Overview
Our theme, based on value creation by challenging the billing-by-hours norm, was endorsed by the extraordinary value our guest speakers bought to this enlightening summit.
Michael Farmer is the esteemed author of Madison Avenue Manslaughter, An Inside View of Fee-Cutting Clients, Profit-Hungry Owners and Declining Agencies, and winner of four Publisher's Awards for the best Marketing / Advertising book of 2016 / 2017.
He is also CEO of Farmer & Company, the acknowledged expert on Scope of Work (SOW) management problems and other strategic issues that affect agency creative and financial performance.
Michael empowered us with a formula to argue the case for billing based on the actual scope of work and not by the hourly charges which can often lead to reduced margins and increased overheads particularly in labour terms.
“Workloads are out of control, since most agencies do not document, track, or negotiate workloads for fee-setting purposes. Instead, they accept whatever work their clients thrust upon them and live with the outcome”.
The combination of declining fees and growing workloads puts agency creatives and other people under an enormous strain.
Agencies are being forced to create profit by downsizing, salary freezes and 'juniorizing.'
Relationships have shortened considerably, as clients now shop around for low-priced agencies, viewing their agencies as "commodity suppliers of commodity-like deliverables that are paid at commodity-like rates."
Washington
“Time is money. Make your business work harder.”
Or put another way, time is not enough money - a new business model is required.
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Ron Baker is the founder of VeraSage Institute and author of six best-selling books, including: Professional’s Guide to Value Pricing and Implementing Value Pricing: A Radical Business Model for Professional Firms.
“The age old practice of billing for time is both unethical and profit robbing!”
“It’s unethical because it misaligns you and client. Your goal now is to bill as many hours as possible at the highest possible rate. This is the exact process that has many firms tracking functions that don’t benefit the client at all and throwing senior people at things they shouldn’t be doing.
It’s profit robbing because you can’t make more hours and you probably deliver far greater value than your hourly thinking allows you to consider. Imagine if premium brands like Apple added up what it ultimately cost them to build an iPad and charged customers - cost plus a 100% markup. We would all own iPads for about $27. Instead Apple charges and receives much more because we value what they do. They don’t obsess over market share, they obsess over profit and value”
Our two hotspot speakers shared their company’s knowledge and expertise across two very different areas.
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Mike Zaneis is the President and CEO of the Trustworthy Accountability Group (TAG).
TAG was created to spur industry-wide improvement at an unprecedented scale, focusing on four core areas: eliminating fraudulent traffic, combating malware, fighting ad-supported Internet piracy to promote brand integrity, and promoting brand safety through greater transparency.
Mike shared how we can assist and advise our digital clients to protect their brands on line. Fake news, scams and ad misplacement are all issues we are aware of but we should be able to offer knowledge, insights and intelligence to our clients and our prospects when devising web based marcomms.
Mike also invited attending members to register for certification at no cost, so we can illustrate to our clients that the content we put online on their behalf is safe and secure.
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Eva Kesten is the CEO of WARC Americas.
WARC.com is an online service offering advertising best practice, evidence and insights from the world’s leading brands. WARC helps clients to grow their businesses by using proven approaches to maximise advertising effectiveness.
Eva outlined the new partnership strategy between our two organisations, sharing with us exclusive member benefits and details on how our Globes programme has, with their assistance, become one of the top award programmes in the world.