This WFA webinar in partnership with SPIRE helps procurement and marketing understand: - How the top performers set themselves up for success; - What entry level/advanced characteristics are displayed by best-in-class organisations; - Drivers to help procurement further integrate with marketing; - How to diagnose the capabilities and set up action plans to improve your performance.

1. Marketing activity efficiency
and effectiveness
Understanding procurement maturity and
organisational structure
The 2012 WFA SPIRE Diagnostic Webinar
World Federation of Advertisers SPIRE
Steve Lightfoot Paul Duxbury
Tel. +32 (2) 506 4390 Tel. +44 (0)207 297 2221
s.lightfoot@wfanet.org paul.duxbury@spire-ww.com
www.wfanet.org www.spire-ww.com

2. Introductions
• The World Federation of Advertisers
– The only global organization representing the common interests
of marketers
– Members represent ~90% of global marketing communications
spend, almost US$ 700 billion annually
– Champions responsible and effective marketing communications
• SPIRE
– Marketing capability building consultancy
– Works with multinational organisations: Arla, Novartis, Shell,
SABMiller, Universal Studios
– Partners of the WFA since 2009
www.spire-ww.com 2

3. Today’s Agenda
1. How the top performers set themselves up for
success
2. What entry level/advanced characteristics are
displayed by best-in-class organisations
3. Drivers to help procurement further integrate
with marketing
4. How to diagnose the capabilities and set up
action plans to improve your performance
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4. 1. How the top performers set themselves up for
success….
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5. Combination of ROI, outcome and input focused evaluation
Marketers have ROI “Now that there is an accepted mandate to understand
Source: Millward Brown
focused post and measure the financial impact of marketing, it’s time to 2008
evaluation… take a more disciplined approach”
…and outcome focused Source:
post evaluation… www.effieindex.com
Self assessment of approach to effectiveness and efficiency
…and now an input
of marketing activities, to drive discussion and alignment Source: WFA SPIRE
focused evaluation Diagnostic Tool
across the marketing team and support the building of
tool.
world class capabilities
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6. Building understanding and alignment, before
starting to build capabilities
• Understanding the effectiveness and efficiency landscape
– Putting common terms and parameters around a previously
uncharted territory
• Understanding how well the organisation performs for
key effectiveness and efficiency themes
– Areas of good performance, the size and location of gaps and
areas of misalignment
• Understanding how well prepared the business is for
capability building
– And where improvements may be required as, or before
capabilities are built
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8. 2. The entry level and advanced characteristics
displayed by best-in-class organisations…
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9. 45+ Phase One benchmark companies
Annual marketing budgets worth an estimated $60+ billion
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10. Overall performance for all themes of
effectiveness & efficiency
Overall performance for all themes of effectiveness &
efficiency
48
Average # of ‘good’ & ‘excellent’ responses
46
2010 2012
Source: WFA SPIRE 2010 survey and 2012 Diagnostic Tool
Base: all respondents 10

11. 2012 performance by quartile
2012 performance by quartile
82
Average % of ‘good’ & ‘excellent’ responses per
56
company
37
12
Lower quartile Lower-mid quartile Upper-mid quartile Upper quartile
Organisations are grouped into quartiles, based on their overall performance across the 4 themes of
effectiveness and efficiency, with each quartile representing ~25% of the total respondents
Source: WFA SPIRE 2012 Diagnostic Tool
Base: all respondents 11

