowing procurement to take a step back in marketing decisions. Will this shift cause the marketing team at PepsiCo to consequently acquire their own rendition of procurement skills to stay afloat? Read what Peter Portanova has to say on the topic.

9. The Decoupling Debate (Part 2): The Evolution of Decoupling Agency Services 
9/9/2014
Decoupling occurs when the advertising department decides to disconnect the production of content from the actual agency; essentially decentralizing the work. Here, Megan Connell will unpack what decoupling is and address the ongoing conversations concerning it. This blog stands as part two of the great "Decoupling Debate" where Connell and Kathleen Jordan unwrap everything "decoupling". Read the first installment to get a better understanding of decoupling here.

10. When to Join the Social Conversation 
7/30/2016
Whether your company is business-to-consumer or business-to-business, social media has become an essential marketing tool. While facilitating engagement is essential and sometimes involves creating content related to a trending event, it's not always the right move. It a politically and socially polarized era, businesses must tread lightly when it comes to what they broadcast. Megan Connell reviews a few aspects to consider when businesses decide to bring social media into their advertising strategy.

You can also take a look at some of our other "Greatest Hits" lists: 


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on Monday, January 04, 2016 0
In a recent post to the Strategic Sourceror, The Benefits of Undergoing an Agency Search, Liz Skipor discussed the advantages associated with conducting an agency search. Skipor noted the increased visibility into service and scope details as key benefits of the search process, along with gaining access to a diverse talent base and the latest technologies and marketing innovations. While an agency search is an important exercise for advertisers to undergo, it is not always the best approach for every organization.

There are certain drawbacks to undergoing an agency search that advertisers must consider before executing this strategy, such as:

  • Disruption of Agency Relationships – For advertisers using this tactic as a way to test the market and ensure their agency’s competitiveness, there is a risk of harming current relationships. Conducting an agency search can send a negative message to your existing agency, whether intentional or not, and have a detrimental impact on your existing relationships. This may result in the agency being unwilling to work collaboratively during your search process or disengaging entirely.
  • Lack of Readily Available Scope Details – The first step in any agency search is defining the scope of work for the services you are sourcing; and, for some, this can be one of the most difficult steps in the process. For organizations with long-standing agency relationships, there are numerous services and value-adds the agency provides that have become second nature and/or were never clearly defined, making it difficult to capture in the scope. In addition, there may be numerous brands, stakeholders, and departments involved in the relationship, making the scoping exercise an arduous task.
  • Time and Resource Constraints – An agency search requires dedicated time and resources to execute and manage the process, from the early stages of scope definition to contracting and implementation. For organizations without the ability to allocate resources to managing this process, an agency search can cause resource constraints and other priorities may be compromised.

Below are a few alternate strategies you may consider if a full-scale agency search is not in your best interest.

Decoupling

Decoupling is a tactic in which you carve out the production components of your agency’s scope from the creative and strategic components. For example, with digital agencies this could mean utilizing your existing agency for the creation of creative concepts and strategic insights for your digital campaign, but utilizing a digital shop for the development of websites, apps, software, etc. The topic of decoupling is highly debated in the marketing space, with various pros and cons depending on the situation. Perhaps your agency has admitted that production is outside of their core competencies or they are currently outsourcing this portion of the scope, then a decoupling strategy would be a suitable approach. However, a decoupling strategy does not make sense for all advertisers, specifically if your creative agency is unwilling to work with a third party provider. A decoupling strategy allows you to engage in a sourcing initiative for a portion of the scope of work, while keeping the remaining services with your incumbent agency.

Benchmarking

Benchmarking is a strategy that advertisers can utilize to determine their competitiveness in the market. The results of this type of exercise can be leveraged to determine if an agency search is the best course moving forward. By leveraging different sources of market intelligence, including rate cards, contracts, industry publications, market studies, etc., a comprehensive comparison of your agency relationship can be conducted. However, the necessary market intelligence for a thorough benchmark analysis is not always readily available, such as relevant scope documents, up-to-date pricing details, etc. Third party providers exist in the market with access to the market intelligence needed to develop a benchmark report. These providers have the subject matter expertise to provide insights into market conditions and best practices to develop an actionable benchmark report with clear insights and recommendations. If the market intelligence exists, a thorough benchmark report provides you with a detailed analysis of your agency compensation structure compared to agencies providing similar services for other clients. A review of contractual terms and conditions is also typically captured in a benchmarking exercise. Through a benchmark, you will be able to determine the competitiveness of all aspects of your agency relationship, both quantitative and qualitative.

