Blow up the Back Room

As we continue our discussion of the top ten ways marketing will be transformed, I am compelled to focus on an area that many feel is unglamorous, uncreative and – regrettably – unimportant. I’m talking about the systems, processes and administrative functions that are collectively and, I might add, often disparagingly referred to as “the back room.”

Well it turns out the “back room” is actually extremely important to the “front office.” Its functions and responsibilities can potentially add huge value to the marketing process while, at the same time, saving millions of dollars and thousands of hours. New approaches and new technologies are transforming every other aspect of the marketing process. So too will they reinvent the role of the back office.

Let’s start off with some definitions and foundations. The “marketing supply chain” is the continuum that starts with the development of marketing strategy, spans into the creative, evolves into the execution, is distributed to the media and ultimately shown to the public. Yes, that’s a very simplistic overview, but I think it conveys the concept.

So what do I mean when I say the “back room”? I’m speaking largely about the management of advertising assets, including the processes for “manufacturing” ads, trafficking them through the agencies to the media, as well as billing and paying for all services rendered. Kind of grimy stuff, eh?

This is a highly complex and complicated arena. So let me focus on a couple of key projects and areas of opportunity:

First, e-Biz for Media. The AAAA has been the focal point for managing this critical project. The overall purpose of E-Biz is to reduce the paperwork involved in media transactions and to foster complete two-way electronic communications. The goal is not to foster online negotiations, but to simplify and “digitize” the transaction process at the back end of the supply chain. By so doing, the supply chain’s cumbersome paper and people processes are streamlined with costs reduced and management oversight substantially diminished. The overall marketing business system will become far more efficient and capable once this takes hold. Although this project has taken far too long to execute, we are at the threshold for realizing its benefits soon.

Next up – Ad ID. Ad ID is an immensely important initiative that can transform the business system. Ad ID stands for advertising digital identification, and its implementation can help companies become lean by improving efficiency and decreasing waste. Created and managed by the AAAA and the ANA, Ad-ID is a universal identification standard for the advertising and marketing industries.

Similar to the barcode system employed by retail outlets, Ad-ID identifies each and every advertising asset a company creates. It is the “alphabet” that allows marketers, agencies and the media to speak a common language. Importantly, it is also the foundation of electronic systems that enable all kinds of automation – from buying, selling and invoicing media to trafficking and tracking advertisements across all platforms.

Scott Berg, Director of Global Media at Hewlett-Packard Company, explains it this way: “Ad-ID eliminates inefficiencies and creates a consistent ID across the globe…it makes tracking creatives quick and easy.” Jim Zambito, Executive Director, Agency Relations, Johnson & Johnson, adds this perspective: “Ad-ID promotes lean Six Sigma principles by linking the marketing supply chain. Digitizing the media transaction process will create process improvements and cost savings for the advertisers, the agencies and the media.”

If those endorsements aren’t enough, here are ten huge benefits of Ad-ID. It will:

1. Promote accountability and reduce inefficiency and waste

2. Encourage lean thinking

3. Centralize advertising asset management

4. Create a universal coding standard for all advertising assets

5. Provide a common language for advertisers, agencies and the media

6. Bring accuracy and efficiency to the ad processes

7. Foster the electronic media transaction process

8. Be the foundation for buying/selling/invoicing media electronically

9. Be the base for digital trafficking/tracking

10. Provide 24/7 online access to global asset information via the Web for authorized users

Frankly, I can’t imagine why any advertiser would hesitate to embrace Ad-ID and its enormous potential to streamline the entire marketing process.

OK, now let’s talk about another aspect of the back office – one that causes many marketers and agencies to “cringe” – procurement! Not surprisingly, an ANA survey revealed marketers’ strong resistance to procurement’s involvement in the marketing process. Here’s how one respondent expressed it: “Frankly, we see them as an obstacle.”

There are several reasons why procurement is important. For one, the CEO wants them to be involved in the marketing process. In fact, procurement is likely to grow in importance in the coming years. Second, procurement officers have a legitimate expertise in purchasing products and services and containing costs. Working with them – instead of against them – can be remarkably beneficial. And third, allowing procurement to do its job relieves marketers of administrative duties, freeing them to devote more time to their primary responsibility – brand building.

At Nationwide Insurance, the marketing and procurement departments have effectively teamed to drive economic efficiencies, better supplier relationships and a strategic, collaborative partnership. Nationwide is a company with a collaborative culture – so that helped a lot. So did the strong support exhibited by senior management, as well as the bottom line orientation that permeates the company’s business units. And it didn’t hurt that the company was substantially increasing its ad spend – so everyone wanted to make sure the larger investment was managed optimally. Nevertheless, the results are stunning.

In two years of Nationwide’s marketing-procurement partnership, the company captured over $12 million in hard dollar efficiencies and improved the cost efficiency of its television advertising by 39 percent.

Anyone doubting the contribution that procurement can make to the marketing process, take note! Those kinds of results demonstrate that the back office can make a huge impact on the bottom line. And that, my friends, gets the attention and the respect of the CEO!

So as we look at all the ways marketing is being reinvented for the better, let’s not overlook the importance of the “back office” functions. I’ve titled this blog post, “blowing up the back room,” which, I admit, sounds a bit extreme. However, what we are trying to do is to blow up the antiquated notions that so many people have about the back office functions. As Nationwide and other have proven, the back room can deliver big results!

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