citizenbay

Same as it ever was? An interview with Michael Baker of dataxū on Big Data

Big Data. Aren't you just tired of hearing these two words? There seems to be 'Big Data' panels here, VP of Big Data there, and an Integrated Holistic Big Data Strategy hiding round the corner ready to pounce on you.

All it means is we have a lot of data. So much that us mere mortals cannot cope with it. Hence the need for  supersmart folk armed with complicated (and not so complicated) algorithms to help us make sense of it all.

However, as the great David Byrne once said...

same as it ever was, same as it ever was, same as it ever was

No matter how much information has existed, we have always struggled to cope, struggled to make sense of it all, struggled to find the right insight and struggled to act upon it.  It's just that we now have that much more. So our coping genes are hopelessly frayed.

Yet what is it about Big Data that we struggle with? Are we simply overloaded? Or is it the search for meaning from the mountains of 0s and 1s that threatens to engulf us? Or could it be search for someone to trust to help us make sense of the data?

Make no mistake about it. Companies who can help brands make sense of the torrential downpour of data will be incredibly successful in the near future. Some will help simplify the data, taking some stress away from clients. The work of visualisation specialists will become even more Others will seek meaning from the data to help improve a brand's short to long term decision making.

Media Agencies have for years been well placed to make sense of data on human behaviour and on the brand. So surely they are the first port of call for brands to help them?

Not so, according to Michael Baker. The founder of dataxū believes that the media agencies have neither the tools nor the talent to provide the expertise that brands need. In a world where people live at the 'speed of life', he posits that media agencies are not built to take action or proffer advice to clients under such circumstances.

I interviewed Michael at the 2013 Festival of Media Global. We talked at length about his belief in the power of data to assist businesses and about his view that brands will be shifting to a more data driven approach to marketing. For him, the future is quantitative.

However, he doesn't believe that such a future is soulless. The fear/hate/loathing for quantitative analysis is based, according to Michael, in part on an assumption that creativity and data analytics are two separate entities. He forcefully challenges such a separation, encouraging the industry to bring them closer together.

Michael is a passionate advocate for the value of smart data analytics as comes out in the interview, and one can't argue against the value that data brings to a business.

Whilst a key challenge for data analytics businesses will be to build trust amongst the clients in their systems and their outputs, I have one observation and one question that for me is fundamental to this discussion on Big Data.

Observation: data is all too often used to create marketing that focuses on the MEANS (more impressions, more interaction) not the END (more sales, increased trust). That needs to be challenged continually.

Question: Who watches the watchmen?

Who will be able to assess whether the algorithms and analytical tools are not producing skewed data? I have seen enough 'infallible' tools fall on their proverbial faces, leaving brands to rethink strategies and investments.

Which brings me to Sir John Hegarty. At the inaugural Advertising Week Europe event that took place earlier this year, I listened to a bunch of folk on a panel talking about data, including the co-founder of BBH.

In one single statement, Sir John Hegarty put the Big Data debate into a wider context:

Supermarkets had all the data in the world, but they were still selling horsemeat. Look for the broader view.

Data can help shape that broader view. It can help challenge the status quo. It can help inspire. However, if we do not challenge ourselves to focus on the End rather than the Means, Big Data will just end up fuelling past mistakes, rather than future glories.

 

Nick Vale: Media Agencies need to change...now

 

  

I recently headed off to the Festival of Media Global in Montreux to listen to a wide range of speakers, network and seek out inspiration.

Whilst there, the guys at CSquared kindly allowed me to sneak a few interviews with some of the speakers and delegates.

First up was Nick Vale. Nick is the global planning boss at the WPP media agency Maxus and owner of a magnificent beard. I thought it would be interesting to hear Nick's views on organisational change for media agencies. He holds much hope for the agencies, providing they become leaner and more focused on their strengths. He was less positive about the outlook for the big ad agency however.

I also quizzed him on where the threat to the media agency might come from. It was his response to this question that intrigued me the most. He saw clients being drawn to the boutique agencies that provide a specific service, with the management of this portfolio left - depending on the capabilities & resource - to the client (more on that one another time).

Which leaves the big agency network in a tricky place.

Does the media agency network continue to provide an ever wider patchwork of 'services' (from programme making & content management to product innovation and beyond) or does it focus on 'core strengths' and learn to collaborate with the boutique agencies that Nick speaks about?

Clients are simply not taken in by the promise of the myriad of services from some of the media agencies. After all, many clients still perceive the media agency as 'the guys who buy the ad space'.

So to Nick's valid point about getting leaner, I sense that some agencies (and their owners) will be looking to streamline their service offering by working out what they can do brilliantly and match that with client expectations and needs. Such streamlining though does not mean an inevitable slide back to a focus on 'the buy'. Change means a fresh look at defining what a media agency exists for. As Nick says, agencies could be looking to augment humanity rather than merely thinking about screens.

With regards to collaboration, the media agency has years of working side by side with the other agencies, so they should be in a good place to work with a portfolio of specialist agencies.