Agency Relationship Management

There are plenty of reasons why organizations choose to review their agency relationships, and it is not always because they are interested in finding a new partner. Many times, advertisers want to ensure that their agencies are keeping up with the latest trends and offering them the most relevant and innovative solutions. Rather than testing the market through an agency search to get a glimpse into the strategic and creative thinking of other agencies, a thorough agency relationship management (ARM) program can produce similar results. An ARM program allows you to establish SLAs and KPIs for your agency that encourage them to stay on top of the latest trends. An ARM program can also enhance the transparency in the relationship and agency performance so you can monitor agency activities and ensure they are in line with your goals and objectives. The best starting point to developing an agency relationship management program is sitting down with your agency and having a 360 degree feedback discussion. Your agency should be considered a partner, not a tactical vendor; and it is quite possible that the way they are being managed is limiting their effectiveness and efficiency. Your agency may offer up suggestions to improve the working relationship that can lead to them being more effective on your behalf.

Agency Audit

An agency audit provides advertisers with the opportunity to get an in-depth understanding of their agency’s compliance with the current contract in place and how the assigned budget is managed and allocated. An agency audit does not have to be limited to one particular agency relationship, but can be conducted for multiple relationships and categories. Through an audit, you can determine if there is any duplication of efforts between agencies and if your service standards are being met. Billing and budget reconciliations are other components of an audit, which provide you with visibility into billing discrepancies and how your budget is allocated by the agency, with the involvement of third parties. Similar to benchmarking, the results of an agency audit can help you determine if an agency search is a necessary next step.

An agency search can be a beneficial exercise for advertisers, providing visibility into market pricing, best practices, and industry trends; however, it is not the end-all, be-all of marketing sourcing strategies. There are situations where an agency search is not the ideal approach for an organization. For example, when strategic agency relationships are involved, the scope of work is unclear or not easily attainable, and/or the search process would cause resource constraints. In these situations, it is important to keep in mind that alternate strategies exist that can deliver similar results in less time. Decoupling, benchmarking, ARM programs, and agency audits are only a few of the alternate strategies available to organizations rather than a full-scale agency search. 

 Source One's Agency Relationship Management experts will be at ISM2016, where Source One is the exclusive sponsor of the Exec IN forum. Want to save on registration costs to attend this landmark event? Learn more over at SourceOneInc.Com. 
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on Wednesday, November 12, 2014 0
Earlier this year, Source One’s marketing sourcing team developed a three-part series covering the marketing services decoupling debate itself, its history, and some pros and cons. Although centralizing a supply base and consolidating wherever possible delivers cost and supplier relationship management benefits, it is helpful when analyzing spend categories to be able to separate certain services to increase visibility into quality and cost. Thus, the decoupling debate begins.

Usually, sourcing professionals are concerned with identifying cost savings opportunities and marketers are expected to always be aware of the latest trends in their field in order to stay ahead or keep up with competition. However, if executed properly, decoupling is a strategy that can accommodate both parties. Learn more about some different decoupling viewpoints from this infographic and decide where you stand in the debate.




To learn more about Source One’s marketing/advertising sourcing offering, visit our Strategic Sourcing Marketing Services webpage and learn how Source One can help you increase agency value.
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on Tuesday, July 19, 2016 0
Over the past few weeks, you have probably heard a lot about the latest app craze sweeping the world: Pokémon Go. For those not familiar with this latest obsession, Pokémon Go is an augmented reality game launched the first week in July by Niantic an Alphabet spin-off company. Players (or trainers as they are called in the game) are tasked with finding and catching Pokémon that have been placed in various real-world locations. The game capitalizes on the Pokémon brand, which was started in the 90’s with video games, playing cards, and an animated TV series. For millennials who grew up with Pokémon, this game has tapped into the nostalgia of trading cards in the playground and waking up early to watch Ash “catch ‘em all” on the show. Pokémon Go is available on Android and iOS devices and has become one of the most downloaded and played apps on the market, surpassing some of the most popular apps in recent years, including Twitter and Candy Crush in the short time it has been available.

