2012 Global Agency Compensation Survey
Transkript
2012 Global Agency Compensation Survey
2012 Global Agency Compensation Survey R3:JLB May 9, 2012 Survey Method • Online Survey fielded Feb, March 2012 • Survey completed April 2012 – 71 ANA member responses, representing 60 different global companies Respondent Marketing by Country UK 84% China 80% France 79% Canada 78% Germany 74% Brazil 73% Autralia 71% Spain 69% Mexico 68% Italy 66% India 65% Argentina 61% Japan 61% Russia 60% Singapore 59% Netherlands 55% Colombia 51% Philippines 50% S. Africa 49% Source: ANA 2 0 1 2 , Global Agency Compensation Survey Chile Malaysia Venezuela Turkey Peru UAE Ecuador Caribbean Israel Saudi Arabia Syria Morocco Nigeria Kuwait Algeria Libya Angola Iran Egypt 48% 48% 46% 44% 41% 40% 39% 35% 35% 33% 31% 24% 24% 20% 18% 16% 15% 15% 14% Base: 80 Survey Overview “FORM” Source: ANA 2 0 1 2 , Global Agency Compensation Survey vs. “FUNCTION” Survey Overview “FORM” vs. “FUNCTION” Compensation Method Compensation Management Mostly similar to U.S. practices Diverse and Challenging Source: ANA 2 0 1 2 , Global Agency Compensation Survey Creation and Management of Global Advertising Assignments 51% of respondents employ a combination of central, regional and local resources to manage their global advertising assignments. Don't know/ Not sure 4% Combination (central, regional, local) Centrally 20% Regionally 11% 51% Locally 14% Base: 71 Source: ANA 2 0 1 2 , Global Agency Compensation Survey Management of Global Agency Compensation Likewise, about half manage their global agency compensation through a use of central, regional and local resources. Don't know/ Not sure 4% Centrally 24% Combination (central, regional, local) Regionally 9% 48% Locally 15% Base: 71 Source: Global Agency Compensation Survey, ANA 2 0 1 2 Negotiation of Global Agency Compensation Contracts • Majority of respondents involve both Procurement and Marketing in global compensation negotiation - Particularly true of larger marketers Who negotiates global agency compensation, contract Procurement with support of marketing 47% Marketing with support of procurement 28% Marketing 10% Procurement 3% Other 8% Don’t know, not sure 4% Base: 71 Source: ANA 2 0 1 2 , Global Agency Compensation Survey Negotiation of Global Agency Compensation Contracts Company Type Annual Revenue (US) Annual Ad Budget (US) B-to-C B-to-B & B-to-C < $10B > $10B < $100M > $100M 39% 50% 63% 44% 58% 32% 67% 28% 39% 25% 25% 11% 32% 21% 23% Marketing 10% 15% 7% 0% 22% 0% 21% 0% Procurement 3% 0% 4% 6% 6% 3% 5% 3% Other 8% 8% 14% 6% 17% 7% 21% 7% Don’t know/Not sure 4% 0% 0% 0% 0% 0% 0% 0% Total Sample B-to-B Procurement w/support of marketing 47% Marketing w/support of procurement Note: the subgroup average may not equal the total sample average because not all respondents shared their firmographic information. Base: 71 Source: ANA 2 0 1 2 , Global Agency Compensation Survey Primary Method of Global Agency Compensation • Fees are dominant form of global agency compensation, but significant use of both fees and commissions Method of global agency compensation Fees (fixed or labor-based) 57% Combination of fees, commissions 37% Value-based compensation 4% Sales commission 2% Media commission (fixed or sliding scale) 0% Base: 70 Source: ANA 2 0 1 2 , Global Agency Compensation Survey Primary Method of Global Agency Compensation • Global use of both fees/commissions much higher than U.S. -- likely driven by markets like Brazil, Japan where commissions are still the dominant practice and by smaller spend markets where agency activity is more highly uncertain, variable • Sales commission method used much less globally Method of global agency compensation Global Survey 2012 U.S. Survey 2010 Fees (fixed or labor-based) 57% 75% Combination of fees, commissions 37% 6% Value-based compensation 4% 0% Sales commission 2% 15% Media commission (fixed or sliding scale) 0% 3% Base: 70 Sources: ANA 2 0 1 2 , Global Agency Compensation Survey; ANA 2 0 1 0 Trends in Agency Compensation Survey Primary Method of Global Agency Compensation Company Type B-to-C < $10B > $10B < $100M > $100M 77% 64% 38% 61% 58% 68% 57% 37% 23% 29% 50% 28% 36% 32% 33% 4% 2% 0% 4% 