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In March of 2015, Jon Mandel, an experienced c-level executive on Madison Avenue, declared in a keynote speech at the ANA annual conference that “kick-backs” at the advertising agency level and/or at the conglomerate holding companies who control close to 80% ownership of the world’s largest advertising agencies were pervasive, totaling in the hundreds of millions of dollars.  Mandel’s speech sent shockwaves through every side of the business associated with advertising, most prominently the top advertising brands who were allegedly being left in the dark.

When the ANA announced that it had hired two outside consultants, one with cyber security experience, to advise the ANA, the advertising industry’s largest trade organization representing brands like P&G, Unilever, AT&T and hundred more, I published a blog post on the advertising industry scandal. that Jon Mandel brought to the forefront at the ANA’s annual convention.

In my three decades working for Hollywood Studios, the largest broadcast television groups and working on Madison Avenue can I recall a more explosive event triggered by one very brave and bold individual, Jon Mandel.  Some credit has to go to the ANA board who had to have approved the content of the speech as Mandel was serving as a paid consultant at the time.

After that, the ANA went through a vetting process for consultants to investigate and recommend potential fixes to the board.  Having been a part of one of the finalist groups presenting to the ANA’s executive committee, I can attest to firsthand experience that the ANA with Jon Mandel still participating as a consultant were serious and on a timeline to advance the discussion.  The only exception I took to the ultimate approach that was being taken was making the broad discussion more open to the community who had a vested interest in findings and the outcome.

Maybe suggesting the use of social media was too progressive for this group, but I pointed out that it was the only way to let all stakeholders have a voice in the process.  So now trade journalists and industry experts are left wondering what, if anything, is going on as both the WSJ.com and Jack Meyers, industry expert, did in published stories where the headlines were:

“Seven Months Later: Smoke But No Fire”  Media Village.

After over three hundred hours of research preparing for the presentation to the ANA executive committee and Jon Mandel, I felt like I had a good understanding of the critical issues which required infographics to explain.  Without having some public debate, the industry may not hear a word from the ANA on the so called “transparency” issues, or “kick-backs”, “fraud” for years because it is complicated, heated, and almost impossible for two organizations that have so much at stake, ANA and AAAA’s, to reach consensus.ANA_Blog

Case and point where the AAAA’s, Agency’s trade group, feeling pressure made a public announcement, prematurely in my view, without the support of the ANA.  I believe I said this was the advertising industry’s version of the “Watergate Scandal.”   Because of that, I think Jon Mandel should get the book rights and play himself in the movie to a story that is destined to get published.

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ANA_BlogThe AAAA’s released guidelines for a select set of issues in response to allegations of Kickbacks, transparency, ethical issues raised initially by a speech made by agency veteran Jon Mandel at the ANA’s annual conventionANA Feud Over Transparency.  The ANA was quick to make it clear that his organization’s members were not endorsing the AAA’s guidelines.   In full disclosure, I spent several months researching the “transparency” issues in response to the ANA’s RFP for consultants to investigate the transparency allegations.  While my team didn’t win the bid, I learned a great deal about what is a list of real issues.  There are four players in this discussion divided into two teams: 1) ANA and the world’s largest advertisers and 2) AAAA’s and the world’s largest advertising agencies and the holding companies that own blocks of agencies.

The ANA exists because of its clients who represent the world’s biggest brands.  While I believe the ANA has taken a very professional approach to a very complicated list of transparency issues, they are paid by the advertisers and are therefore conflicted because of that relationship.   The AAAA’s represent the advertising agencies and holding companies and they are also conflicted and bias towards the interests of their advertising agency clients.  The result is that you have two conflicted trade organizations who have limited authority trying to negotiate what is the equivalent of “Watergate” for the advertising industry.  There are “smoking guns” which Jon Mandel pointed to a few of the most serious issues.  Some will deflect this assertion by pointing to the fact that advertising agencies exist because of the world’s largest advertisers who pay fees to agencies, yet are on the opposite side of this debate.  Global companies like P&G, Unilever, GM, McDonald’s outsource advertising to agencies to fulfill specific marketing services.  Unlike the advertisers who depend on innovation to remain competitive, the advertising agency sector has used scale as a dominant strategy to compete.  Advertising agencies are not value creators, nor are they innovators.  Agencies are moving towards programmatic as a method to increase operating efficiencies.  Programmatic has focused solely on speed and now have been caught flat footed over use of “bots” and “viewability” or the critical component of any buy/sell transaction, common currency.  The transparency debate points fingers at whether practices might be legal, but not ethical.  Audit rights stopping at the agency level when it is very clear that the biggest deals are made at the “holding company” level where multiple owned agencies are bundled from operating units all over the world.

