What do clients want? Give them the reporting they need.

I’ve just read the article from The Drum (http://www.thedrum.com/news/2017/05/15/deloitte-could-move-acquire-engine-group-response-accentures-karmarama-buyout) suggesting that Engine Group could potentially be acquired by Deloitte. That’s some incredible journey for a group I played a bit part in at its inception 17 years ago. Equally, it makes sense in the continuing context of consultancies acquiring creative agencies.

There’s plenty of speculation on why this trend is happening, and what is means for clients and the long-term health of the creative industry.

My speculation focuses on client reporting, and why I believe these moves will be for the better.

Agencies are differentiated in many ways, people, culture, scale obviously, but operationally they are similar, and the systems and commercial data challenges mostly the same. Systems are generally in place to capture time, and agency staff grudgingly now accept the need to do timesheets.

In this context, it was also interesting to read Rance Crain’s article in the Advertising Age (http://adage.com/article/rance-crain/stan-richards-sell-path-mediocrity/309003/) on Stan Richards approach to timesheets and the case he makes for them in terms of “if they’re not filled out every day, they will not be accurate, and since time sheets drive every financial consideration, they have to be correct”.

He also brings in the inarguable concept of “respect”. Timesheets are what he requires to operate his business, and his people with respect to that need, comply.     

These exceptions aside, consultancies have always been masters of time capture – in strong competition with lawyers, with their ingrained cultures and disciplines demanding adherence, and reward (or firing) intricately tied to billable hours.

Stan is not selling – for many good reasons, but for those agencies that are selling and to consultancies, it’s likely there will at least initially be more billable hours enticed out of their pools of talent.

This might be better for short term agency profitability, particularly in earn-out years, except that many agencies are already overworked, and scopes of work largely misunderstood in terms of resources and fair pricing for work[1]. So attempts to squeeze more creative juice out of what is not a machine, doesn’t bode well for anyone longer term.  

This however wasn’t my point.

Go beyond the capture of time in agency land, and this is where their system worlds really start to collapse, and will be one of the biggest challenge for consultancies, but with upside for clients.

Clients of course want optimal results for their marketing spend, more bang for their buck and all the associated analytics that go with that.

However, they also want plain, straight forward reporting of what is being spent and where, and this is where agencies typically fail.

Many agency systems either on their own, or in the stacked combinations deployed, struggle to produce the information to satisfy agency’s own internal reporting needs, let alone for how their clients want or need their relevant information.

The networks, faced with the challenges of global client account management, thousands of discrete jobs with resourcing, production, media and material elements to keep track of, every client demanding a different set way of billing to suit their systems approval/payment processes, have spent millions in customising systems.

And yet sadly, they still simply can’t get the data out - or if they can, it’s typically jockeyed in and around multiple spreadsheets, losing data velocity and costing ever more money to compile.

I had a conversation this week with the head of brand at a major consultancy, saying how her large network agency couldn’t provide her with the basic information she needed to understand how her budget was being used. Knowing the agency, and the system they have in – this is no surprise.

Admittedly agencies are increasingly bolting on business intelligence tools, and are making brave attempts with dashboarding and distributed reports – except their challenges remain with data integration from multiple sources.

Consultancies on the other hand are filled with systems experts, with the Big 5 even now offering their own systems applications for specific sectors, such as retail and financial services, so it’s not beyond them to crack the nut of developing integrated system reports on client marketing spend.

In this competitive upward spiral, my take is agencies should take note of what consultancies are doing and mimic them, if not fully their cultures, at least their approach to their systems strategies and the importance of getting data in and out, and proactively to their clients.

Clients will be delighted, and everyone will be better off.

About Agency DNA

I established Agency DNA in 2009 as an agency-focused business systems consultancy. I have a Big 5 background, deep agency and systems experience, and we now have the people, the systems and the vision for delivering the integrated solutions that agencies need, not only for their own reporting, but also for their clients.  

[1] For an in-depth view on this, I suggest reading Michael Farmer’s aptly titled book, “Madison Avenue Manslaughter” (http://www.madisonavenuemanslaughterbook.com/).

20 Years. An agency systems perspective.

By Chris Lever, Founder Agency DNA

My first UK marcoms role was in 1995 as agency FD of Bernard Hodes, an Omnicom/DAS group company. Obliged to conform to the rigour by which DAS managed its portfolio and deliver rapid improvement in their two key pertinent drivers, profit margin and working capital, I was more than surprised at the way DDS, the group imposed agency media booking/billing, job management and accounting system, made getting these metrics a major exercise. A single-minded Kiwi Financial Controller who I’d hired to assist me had words I couldn’t pronounce for a system which offered not only opportunity for one-sided entry, but could only produce a balance sheet by downloading disparate ledgers and having them combined in Excel.

