Ad Agency Governance

This new series addresses the pressing need for marketing organizations to rationalize their business policies and transactions with their advertising and marketing partners, applying the proven principles of strategic sourcing and supplier management to the procurement of creative services, marketing content, and production.

Making the Case for Ad Agency Governance

Masterclass interview with Chetan Saiya, CEO of Assetlink, describing how enterprise-marketing organizations now use a systems-based process to manage their creative partners and advertising agencies in a more accountable and efficient manner, ensuring that agencies provide the most appropriate resources at pre-agreed prices and terms of service. (12 pages) DOWNLOAD NOW
BACKGROUND

According to Wikipedia and other sources, Governance in its widest sense refers to how any organization, including a nation, maintains itself as self-sustaining entity.

The concept of governance includes all the processes, systems, and controls that owners, stewards, or designated individuals use to safeguard and grow assets of the organization.

Corporate governance consists of the set of processes, customs, policies, laws, and institutions affecting the way owners, board of directors, or corporate officers must direct, administer or control a corporation.

Corporate governance also includes the relationships among the many players involved (the stakeholders) and the corporate goals. The principal players include the shareholders, management, and the board of directors. Other stakeholders include employees, customers, creditors, suppliers, regulators, and the community at large.

Corporate governance addresses two important themes:

ADVERTISING

Our publications in this series emphasize the governance of commercial organizations, whether or not they are run for profit and, in particular to corporate governance of “advertising” and the marketing supply chain.

Advertising consists of the sum of media, trade promotion, and consumer promotion, including media advertising costs of planning, production, airtime, and space costs incurred for television, radio, magazine, newspaper, billboards and other media outlets.

Trade promotion includes costs to introduce new products to distribution partners and to support the featured promotions of existing products and services by distribution partners.

Consumer promotion includes costs incurred to generate trial usage for featured products and services, with the intent to convert the users to become repeat, loyal consumers.

AD AGENCY GOVERNANCE

Ad agency governance consists of a systems-based process that marketing organizations use to manage their ad agencies and creative partners in a more efficient and accountable manner.

Ad agency governance ensures that:

  • Agencies provide the most appropriate resources at mutually agreed prices
  • Marketing to benchmark the performance of comparable services and providers
  • Marketing groups can maximize the effectiveness of a large, diverse creative and production groups working on integrated marketing programs.
CHANGE AGENTS AND DRIVERS

Our publication series provide essential guidance and insights to those individuals tasked with improving how their firms or client firms source of creative services, advertising, and marketing content from the firm’s marketing supply chain:

VP or Director of Marketing Operations represent a marketing role of the executive held accountable for one or more marketing activities such as advertising, creative services, digital marketing, product launches, sales enablement, and strategic events.

Directors of Marketing Operations normally report to the Vice President of Marketing or in special cases the CMO. The VP or Director of Marketing Operations generally “owns” the technical systems of Marketing Operations Management and, in particular, Ad Agency Governance.

MARKETING SUPPLY-CHAIN MANAGEMENT

Supply chains in the general sense refers to the integrated structure of activities that procure, produce and deliver products and services to customers, starting with the suppliers of your suppliers and ends with the customers of your customer.

Supply chain management entails a network of interconnected businesses involved in the ultimate provision of product and service packages required by end customers. According to the Council of Supply Chain Management Professionals (CSCMP), Supply chain management encompasses the planning and management of all activities involved in sourcing, procurement, conversion, and logistics management. It also includes the crucial components of coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence, supply chain management integrates supply and demand management within and across companies. More recently, the loosely coupled, self-organizing network of businesses that cooperate to provide product and service offerings has been called the Extended Enterprise.

Marketing supply chains emphasize how marketing organizations:

  • Research, analyze, and define customer requirements and value propositions that will meet or exceed customers’ expectations and criteria for value, quality, and satisfaction
  • Develop marketing strategies, themes, and messages
  • Communicate a brand and value proposition to potential customers mostly consider, engage, and buy

Marketing supply-chain management, also called, Demand Chain Management brings the discipline of strategic sourcing and procurement to how a large brand-marketing firm buys and uses creative services, content, and production.