13% 11% 3% 0% 7% 0% 4% 0% 0% 3% 0% 3% 0% 0% 0% 0% 0% 0% 0% 0% B-to-B Fees (fixed or labor-based) 57% Combination of fees & commissions sliding scale) Annual Ad Budget (US) B-to-B & B-to-C Total Sample Value-based Sales commission Media commission (fixed or Annual Revenue (US) Note: the subgroup average may not equal the total sample average because not all respondents shared their firmographic information. Base: 70 Source: ANA 2 0 1 2 , Global Agency Compensation Survey Negotiation of Global Agency Fees Don't Know/ Not sure 5% 44% negotiate centrally, 51% locally or regionally Locally 30% Centrally 44% Regionally 21% Base: 66 Source: ANA 2 0 1 2 , Global Agency Compensation Survey Dealing with the “Exceptions” (e.g., Brazil or Japan) It is negotiated as local agreements between the client and agency 27% 33% It is negotiated with the agency as separate agreements to the global contract It is left to the agency to work out with its local offices 22% 18% Don’t know/not sure Base: 67 Source: ANA 2 0 1 2 , Global Agency Compensation Survey Staff, Fee Detail Provided by Global Agency 88% Most respondents obtain detailed agency staff and cost information – and it is mostly gathered from local level up 65% 60% 8% Hours or FTEs Labor & overhead cost Base: 65 Source: ANA 2 0 1 2 , Global Agency Compensation Survey Profit Other Organization of Cost Detail 51% 62% 46% 18% Locally only Regionally only 22% 24% 27% 15% Hours or FTE's Labor & overhead cost breakout Bases: Hours or FTEs (55), Labor & overhead costs (41), Profit (39) Source: ANA 2 0 1 2 , Global Agency Compensation Survey 36% Profit Globally only Review and Reconciliation of Agency Staff Time and Costs Don't know/ Don’t review, Not reconcile sure 13% 5% On an as-needed basis 24% Base: 63 Source: ANA 2 0 1 2 , Global Agency Compensation Survey Annually 19% Bi-annually, 6% Quarterly 33% 58% review, reconcile global agency fees on annual or more frequent basis How Agency Staff Time and Costs are Reviewed Don't know/ Not sure, 4% Almost half review agency time and costs on a local basis Globally 19% Locally 46% Base: 52 Source: ANA 2 0 1 2 , Global Agency Compensation Survey Regionally 31% 4 9 % Use Incentives • Similar to U.S. survey, almost half of respondents are employing performance incentives - Use skews to consumer marketers and larger spenders Incentives Part of Agency Compensation Agreement Global Survey 2012 U.S. Survey 2010 Yes 49% 46% No 39% 54% Don’t know/not sure 12% n.a. Base: 67 Sources: ANA 2 0 1 2 , Global Agency Compensation Survey; ANA 2 0 1 0 Trends in Agency Compensation Survey 4 9 % Use Incentives Company Type Annual Revenue (US) Annual Ad Budget (US) Total Sample B-to-B B-to-C Equal combo < $10B > $10B < $100M > $100M Yes 49% 38% 68% 38% 44% 68% 26% 80% No 39% 54% 25% 50% 50% 29% 63% 20% Don’t know/Not sure 12% 8% 7% 13% 6% 3% 11% 0% Note: the subgroup average may not equal the total sample average because not all respondents shared their firmographic information. Base: 67 Source: ANA 2 0 1 2 , Global Agency Compensation Survey 5 2 % Use Global Metrics Over half establish agency incentives at the global level; a third do it locally Locally 33% Regionally 15% Base: 33 Source: ANA 2 0 1 2 , Global Agency Compensation Survey Globally 52% Incentive Metrics and Compensation Similar to the U.S. survey, about 2/3 of respondents tie their global incentives to both company and agency performance 2012 (Global) 2010 (U.S. Only) 16% 3% 3% 2% 30% 16% 66% 64% Both company and agency performance Company performance only Sources: ANA 2 0 1 2 , Global Agency Compensation Survey; ANA 2 0 1 0 Trends in Agency Compensation Survey Agency performance only Don't know/Not sure Bases: 2010 (35), 2012 (33) Incentive Metrics, Criteria • Over 80% of respondents use agency performance reviews as key component of agency incentive plan – Similar to U.S. survey • Global marketers more local to employ media performance, brand/ad awareness, brand perception, copy test, and digital metrics than in U.S. - And more likely to use market share vs. sales goals Source: ANA 2 0 1 2 , Global Agency Compensation Survey Incentive Metrics, Criteria Agency performance reviews 81% Media performance goals 53% Brand/ad awareness 