12. 2012 performance by effectiveness and
efficiency theme
89 89
Proportion of ‘good’ & ‘excellent’ responses per
78
72
All
57 57
Respondents
respondent
39 38 Upper
Quartile
Managing money tightly Identifying & working Using integrated and Establishing structured
and adopting more cost- with the best streamlined approaches mechanisms for
efficient ways of working agencies/suppliers to manage activities continuous improvement
Source: WFA SPIRE 2012 Diagnostic Tool
Base: all respondents
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13. At a company level, the gap between the performance of the
most and least advanced organisations is getting wider
Performance by quartile
• Organisations were grouped into
quartiles, based on their overall ratings across
all drivers of marketing activity effectiveness
and efficiency
• On average the ratings for the top 25% of
organisations are more than 6 times greater
than the bottom 25%
Widening gap between top and bottom
• The theme ratings of the top three quartiles
increased by between 3 and 6 points from 2010
to 2012
• Over the same period the theme ratings for the
lowest quartile fell by 8 points, increasing the
gap between organisations with the most and
least well developed capabilities
Should the most advanced organisations help the weakest develop their capabilities and how could that
be done?
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14. The most advanced organisations have made the greatest
progress with their approach to the management of agency
partners
Change in upper quartile capabilities by
theme
• From 2010 to 2012 there were increases in
capability for two of the themes of marketing
activity effectiveness and efficiency
• The most significant change was an increase in
capabilities to identify and work with the best
agencies and suppliers
2012 upper quartile capabilities by driver
• All capability drivers were rated at 80 or more
in 2012
• With near maximum performance across 3 of
the 5 drivers that were identified as of primary
importance to increasing marketing activity
effectiveness and efficiency
Are the agency management capabilities of upper quartile organisations approaching a point of marginal
return and is there more upside to be gained in other capability building areas?
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15. The least advanced organisations have lost ground both in
managing money tightly and working with agencies
Change in lower quartile capabilities by theme
• From 2010 to 2012 there were significant
declines in capability for two of the themes of
marketing activity effectiveness and efficiency
• For the other two themes there was no
significant change
Lower quartile performance by driver relative
to the upper quartile (for the managing
money tightly theme)
• For most of the drivers of managing money
tightly, the capabilities of the lower quartile fell
whilst those of the upper quartile
increased, creating a widening gap
• The same trend, albeit less pronounced was
seen within the agency management theme
For additional driver analysis refer to appendix 14
Have there been changes to the external operating environment that made it even harder for the least
capable organisations to perform well e.g. complexity from increased digital marketing spend?
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16. Some of the capabilities considered to be most important*
have increased whilst others have declined
Drivers of primary importance for which
capabilities have increased
• The biggest increases have been for capability
drivers within the agency management theme
• Within the integrated and streamlined process
theme there have been no capability increases
for the drivers of primary importance
Drivers of primary importance for which
capabilities have fallen
• There have been falls in capability drivers
within both the agency management and
managing money tightly themes
• As well as a significant decline in the linkage of
activity to overall strategy
* The ‘most important’ drivers were identified by
respondents to the 2010 survey
Is there an issue with the prioritisation of capability building efforts, or with premature assumptions that
drivers are ‘fixed’?
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17. The capabilities that are hardest to build and sustain remain
the least well developed across the board
Overall capabilities for each theme
• The two ‘traditional’ or ‘foundational’ themes
of marketing activity effectiveness and
efficiency have equally high levels across all
companies
• The ‘process’ and ‘learning’ capability themes
lag behind with levels nearly 20 points lower
Performance trends
• Compared to 2010, the capability levels for the
‘process’ and ‘learning’ themes fell in 2012
• This further increased the gap between these
drivers and the ’traditional’ themes
Are organisations falling into the trap of prioritising the less challenging areas for improvement, rather
focusing on the areas of greatest upside, despite the difficulty levels?
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19. 3. Drivers to help procurement further integrate
with marketing…
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23. Cross functional working and centralised sourcing strongly
correlate with advanced effectiveness and efficiency
capabilities
Strong linkage between cross functional
working and capabilities
• Organisations in the upper quartile of
effectiveness and efficiency capabilities have a
much stronger culture of cross functional in
and around the marketing team
• This is seen at all stages of the planning
cycle, from goal setting to post-evaluation
The best performers source more centrally
• In nearly all spend categories the organisations
with the strongest effectiveness and efficiency
capabilities source more centrally
• The smallest gap between upper quartile and
all respondent performance is for media and
the greatest is for digital
For all spend categories refer to appendix 15
Should these organisational areas be developed in parallel with capability building, or are they a pre-
requisite?
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25. The tenure of the sourcing team and integration with the marketing
planning process strongly correlates with advanced effectiveness and
efficiency capabilities
Tenure of the marketing sourcing team
• The marketing sourcing teams of upper
quartile companies have spent significantly
longer influencing spend than the average for
all companies
• 40% of upper quartile companies have had
marketing sourcing teams in place for more
than 10 years
Integration of sourcing in planning
• In upper quartile companies marketing
sourcing is consistently more involved in the
planning process
• Although levels of involvement reduce when it
comes to the development of individual
activities and activity evaluation
Do the marketing team recognise the role that sourcing can play, and are sourcing teams fully describing
the commercial benefits they bring?
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28. 4. How to diagnose the capabilities and set up
action plans to improve your performance…
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29. Two levels of diagnosis
Initial overview of effectiveness & efficiency ratings
1 marketing
respondent
15 minute on- 1 hour
line survey 1 sourcing presentation
respondent
In depth review of effectiveness & efficiency ratings & planning sessions
~10 marketing
respondents Presentation
Outline capability
building plan
~10 sourcing
15 minute on-line Facilitated
respondents
survey workshop
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30. How increasing responses can drive complexity
Example data for Org Z
100%
90%
Proportion of ‘good’ or ‘excellent’ responses
80%
70%
60%
50%
40%
30%
20%
10%
0%
Ratings from respondents in a range of locations, marketing and related functions
Source: WFA SPIRE 2012 Diagnostic Tool
Base: all respondents
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32. To participate please access the WFA SPIRE
Diagnostic survey link:
http://www.surveygizmo.com/s3/942382/WFA-SPIRE-
DIAGNOSTIC-TOOL
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33. Looking forward : continuous development of
the Diagnostic Tool
• Extending the respondent base
– Target of 100 companies by end 2012
• Completing in-depth company specific reviews
– Usually for 10-20 same company respondents
– With follow up capability planning sessions
• Increasing depth of organisational factor analysis and
actionability of findings
– Ready for 2013 diagnostic cycle
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34. For more information, please
contact:
World Federation of Advertisers SPIRE
Steve Lightfoot Paul Duxbury
Tel. +32 (2) 506 4390 Tel. +44 (0)207 297 2213
s.lightfoot@wfanet.org paul.duxbury@spire-ww.com
www.wfanet.org www.spire-ww.com