If you have ever worked for a global company, you are aware of the evolution of the procurement department as a strategic arm of large corporations pursuing efficiencies, process innovation, effectiveness and leverage.  Procurement specialists can find gaping opportunities to improve the deals between the company and the advertising agencies it hires to spend billions in advertising dollars, tradition, digital and social media.  AAAA’s wanted to rush guidelines to the market which is an indication of the problem.  The type of business model innovation that the advertisers seeks will require myriad approaches that a recent McKinsey article described as “reframing beliefs.(McKinsey)”   

Big corporations have resolved similar issues in supply chain transparency issuesHBR-The Transparent Supply Chain.  The HBR article published in 2010 illuminates how complicated, “opaque”, issues can get when their are multiple stakeholders who have differing views on transparency.  Like in the case of Ad agencies handling of billions of dollars in clients’ money and whether shifts in technology and global deal making are just smart or whether words like “murky” and “opaque” seem to be the only descriptives that can explain lists of transactions that should have been disclosed and possibly shared in the spirit of fairness, ethics, GAAP and IFRS, barter, and revenue consideration.  For those individuals who try to isolate the discussion to only US transactions, those may be the very people to investigate first because this is clearly a global discussion.

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The Pope came to NYC

Hats off to the NYPD for making the Pope’s trip to Central Park and other iconic venues an easy day.  I saw the Pope from afar and it was a thrill.  The crowds Roared as he moved through a gated path for 80,000 ticket holders granted access to Central Park.  We live in a world of security and it was obvious that every venue was well thought out.  I had long lenses and GoPro, but still only captured the excitement and security surrounding the event.  At 10:30, the park was in tear down mode.  I took a walk along the Pope’s path and you could still get an adrenaline rush from what had happened.  It is the gift of being a New Yorker.  The largest stage in the world.  

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Blog_Cover_WhiteboardWhether B2B or B2C, sales management commands salespeople or business development people to think-outside-the-box to create incremental or new sources of revenue. Contemporary thinking has replaced “OOTB” with innovation. Sales managers are right to point towards innovation to create “new business” and salespeople are appropriately asking for more specific guidance or at least resources to “mine those hills.” Local newspapers, radio stations, TV stations, local cable/telco/DBS who depend on advertising for revenue know that account attrition is inevitable, downward rate pressure is the norm so what do the innovators do to create a steady stream incremental revenue? Here are the 5 Top trends for local sellers to build new revenue channels:
1) re-invent remnant inventory marketing
2) out-source targeted business development in order to creat a fresh approach to closing “zero share accounts and categories.
3) Co-invest with new platform developers to help leverage complementary skills-mobile, Apps, video.
4) develop better data mining capabilities
5) Measure total market advertising expenditures and then invest dedicated resources to build new revenue strategies by providing new solutions for new customers.
Homework: ad links for the following to add context and substance<!-

TV anywhere
Live plus seven
Dynamic ad insertion
TV Video remnant to online/mobile video market

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How many years has your company been selling advertising? Can you see with confidence why the company will make its plan, or worse, miss? Here are 5 tips that will help you sleep at night:
1) Datawarehouse:
2) CRM
3) Knowledge Management
4) Competitive sales coverage analysis
5) Short list of KPI’S that tie to compensation

These are simple, cost effective, and available from several established vendors. So why are so many CEO’s bewildered or fired because they could not articulate what is going well pot not so well? In many cases, these individual categories fall under the wrong departments or sponsors don’t want to risk internal conflict over tedious work or the commitment is pushed aside for other projects. All five strategies are not required all at once. They are not in a prioritized order, but they are all capable of creating non-linear revenue and profit growth. Not this year or next year. Every year! As an illustration, draw a sketch of the perfect sale in your company. Give some quick definition to “perfect” and make a short list. What happened?
1) Landed a “whale” defined as big advertiser who was new to your company.
2) The client purchased a long term campaign using multiple components found in the proposal.
3) The deal was big enough to include C-level decision-makers at the client.
4) after the initial presentation, the client suggested working teams from both sides to help sellers better understand client’s brand and its customers.
5) the spirit of the relationship hit such important issues to the client , other marketing projects were opened up separately as problems that needed to be solved.

Now imagine that your company becomes known for the type of experience described in the “perfect sale.” The CEO naturally wants to know how to scale “the perfect sale.”

You have a company competing for advertising buys daily, weekly all over the market, country, maybe the world. The top five tips listed at the beginning are the foundation of the most productive sales organizations, including advertising sales of both traditional and new media companies. In a series of five blogs following this one, we will dig deeper into each listed tip so you can get a closer look at the power of each component.

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