47% Sales goals 47% Other criteria 44% Brand perceptions 44% Market share goals 44% Copy test results 41% Digital/online communications goals 31% Profit goals Don’t know/Not sure Base: 32 Source: ANA 2 0 1 2 , Global Agency Compensation Survey 13% 3% Incentive Metrics, Criteria 81% 78% Agency performance reviews Media performance goals 53% 21% Brand/ad awareness 31% 47% Sales goals Other criteria 28% Market share goals 34% Copy test results Profit goals Bases: 2010 (35), 2012 (32) Source: ANA 2 0 1 2 , Global Agency Compensation Survey 28% 31% 7% 13% 72% 44% 13% Brand perceptions Digital/online communications goals 47% 22% 44% 44% 41% 2012 (Global) 2010 (U.S. only) 6 6 % Pay Agencies Locally Most respondents handle agency bill-pay at the local level, likely for tax and internal budgeting reasons Annual Revenue (US) Company Type Annual Ad Budget (US) Total Sample B-to-B B-to-C Equal combo < $10B > $10B < $100M > $100M Globally 9% 15% 11% 0% 11% 7% 21% 3% Regionally 23% 23% 25% 13% 33% 16% 16% 20% Locally 66% 62% 64% 81% 56% 74% 63% 77% Don’t know/Not sure 2% 0% 0% 6% 0% 3% 0% 0% Note: the subgroup average may not equal the total sample average because not all respondents shared their firmographic information. Base: 65 Source: ANA 2 0 1 2 , Global Agency Compensation Survey Majority Plan to Change Compensation Agreements No, we do not plan on significantly changing your global agency compensation agreement(s). 35% Yes, we plan to reduce/restructure global agency compensation. 27% Yes, we plan on including performance incentives. 24% Yes, we plan to consolidate/centralize our global agency compensation methodology. 19% 16% Don't know/Not sure Base: 63 Source: ANA 2 0 1 2 , Global Agency Compensation Survey Global Agency Compensation Challenges The respondents noted a number of challenges to effectively structuring and managing their global agency compensation. The more common themes included: Aligning on goals, strategies “Making sure the local and global marketing groups are in alignment.” Source: ANA 2 0 1 2 , Global Agency Compensation Survey “Marrying client operating structures to multiple agency structures to best support the business.” Global Agency Compensation Challenges “Difficulty aligning the level of compensation – incorporating nuances by countries/local markets.” “Dealing with differences in needs and staffing at the local level, which varies from country to country and year to year.” Global scope of work and fee planning/management “Getting scope verified with regional/local markets and then working with business needs and budgets.” Source: ANA 2 0 1 2 , Global Agency Compensation Survey “Marketing reporting structure not aligned to maintain/enforce markets.” Global Agency Compensation Challenges “Staying abreast of rates in all the local markets” “Addressing local tax treatment, billing, country allocations.” Dealing with “Local”: practices, cost differences, desire for local control “Local markets feeling they are paying too much for a large, globally-networked agency.” Source: ANA 2 0 1 2 , Global Agency Compensation Survey “Local mentality of marketers; an ‘I know what is best’ mentality”. Global Agency Compensation Challenges “Ensuring we create the right balance between performance-based compensation and account attractiveness in difficult market conditions” “Need a clear measurement method to evaluate the performance of agencies” Structuring Pay for Performance “Using multiple agencies in the same market and isolating the specific agency’s performance” Source: ANA 2 0 1 2 , Global Agency Compensation Survey Summary and Best Practice Fees here to stay Innovate Quarterly Reviews Reconcile 49% incentives Accountability Change is coming Plan Ahead Source: ANA 2 0 1 2 , Global Agency Compensation Survey Questions, Discussion • If your questions are not answered today, please follow up with: - Your ANA rep - David Beals, david.beals@rthree.com - Greg Paull, greg@rthree.com Source: ANA 2 0 1 2 , Global Agency Compensation Survey Need More Insight? ANA members can access the full Global Agency Compensation Survey Findings! Visit www.ana.net/mkc or email jgirmscheid@ana.net 2012 Global Agency Compensation Survey R3:JLB May 9, 2012