What The Marcomms Industry can Learn from Facebook
I don’t know if you saw it, but I am guessing someone in your agency did. Last week, Facebook released the “Off-Facebook” feature. Simply put, this new feature allows you to delve a little deeper into understanding what and how Facebook collects data about you – be it from your activity on their assets (Facebook, Instagram, WhatsApp etc., or from interactions with third parties. This data is then used to improve the ads that it serves you. With Off-Facebook, the intent is to add a new layer of transparency to you, Facebook’s customers, to give insight into what they are collecting or from where.
Trying not to be sceptical, this is a long-overdue feature that Facebook should have introduced years ago. After all, whilst it has great value to you, the end-user, rest assured it will have infinite use, and in its own way, provide a bevy of further data to Facebook. Whether it is helping them understand what personality types are interested in the process of data collection, who takes action, or what apps are most disconnected from Facebook to understanding who does nothing, the data will have value for the ongoing platform and advertising implementations.
All interesting developments, but that is not what this is about. No, in discussing this development internally, our team realised two key things:
- Transparency has become an ongoing expectation of consumers; and
- Transparency can add value to the bottom line – for both the organisation providing it and the recipient of it.
Agency Transparency – Adding value to your customers
In June last year, International marketing site The Drum published a piece focussed on the importance of boosting transparency in the Advertising Industry. The article impressed on the reader that lack of transparency would ultimately damage the industry, and thus it encouraged agencies to improve how and what they communicate to clients.
As a result of digging a little deeper into this topic, we found numerous articles on the topic of improved transparency within the industry, ranging from improvements in passing on information on third party costs, to details on programmatic buying for digital media, and so forth. From our vantage point – which is somewhat more on the sidelines, than the firing line – the crux of the issue comes down to one thing; clients demand and deserve improved information when it comes to understanding how their marcomms budget is being spent. That’s where we come in.
A new way of doing things
It may seem on the surface that transparency may spell doom and gloom for the industry, that giving information to the customer could, in fact, lead to diminished margins, unrealistic expectations and narrow profits. But it doesn’t have to be this way. Coming back to the Off-Facebook function we mentioned above, the feature at its heart gives more information to the user, but it also, gives a treasure trove of insight to Facebook itself, insights which can be leveraged to improve.
In this same vein, a greater understanding of your own costs, or more granular detail on activities undertaken by the agency has the potential to greatly transform your business for the good. Now, we are going to assume that you are using Pegasus as your agency’s financial platform – if you are not, then maybe it is time you read more about our features and see why you should – which will give you some of the insights we mentioned below.
At your fingertips, you have a platform which allows you to generate reports which shed insight into head hours, third party costs, overheads, expenses, project profitability, production costs and so much more. Whilst in the past you may have generated reports at a Macro (whole-of-agency) level to understand whether your staffing ratios are correct, if you are making enough of a mark-up on third party costs, or are undercharging a specific department, now, in analysing the financial performance of each client in your stable one by one, you will likely uncover a new cache of valuable business insight. We’re talking:
- Is a specific client absorbing a disproportionate amount of account service time thereby reducing margins?
- By aggregating data for the multiple clients, your service in one industry, you will be able to see which industry is more profitable and/or delve into understanding the why of it?
- Do you have one client who is so profitable that they need to be emulated?
- Is it time to look at price changes for certain departments or job functions based on the type of work done?
- Is there an agency(s) employee who is billing an inordinate amount of time against a client and is there a justification for it? Do they do this against multiple clients?
Great insight can improve profits
The greatest thing about data analysis and transparency is that it is not necessarily about ceding control, nor a path to financial ruin. By understanding more about your own clients and what value they are deriving for, or draining from your business, you can make necessary adjustments proactively. Improvements can then be passed onto your clients in such a way that it actually adds more value to their business. Imagine if you could explain to one client on retainer that you are reducing their monthly retainer by $X as you have found it can be just as efficient to have 3 people on the account as 4, and you can then reallocate that internal resource to another client, explaining that in doing so, you are able to add extra value to them in the form of more strategy/planning/etc.
And ultimately, that is what it needs to be about – adding value and looking after your clients. As Bob Hooey once said, “If you are not taking care of your customers, your competitor will.” If that is not inspiration enough to do something that little bit extra, we don’t know what is.
If you would like to discuss with us how we can add that extra value to your business and help you to help your clients, then let’s have a chat, get in touch with us today.