Martin RileyGroup CMO Pernod RicardPresident of the World Federation of Advertisers
The Future of Effective Partnerships
MARTIN RILEY
GROUP CMO - PERNOD RICARD
PRESIDENT – WFATHE WORLD FEDERATION OF ADVERTISERS
Who AM I?
Pernod RicardWho are we?
Pernod Ricard number 2 of the wine & spirits industry
BRAND COMPANY MARKET COMPANY
HOLDING
8,6 billion € (annual turnover)
19000 people around the world
100 production sites
Iconic brands
Prestige brands
Strategic Premium Brands
Where do we come from?Paul Ricard« make a friend a day »
2008
2005
2001
1975
3 Big Bangs in 10 years
Growing through acquisitions
1805
1932
70 of the world’s biggest marketers
Membership doubled over the past 6 years
• Best-in-class forums meet regularly around the world.• CMOFORUM• IMCFORUM• MEDIAFORUM• DIGITALFORUM• SOURCINGFORUM
• Limited to 20-30 of your Marketing Professionals. No agencies or media owners.
• Interactive format hosted by member companies.
Peer-to-peer groups
NYC London ParisSingapore
Global Agency Remuneration 2014Remuneration models in use across all agency types
Source: WFA online survey: ‘Global Agency Remuneration Trends’; Base: 43. Date: Jan 2014
8%
1%
3%
24%
49%
4% 11%Commission – fixed rate (fixed % of media billings)
Commission – sliding scale (% varies based on media billings variation)
Commission – variable (% varies by media used)
Fixed or output-based fee (fixed for project/ period)
Labour-based fee (labour time calculated by the hour/% of personnel time)
Value-based fee (based on value of agency service provided - not time or cost based)
Performance-based fee/bonus (based on outputs e.g sales/brand performance met-rics)
Global Agency RemunerationRemuneration models in use across different agency types
Source: WFA online survey: ‘Global Agency Remuneration Trends’; Base: 43. Date: Jan 2014
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%Performance-based fee/bonus
Value-based fee
Labour-based fee
Fixed or output-based fee
Commission – variable
Commission – slid-ing scale
Commission – fixed rate
Creative agency remuneration shifts away from paying for man hours, towards paying for performanceCreative agency remuneration models (2011 vs 2014)
Source: WFA online survey: ‘Global Agency Remuneration Trends’; Base: 43. Date: Jan 2014
2011 2014
10% 12%
15% 17%
59%51%
4%
3%
15%23%
Performance-based fee/bonus
Value-based fee
Labour-based fee
Fixed or output-based fee
Commission – variable
Commission – sliding scale
Commission – fixed rate
The decline in paying for hours is even more pronounced with media agency remuneration Media agency remuneration models (2011 vs 2014)
Source: WFA online survey: ‘Global Agency Remuneration Trends’; Base: 43. Date: Jan 2014
2011 2014
40%
48%
0%
10%
44%
21%
16%21%
Performance-based fee/bonus
Value-based fee
Labour-based fee
Fixed or output-based fee
Commission – variable
Commission – sliding scale
Commission – fixed rate
The 4 “C”s required by clients
- Creativity
- Challenge
- Connected (to business)
- Continuity
And … Culture / cultural fit
The Future of Effective Partnerships
The 4 “C”s for agencies
- Communication
- Creativity
- Craft
- Contribution (to business)
And … Committment
The Future of Effective Partnerships
What clients want from agencies
- Individuals with ideas
- Flexibility
- Can do attitude
- Output and outcomes
- Impact
- Fair remuneration
The Future of Effective Partnerships
What clients don’t want from
agencies
- Inflexibility in structure and network
- Bottom line focus – endless remuneration discussions
- Corporate approach
- Counting the hours
- ‘Supplier’ relationship
The Future of Effective Partnerships
Let’s start again … ?
- Entrepeneurial approach
- Agencies - Names on the door
- Clients - Names on the
label
The Future of Effective Partnerships
The agency of the Future
How would I build the agency of the future
to meet my needs as a client ?
The Future of Effective Partnerships
The agency of the Future
What do I want ?
- Focus on output and outcome
- Planning connected to business
- A business partner (skin in the game)
- Outstanding relevant creativity in all relevant media and touchpoints
- Challenge and continuity
The Future of Effective Partnerships
Conclusion
- Back to the core business relationship
- Trusted advisors
- Mutual respect – from business and creative challenges
- Entrepreneurial approach from both sides
- Outstanding committed individuals
- Work that makes a difference
The Future of Effective Partnerships
The future of Effective Partnerships