Augmented reality (AR) refers to when computer-generated images are superimposed into the real world. In the game this happens when users are catching new Pokémon, the screen switches to the camera view and shows the creature in the user’s actual environment. Pokémon Go is by no means the first game or app to use AR technology. In fact, Niantic has created other mobile games in the past using the technology, but they did not experience the same success as their latest creation. Businesses have also experimented with AR technology, such as Yelp’s “Yelp-Monocle” which shows local restaurants and businesses overlaying a street view image. One of the most successful uses of AR has been Snapchat, where users are able to use different filters when taking photos to have different appearances (i.e. dog ears, misshapen heads, etc.).

Given the wide-spread success of these apps, it is evident that consumers are ready for the next generation of app technology and Pokémon Go has set the bar for what is to come. While some brands have already started to integrate AR into their apps, we should expect this trend to increase in the coming months. Brands are going to be looking for developers with the knowledge and skillset to leverage AR and other similar technologies to meet the expectations of what consumers are looking for in apps, while at the same time trying to outperform what is already on the market. As a relatively new technology the individuals with the expertise to support this type of development are not as wide-spread as standard app developers; therefore, brands will need to target digital shops with specialization in this technology.

From a marketing perspective, the demand for this type of niche technology know-how can be used as an argument for digital decoupling (the separation of creative from production of digital work). One of the key reasons why a brand would decouple their digital agency services is to ensure that they have access to individuals with the specialization in the latest technologies and platforms available. As the complexities of digital app development grows, creative agencies are struggling to provide the personnel with the skills to support their clients’ needs. When creative agencies are not able to meet a client’s development needs, they will leverage third party relationships with digital shops to fulfill these requirements. Decoupling eliminates the middle-man in this scenario and allows organizations to work directly with the developers responsible for producing their assets. The debate over whether or not a brand should decouple their agency services is one that has been discussed for years and not limited to the digital space, but as the needs for specialization increases, the benefits of digital decoupling strengthen.

Pokémon Go is a little over a week old and it has already had an impact on the digital landscape, we should all stay tuned for what is to come as this game and the technology grow and mature.
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on Monday, June 20, 2016 0

The marketing landscape is continuously changing, and 2015 was no exception. Mergers and acquisitions, the rise of activities with independent agencies, and the growing popularity of niche advertising agencies are some of the biggest trends that shaped the agency landscape in 2015, and will continue to do so as we enter 2016. Independent agencies are gaining popularity as a result of companies becoming increasingly interested in transparency with their advertising partners. Along the same lines, companies are decoupling agency work away from outsourced services and bringing them in-house to increase control and transparency of their advertising content. Decoupling, when advertisers choose to separate the production components of a campaign from the creative or strategic portion, has been used in a number of different marketing categories, including media and digital.

Brands today, more than ever, are specifically bringing creative, digital, and a wide range of agency services in-house, bypassing outsourced agency efforts. According to The SoDA Report, in the past year there has been a dramatic spike in the number of companies who no longer work with outside marketing agencies — 27 percent, up from 13 percent in the previous year. The result of this movement is being ignited by the need for companies to reduce costs dramatically while simultaneously increasing efficiencies, generating frequent content, and develop close relationships with their consumers.

In 2015, an abundance of Fortune 500 companies, such as Facebook, Instagram, and Allstate Insurance, are exponentially bringing creative agency work in-house, eagerly wanting to connect with their customers in innovative and engaging ways. These companies; they are doing this by leveraging segmented data analytics to cultivate targeted content marketing through social media and digital platforms. Facebook’s in-house agency, Creative Shop, works with brands such as Budweiser, Ford, Sprint and Toyota, to create custom branded videos to run on the social network’s platform, as well as develop tools for small and medium sized businesses to use when drafting campaign ideas (Advertising Age). Facebook has also recently hired the former CP&B, an advertising agency, CEO as the global creative director of the social network’s in-house agency in early January 2016; this indicates the forward momentum Facebook is taking to expand their internal creative agency. 
Likewise, Allstate Insurance brought its digital media-buying fully in-house, early 2015. Allstate’s programmatic buying, which makes up 70% of their media plan, moved away from their long-lasting relationship with Starcom and moved in-house not only for cost efficiencies and targeting abilities but has had programmatic experience in the past and felt comfortable doing so. Allstate’s relationship with Starcom is not final and will continue on the strategic side to gain market knowledge, content and data analytics.  

