Wednesday, October 31, 2007

Project Cost Containment

Whether your the client or the agency, at one point you're subjected to "scope creep." By definition, the project that won't end and/or elements keep changing. Everyone loses in the end. The agency tries to be PC by balancing cost overruns, between controlling the client and their profit. The client, may or may not, realize the impact of their actions.

Scope creep comes from both agency and client sources. The client may have poor communication channels within the company, i.e. advertising, marketing, R&D, legal, and a plethora of internal department approvals. The agency may not clearly communicate the costs as they occur, back to the client. This is a frightening thought and can/has put smaller agencies out of business.

There are several solutions to avoid the scope creep situation. Although, it may not eliminate its occurance.
- At the project start, have standard documentation that outlines the project's expectation. This can be the creative or marketing brief, quotation or budget approval form.
- Outline in a document, the procedure for additional charges. My agreement called for all costs exceeding 10% of quotation required client approval, prior to execution. There were times when this occured on a photography location shoot and changes required instant approvals to proceed. Be sure an authorized approver is on set or connected to their cell phone/blackberry. Downtime can increase costs exponentially.

Costs can lose control as early as the concept design stage. Be aware, just because the agency designed it, doesn't mean the client will approve it. If concepts are consistently rejected, then review the communications links supplying the client's desires. There is a breakdown somewhere and you must find it. Either the client has not presented their needs properly, the agency representative(s) are not conveying the project accurately or the job initiation process/documentation needs refinement.

All projects should require the following documentations, before anything happens:
- Budget
- Schedule
- Brief (Marketing, Advertising, Creative)

Execution should never start without the following, where applicable:
- Approved creative (layout, storyboard, editorial content)
- Product
- Photography art direction
- Refined budget
- Specifications (print, broadcast, web)

One more area of discussion, level of execution. There are a hundred ways to execute a single layout or storyboard. Talent costs can range from $500 to $10,000 a day for the same skill set, i.e. photographer, model, producer. Be sure everyone on the project understands the pros and cons at each talent level. 99% of the time, the budget will dictate the level of execution. Everyone involved in the campaign execution needs to be clear on the expectation.

Monday, October 15, 2007

First Lesson

My first class, Advertising 101 (not a joke; literally ADV 101), was held in an 300 student auditorium. What seemed to be a mile away, the gray-haired professor stood at the podium and exalted, "You have choosen a great field. When the economy is bad, businesses must advertise to draw customers. When the economy is good, businesses must advertise to beat the competition." What he didn't extol was, "Get used to unemployment."

Marketing and Advertising is a very unstable career. When the economy is bad, companies cut their marketing and advertising budgets. When the economy is good, companies may bulk up on staffing for a temporary ride. In the 21st Century, lean operations is the norm. I read in "48 Days to the Work You Love", by Dan Miller, the average job lasts 3.2 years. Advertising Age indicates the average CMO position lasts 18 months.

Don't be discourageed, by these stats. Marketing and Advertising can be a fun career, if you like a fast-paced, changing environments. During one of my unemployment stints, I received company sponsored out-placement services. This service teaches you how to "transfer" your skill sets. I didn't want to "transfer" my skill sets. I enjoyed my industry. Working at several companies can really broaden your skills, as well as provide steady growth. The key to survival is tolerance and tenacity. Your company turnover should not be too high, unless you're really unfortunate to pick companies with short life spans.

Friday, October 5, 2007

Initial Thoughts on differentiating between Advertising and Marketing

It seems in the 21st Century, companies do not understand the difference between marketing and advertising. With their goal to reduce costs, they have combined the two disciplines into one.
Traditional Marketing involves the four “P”s: Product, Price, Place, Promotion
Advertising involves how to reach and communicate with the customer
They collaborate in determining product Features (marketing) and Benefits (advertising); target customer

I believe the industry itself has blurred the lines between marketing and advertising. Marketing should be weighted towards product development. Advertising should be weighted towards developing and executing the brand communication voice. The two disciplines interface on strategic direction.

The 21st Century has also lost focus on the customer and develop strategic plans that fill their own needs (i.e. company profit goals, meaning build it and they will come). Advertising has become competitive in manipulative methods to get the consumer to buy. They use countless data points and then develop an esoteric message, like cars driving on the edge of a building. Fine work for the CG team, but most people buy a car to drive on real roads not those in Second Life. This is not to stifle creativity, but the message must connect the consumer to the product.

Under the “Features and Benefits” school, advertising should appeal to filling a consumer need, real or perceived. From the customer’s point of view, it’s called, “what’s in it for me?” Both disciplines need to think like consumers.

Marketing should research and define the customer needs and develop the appropriate products. These products must be better than the competition. If they can’t be better, then they must differentiate themselves from the competition.

Marketing will define the target market. Advertising must do the research on how best to reach this market, speak their language and determine the channel(s) of communication. They must be creative, without missing the message. There is definitely a partnership and synergy between advertising and marketing.

Companies need to engage or reengage both disciplines.