Fast forward 20 years, DDS rebranded as Media Ocean, rebuilt its database, and yet seems it still can’t handle supplier invoices with more than six characters, or allow a major network create a new field to hold the PO references of Google and Facebook generated from their booking systems. If a network with two billion pounds passing through its pay-as-you-go ledgers doesn’t get what it wants, what hope does a smaller agency have? Excel is a strong supplement.

Step back again fifteen years and I’m on a team with other senior players from BMB&B, Leo Burnett and  BBH collectively giving up weeks of our lives to work with Maconomy, guiding them on the development of an agency solution on top of a complex, yet robust financial system.

Youthful and optimistic, this was heralding a golden age where a Scandinavian vendor understood agency complexity is a state of mind. We waited for the release of a system that would be as good as the Power-Point slides suggested, give instant visibility over the inner workings of our agencies, enhance our staff’s lives and make the coffee. Strange how I have since felt a strong compulsion to apologise to the many Maconomy users who in those early days found themselves falling short of utopia. More like tumbling into the Underworld.

Talking it through afterwards with Morton, the Danish Senior Developer, trying to understand what happened between the emparting of our requirements and the end product, it seems back in Copenhagen they re-thought our needs and built as only they knew how. Something definitely got lost in translation.

Undaunted, this was the start of the new millennium and things would only get better.

The thing with Maconomy is you’re buying a big box of tricks, and you need to know what you’re doing, have a very detailed spec, patience and a frothy budget.

A range of separate and colourful workflow systems have been invented to fill the many gaps left by Maconomy, despite Deltek it, but the reality is Maconomy for many ends up an expensive and under-utilised general ledger and accounting system. Excel reigns supreme.

In all this time, like a long-life battery powered toy soldier, Rebus, now Paprika has quietly and defiantly marched on to a steady beat. A Cobol-based solution developed almost 30 years ago, it was the go-to system for smaller agencies and despite attempts by SAGE, QuickBooks and latterly, Xero, the NZ originated cloud system, in many ways it still is.

Paprika has never made a big show of itself, yet through the passage of time and the reluctance of agencies to change systems, it has built a tidy market share of around 1000 agencies, a handful who are global. Despite being clunky and not so easy to use, it’s seen as a safe bet.   

A major drawback though it is a single currency database system. What this means is as soon as you open your first offshore office, you’ll need two databases. Imagine you have 20 offices in 14 countries. That’s a lot of databases, and even more Excel to string these together.  

Today the large networks still angst over systems, systems like Maconomy were seen as a great leveller. Mid-tier platforms for standardising multiple agencies, before moving upwards onto something that allowed greater flexibility in global client billing and reporting hierarchies, and migration to some form of shared service. Indeed this was my own strategy in deploying it into WCRS, now The Engine Group, following our MBO in 2004.

The problem is upwards moves to say Microsoft Dynamics AX or SAP come with their own monumental challenges, and matching price tags. A litany of issues prevail in the network attempts with these systems.

For SME’s, the great hope is the cloud.  

New agile systems, built from the ground up overcome many of the limitations sitting in systems made in the past. Agencies can implement without major cash outlay, retain flexibility and enjoy inbuilt scalability. Cloud usually means seamless and automatic upgrades, allowing users to benefit from continuous system improvements. Never again be threatened with an unsupported version.  

The better cloud solutions have open API’s, allowing true connectivity with other business tools, CRM, CPM, and BI, fully embracing the notion that whilst they may do more, they also do it better. The really good ones integrate all the features of job management, accounting and resourcing – the benefits of which are staggering.

There is still no single panacea for the world of marcoms business management and reporting intelligence, and in a tight margin and competitive digital world, agencies need to find their own differentiators.

Assessing what is important to agencies, the information needs at all levels, the degree of flexibility and autonomy management wants to allow, requires a matching to increased number of suitable systems of today which can offer exactly that. Even Excel now competes with Google Docs.

Which all means it is a really interesting time for agencies.

Overall in the past 20 years agencies have not demanded more, and have been fearful of change, even at risk of continuously adding overhead to get basic information circulated. Accepting compromise has unfortunately ingrained vendor complacency.

Yet for many of the new breed of agency, client demands, the general increase in the variety, scope and speed required of work, and the associated massive increase in the volume of data, compromise and complacency can no longer be tolerated.

The good news is there is now choice. The cloud has brought options that are fully featured, continuously improving, intuitive, easy to use, cost effective and quick to implement.

Agencies fear making decisions on systems, but change should be embraced. As a famous person once said, “Not to change, is to die.”  

So the future for agency systems is indeed bright and can be whatever colour you choose for your management dashboard.