However, there is room for improvement. Decades of working with content companies/media owners has led to a skewed working relationship. Ideas generated by the media owner are still passed off by media agencies as their own. Access to clients is carefully guarded by the agency, which at times helps the client, at other times suffocates fresh thinking. Such a waste of what could be incredibly fruitful partnerships.

I would love to hear your views on what Nick had to say.

 Paul

Elegant Business: Pay your agency suppliers in a timely manner

I have been busy shaping up my work on what makes an Elegant Business (which started with my little chat at TEDx Porto on Elegant Business). Basically, a framework to help companies deal with the world they inhabit. A key part of this work is to shape up a variety of metrics to measure the level of Elegance in a Business.

One potential metric is something that reflects the relationship between a business and a supplier. A business could be dealing with lawyers, marketing services agencies, providers of parts or raw materials. The list is endless. So that makes matters a little tricky. How could I measure the Elegance of a Business when it comes to their dealings with different suppliers?

Here is one: the length of payment terms that businesses place on their suppliers. Seems ok to me (let me know what you think). Not a full reflection of the relationship at all, but one piece in the puzzle.

I do find it quite extraordinary that companies (usually large ones) dictate to the providers of goods or services when they will get paid. However it is how it is. And up til recently it was pretty straighforward. Supplier invoices. Client pays in NET30 days.

Now sometimes companies pay later than agreed. Over the (almost) 10 years running citizenbay I have both been a victim and culprit (not by plan, more by incompetence). I have had a couple of non-payers, but the vast majority of my clients have been utterly brilliant, incredibly fair, very elegant in that respect.

However, over the last few years the marketing services industry has seen a clear shift in the payment terms between clients and agencies, with terms of payment lengthening from NET30 days to NET45 days to NET60 days and climbing.

As Debbie Morrison of ISBA UK, in conversation on Twitter with me, said:

we've seen it develop over the last 2/3 yrs, it's led by the very top of co's CEO/board level not proc or marketing initiative.

Proctor & Gamble have announced that they are pushing the payment terms out to 75 days. The Chief Purchasing Officer offers this reasoning:

The working capital program will focus on moving to longer payables with our external business partners.  We completed months of external benchmarking in 2012, and realized that we were out of line compared to our competitive peer companies on payables.

So because others are getting tough, P&G are following suit. (Would be interesting to know how they drew up the benchmark list on that one!)

But according to Rick Hughes, the CPO of P&G,  they have the suppliers' interest at heart:

Our objective is to address this in a phased approach.  Rather than a simple “mandate” which we believe could be punishing for our small/midsize partners, we have developed a solution with pre-selected partner-banks that will enable us to offer a financial product called ‘Supply Chain Financing’ (SCF) that can create a win-win-win for our external partners, P&G, and the banks.  This approach not only will help mitigate some or all of the negative impact on the working capital of our external partners, but in many cases will create value, by enabling access to low cost capital for reinvestment.  

A big company trying to find a solution to help the small company is very laudable. Check out the wonderful Small Business Saturday work of Amex, for example. However, in the solution proposed by P&G, they have partnered up with 'pre-selected partner-banks' to offer a solution. But hold on a minute.

First, the P&G solution is one that aims to solve a problem that P&G have themselves created for their suppliers.

Second, 'pre-selected partner-banks'? Where do you start with that one? Are these 'partner-banks' the same banks who have drained economies of cash, and done little or nothing to support start-ups and small businesses with all that cash that governments had laid at their feet? Now they are going to help out suppliers, while P&G holds on to their cash for a longer time? Hmmmm, not convinced.

Mr Hughes then sums up with this:

This solution demonstrates P&G’s commitment to drive sustainable value through improved productivity for P&G and our business partners.

I have a feeling that some might disagree with that statement.

However, P&G is by no means the worst of the bunch (hence I guess their reference to the benchmarking). We are seeing NET90 days and even NET120 - AB-InBev is reported to have moved to this payment time-frame.

This of course has a wider impact. If the agencies are not getting paid until up to 4 months after invoicing, then spare a thought for their suppliers, especially the freelancers.

In this more fluid and flexible working world, many freelancers, consultants and small businesses can do without having to face even longer delays on payment - the impact on their cashflow will be expontially tough.

Clearly, large companies are making a massive contribution to the economy and they are right to consider all routes to ensure long term success for their business.

However, the marketing services industry also contributes considerably to brand health, and will be ever more important as companies navigate the world. So you would think that the last thing a business would want to do is penalise the very community who can inspire, create and generate incredible long term customer value and trust for businesses. Instead, you would think that companies would want to inspire the marketing services industry even more.

I came across this fascinating little piece on the potential role that the Big 4 Accounting firms are playing in this move to longer payment terms. Aside from walking the walk and moving their own payment terms to longer ones (yeah right), maybe the Big 4 are seeing themselves as the new source of innovative creative thinking for brands. From creative accounting to brand innovation.

I might be wrong. I might be being unfair on big brands, and the piece might have it wrong on the Big 4.  Yet, it does seem that extending the payment terms to suppliers beyond NET30 days to 4 months, seems inelegant to say the least. At worst, it will negatively impact on the long term health of the client's business and that of the agency suppliers.

That's not good business sense for anyone.