Digital and social marketing rely heavily on data-driven analytics and insight extraction to formulate and develop segmented and targeted social/digital campaigns. While big data can certainly improve a brand’s marketing efforts, little data is swiftly becoming the new data forefront allowing brands to cultivate closer consumer relationships by allowing strategic opportunities to present themselves. Little data is utilizing the right kind of information to extract actionable insights for effective marketing; it encompasses the “nuts and bolts” metrics, derived from Big Data, to allow companies to personalize content to their consumers. Historically, agencies provided marketers with reports of impressions on their campaigns; however, recently brands are building their internal teams to have core competencies in data analytics. For example, the U.K. Post Office has been putting more weight on building internal data analytics and has brought content operations in-house. Specifically, they, along with other marketers, are bringing data insight development in-house in order to more quickly respond to their consumers. These in-house teams have the ability to respond to consumers at a swifter pace - immediately discovering what campaigns are/are not driving engagement and providing the insight to adjust course as needed.

In a socially intensive world, brands need to execute continuous and relatable content around the clock, whereas the traditional agency model is not necessarily built to fully support this trending necessity. Along the same lines, there are a vast number of approval layers that content must to pass through before reaching the client, which causes bottlenecks for agencies trying to keep up with their clients’ needs. The traditional agency is quickly trying to adapt to the need for this type of on-demand support. The need for this key, strategic competency is increasingly compelling for brands to decouple this agency service and develop the internal talent to provide these insights.

So what does this mean for marketing procurement? Research indicates that, among those companies that have a marketing procurement department, 45% say procurement is somewhat or more influential in deciding to move agency work in-house, but only 5% are “extremely” influential and 10% “very” influential; this influence is likely to rapidly grow in 2016 and in the next upcoming years. The burning question for marketing procurement professionals and CMOs is whether the quality of work that results from an in-house agency can measure up to that of an external agency. Another key question is also whether or not bringing creative work in-house will yield savings and increase ROI.  Moving away from outsourced agencies can pose some concerns aside from economical savings. These concerns center around the people you hire, as your only real assets are those you hire and their skills, ensuring objectivity remains present when recommendations are made, holding each person and project accountable, as every agency knows that its relationship with a client relies on the success of its project output, and continuously investing in creativity. Marketing procurement can develop strategies and assist in making these decisions by understanding the project objectives, mapping out the category profile, which includes marketing spend and contractual analysis, to truly measure the quality and quantity of potential savings from transitioning to an in-house agency structure.

In-house agencies are on the rise and brands are hiring top talent from existing agencies at a rapid pace to help supplement this need to recruit experienced professionals. This rise in popularity of in-house agencies has created an interesting dynamic for the agency landscape. Traditional agencies are now longer competing with each other, but also with their clients’ internal talent. According to Campaign, creative agencies are not well placed to survive unless they distinguish themselves with exceptional skills and content, and even then agencies will need to continue to push their creative boundaries, develop exceptional skills and innovations, and continue to provide high value to their clientele in order to remain competitive in this shifting agency landscape.

Reference: http://smmadvertising.com/house-outside-advertising-agency/


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on Friday, June 19, 2020 0














The following article comes to the Strategic Sourceror courtesy of Naseem Malik and MRA Global 
Sourcing. 

 Part I of this article, I discussed some of the overarching supply chain topics that have been commanding most of the oxygen. Everything supply chain related from risk to resiliency and transparencies and how broad sectors of our economy were being impacted and the stern counsel being provided from experts help us never be caught short ever again. If you bought all that, I have some beachfront property to sell you in Kansas.

‘The Great Supply Chain Disentanglement’
As the current administration continues to harden their hawkish stance towards China, there is another issue fraught with peril that continues to alternatively simmer and somewhat boil over. This is what I like to call the coming ‘supply chain disentanglement’. As our relations fray with the Middle Kingdom, we must be ready to accept the significant cost to competitiveness at play here too. For clarity purposes, goal isn’t to diminish the potential security considerations at play with this key rival and trading partner of ours. When it comes to network equipment for national defense or critical medical supplies - we do share a certain level of interdependence that must be balanced.

From the US perspective, we are dependent on China for pharmaceutical ingredients and that requires us to solidify and diversify (hopefully soon) our pharmaceutical supply chain prior to worsening relations. According to the FDA, in 2019 an estimated 40% of finished medications and 80% of active pharmaceutical ingredients were manufactured overseas, with the bulk of those coming China and India. Lest we think they have all the power, China too is dependent on US drugs, particularly our cancer drugs. And yes, we are still the world’s leading source of pharma innovation, so we have that going for us too. From a strictly risk mitigation perspective, it’s all the more important for both partners to ensure there aren’t any supply disruptions for these critical drugs and treatments as we learn to co-exist with growing uneasiness while still being co-dependent. Sounds like a lot of fun for those eager negotiators out there.

This decoupling also affects educational linkages between the two nations. With the ensuing Chinese brain drain here, the US will have to invest more in STEM at home and let up on its immigration policies with other countries like India to bridge the gap. This will also require us to deepen our economic and political ties with friends and allies across the pond and the world. Of course, this too sounds like academician-speak as they’re good at touting these lofty ambitions worth pursuing, but in actuality much harder to implement in real life.

The Vaccinated Supply Chain
What really caught my fancy in the recent past relates to none other than the one and only Amazon. They have certainly earned some goodwill during the pandemic as the country was dependent on their supply chain infrastructure and by the massive hiring they undertook. Where they really stunned their shareholders was in their last quarterly earnings call when Bezos told them all that they may want to take a seat…because Amazon is now trying to create the first ever vaccinated supply chain. They will take the entirety of their $4B quarterly profit and dedicate it to this cause. Imagine any other CEO doing this and their stock and company would get skewered. But if there’s anyone that can back their big talk, it’s the biggest of them all.

This vaccinated supply chain will cover PPE/safety protocols, enhanced cleaning, hiring new workers and increasing compensation. Their goal is to have COVID-free supply chain that can handle all of their goods safely from supplier to customer. It’s a brilliantly audacious move because others can’t even come close to this. FedEx can’t do it as they don’t control the front end. Walmart can’t do it because they don’t control the last mile and still have to use 3rd party delivery firms. How powerful a narrative is it to tell your suppliers, customers, partners, and workers that we will have an interruption and COVID free supply chain and oh by the way, no one else can even come close. It helps them that they’re fully vertical and have access to cheap capital to pull off this very expensive feat.

The Hottest Product Around
And of course, the icing on the cake is that they are also feverishly working to develop what will probably make the world’s biggest consumer product – testing for the coronavirus. Coming soon to a delivery near you – fresh food and your own home testing kit. With apologies to all other successful supply chain companies and models out there, how soon before it’s just the Amazon supply chain and everybody else when we refer to continuous evolution/results when it comes to the ubiquities of the supply chain?

MRA Global Sourcing is a specialized recruiting solutions firm, placing top talent in the supply management arena including procurement, strategic sourcing, supply chain and logistics.
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Gabriella Bittner on Monday, June 08, 2020 0


The print category is a very unique category within the marketing space. The broad range of specification details and production requirements combined with the fluctuating market conditions results in a tremendously complex category to manage. Our experience within the print material space has lead us to understand the nuances and develop a systematic approach to identifying the optimal solutions that meet and exceed your organization's various print needs. Our approach effectively manages the print material sourcing process and involves:

1.       Understanding the current state of the category
·       Collect the specification details relating to the category and discuss the print profile, frequency, and sizes.
·       Take the time to listen to both the stakeholder and supplier team members, and understand the challenges, behavior drivers, and future plans.
·       Assess relationships with existing incumbent print suppliers by understanding how the supplier relationships came to be and how the relationship has evolved over time. Identify what capabilities are being utilized and what offerings remain untouched.

2.       Developing a scope of work
·       Gather all specifications and technical details regarding the print materials including job volumes and expected turnaround times. Truly understand the value-adds that cannot be quantified.

3.       Identifying opportunities
·       Print what you need when you need it and save on warehousing and bulk printing costs by switching to print on demand services to eliminate overages.

4.       Decoupling the paper portion of the scope and leverage a paper brokerage
·       Paper may constitute 50% of your total invoice. Take the time to understand the components of print material and limit time spent negotiating with individual vendors.
·       Eliminate unnecessary costs by leveraging volume for preferred pricing and combined shipping services.

5.       Identifying potential supplier alternates who are able to support the scope of work
·       Ensure potential solutions address the evolving needs of the marketing category within the stakeholder organization and are able to provide high-quality services and value-adds.

6.       Establishing RFX documents and supplier bid packages
·       Leverage the scope of work to describe the print job or jobs to ensure accuracy. Incomplete print specifications lead to not only misunderstanding and uncertainty but ultimately inaccurate bids and false savings.
·       The Request for Proposal documents should include scope details based on historical and/or forecasted job volumes, in addition to capability and capacity requirements involving the print management supply chain and qualitative expectations.

7.       Gathering participant proposals and analyze responses
·       Assess bids based on the breakdown of pricing details to ensure all cost components are captured.
·       Scorecard participants qualitative and quantitative responses based on predetermined selection criteria to identify supplier finalists and total opportunity.

8.       Negotiating pricing with Print suppliers
·       Leverage the RFP responses to ensure you're getting the very best prices for the print services and materials.

9.       Establishing supplier agreement
·       Include contract best practices and provisions to effectively measure performance (including Service Levels), as ongoing performance drives the success of a relationship.

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on Tuesday, December 13, 2016 0
This year has been a difficult one for the marketing agency world and it does not appear it will be end any easier.

Back in June, K2 Intelligence published the results of their investigation of media agencies, detailing the pervasiveness of cash rebates and other “non-transparent practices”. And now, early last week it was announced that certain advertising agencies were being investigated by the Justice Department for allegedly rigging the bidding process for production work to ensure their in-house teams were awarded the business.

The marketing agency landscape consists of both large advertising agencies and smaller, specialized shops, which are oftentimes owned by a holding company. According to the 2016 AdAge Agency Family Tree, the four largest agency holding companies are WPP, Omnicom Group, Publicis Groupe, and Interpublic Group of Cos., each with a network of agencies underneath them. It is these holding companies that are the center of the DOJ investigation.

In recent years there has been a growing trend towards using more specialized shops for services, rather than the large advertising agency. Decoupling, the carving out of production from creative services, has led to an increased number of independent production houses, who are now a more prominent competitor to agency holding companies than ever before. One of the key reasons why marketers decouple agency services is because advertising agencies frequently utilize third parties to supplement services where they do not have the capabilities or expertise. In an earlier post, we discussed how these large agencies are adapting to a changing marketing landscape by acquiring these independent agencies to capitalize on this trend and bolster their expertise in these production services; however, agencies must still compete with production shops to be awarded this business.

For marketers who have not decoupled production services, it is a standard practice for the agency to bid out these jobs to a number of production shops to ensure they are getting competitive pricing for their clients. Typically, that agency's production houses or in-house shops that fall under their agency network is included in the bidding process. The DOJ’s investigation is focusing on whether or not agencies and in-house shops are purposefully undercutting or influencing the pricing proposed by other production shops to ensure they are given the business. Independent firms have come forward stating that they were approached by agencies to inflate their bids under the promise/threat of receiving future business or agreed to provide “check bids” in order to meet bidding requirements. Additionally, following the announcement of the investigation, K2 revealed that during their investigation into media agencies they found similar instances of bid-rigging with creative agencies.

The advertising world has a lot to recover from after the scrutiny brought on by K2’s report, it will be interesting to see how this most recent investigation will impact the landscape in 2017.

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on Friday, March 11, 2016 0

Source One Round Up: March 11, 2016

Here's a look at where Source One experts have been featured this week!





NEW BLOGS:

Continuous Cost Reduction for Direct Materials
Despite being often overlooked, there are a number of best practices organizations within the manufacturing industry can implement to achieve ongoing cost-reductio. This week,  Source One Project Manager Ken Ballard explores three techniques for achieving continuous cost reduction: leveraging economies of scale, streamlining transactional and manufacturing processes, and decoupling value added services.


Navigating Complexities: Keys to Successfully Sourcing Initiatives
Yes, sourcing direct materials such as engineered products can be challenging, especially when it comes to navigating detailed specifications and requirements. However, throughout each step of the sourcing process there are actions you can take to remove some of that complexity. Source One's Project Manager and Engineering Subject Matter expert provides his advice for simplifying the sourcing process, including how bid packages should be prepared, effectively manage supplier relationships, and how to properly validate and assess bids. 


NEW PODCASTS:
 Countdown to ISM2016 Podcast Series
As Diamond Sponsors of ISM2016, we're gearing up for three days of supply management learning and networking during the premier supply chain event of the year. With just two short months to go, we're counting down to ISM2016 with a new podcast series. Each week, catch a new podcast brought to you by one of our strategic sourcing and cost reduction experts. Listen now to:









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