MarPro - The Marketing Procurement Podcast

Russel Wohlwerth | Co-author, Buying Less For Less

September 08, 2021 Rusty Pepper & Dana Small & Russel Wohlwerth Episode 8
Russel Wohlwerth | Co-author, Buying Less For Less
MarPro - The Marketing Procurement Podcast
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MarPro - The Marketing Procurement Podcast
Russel Wohlwerth | Co-author, Buying Less For Less
Sep 08, 2021 Episode 8
Rusty Pepper & Dana Small & Russel Wohlwerth

This week on MarPro our guest is Russel Wohlwerth the co-author of "Buying Less For Less" a must-read for all marketing and advertising professionals and for all procurement pros who touch the marketing space!

In addition to being an author, Russel has been advising companies around the world on all aspects of marketing agency supplier management. He is a serial entrepreneur who was an owner of Select Resources, a founding partner of Ark Advisors, and founder of External View. Russel is also on the staff of London-based Alchemists, a marketing consultancy.

Russel started his career as a copywriter but discovered his true calling was in account management. His first job was with McCann Erickson but he spent the majority of his advertising career at DDB where he was a Senior Vice President, Group Account Director. Russel was also a digital pioneer joining one of the first interactive agencies in 1994.

Russel’s consulting approach was profoundly shaped by his experience working on several accounts that were in the throes of deregulation and structural change – airlines, healthcare, telecommunications, banking, and energy. Working in uncharted territory and creating solutions for never-seen-before problems has proven to be a great foundation for helping companies cope with the volatility of modern marketing.

While best known as a “search consultant” because of the 250+ searches he has conducted, Russel sees marketing agency supplier management as a complex system involving much more than just firing and hiring agencies. Although he has conducted searches accounting for billions of dollars in billings, Russel’s greatest achievements have been revitalizing client-agency relationships, reengineering marketing departments and agency rosters, and bringing sanity to the marketing procurement discipline.

Russel’s clients include Activision Blizzard, Adobe, BMW, GSK, Hallmark, HP, Intel, LinkedIn, Microsoft, Major League Soccer, Nintendo, National Football League, Oracle, Porsche, Pringles, Sanofi, SAP, Charles Schwab, Sunkist, Toyota, Visa, VW, Wells Fargo Bank, and many others. Russel has conducted more than 30 complex global consulting assignments and searches including several prominent international media reviews.

Russel is an active supporter of industry trade associations. In addition to his involvement with the 4A’s, he also works with the American Marketing Association (AMA), Association of National Advertisers (ANA), the Incorporated Society of British Advertisers (ISBA), and the World Advertising Federation (WAF).

Show Notes Transcript

This week on MarPro our guest is Russel Wohlwerth the co-author of "Buying Less For Less" a must-read for all marketing and advertising professionals and for all procurement pros who touch the marketing space!

In addition to being an author, Russel has been advising companies around the world on all aspects of marketing agency supplier management. He is a serial entrepreneur who was an owner of Select Resources, a founding partner of Ark Advisors, and founder of External View. Russel is also on the staff of London-based Alchemists, a marketing consultancy.

Russel started his career as a copywriter but discovered his true calling was in account management. His first job was with McCann Erickson but he spent the majority of his advertising career at DDB where he was a Senior Vice President, Group Account Director. Russel was also a digital pioneer joining one of the first interactive agencies in 1994.

Russel’s consulting approach was profoundly shaped by his experience working on several accounts that were in the throes of deregulation and structural change – airlines, healthcare, telecommunications, banking, and energy. Working in uncharted territory and creating solutions for never-seen-before problems has proven to be a great foundation for helping companies cope with the volatility of modern marketing.

While best known as a “search consultant” because of the 250+ searches he has conducted, Russel sees marketing agency supplier management as a complex system involving much more than just firing and hiring agencies. Although he has conducted searches accounting for billions of dollars in billings, Russel’s greatest achievements have been revitalizing client-agency relationships, reengineering marketing departments and agency rosters, and bringing sanity to the marketing procurement discipline.

Russel’s clients include Activision Blizzard, Adobe, BMW, GSK, Hallmark, HP, Intel, LinkedIn, Microsoft, Major League Soccer, Nintendo, National Football League, Oracle, Porsche, Pringles, Sanofi, SAP, Charles Schwab, Sunkist, Toyota, Visa, VW, Wells Fargo Bank, and many others. Russel has conducted more than 30 complex global consulting assignments and searches including several prominent international media reviews.

Russel is an active supporter of industry trade associations. In addition to his involvement with the 4A’s, he also works with the American Marketing Association (AMA), Association of National Advertisers (ANA), the Incorporated Society of British Advertisers (ISBA), and the World Advertising Federation (WAF).

Dana:

hello and welcome to Mar pro the marketing procurement podcast. My name is Dana small, and I am joined by my fabulous and always on time. Co-host Mr. Rusty pepper. Rusty has.

Rusty:

I'm doing great. Thanks for asking. Uh, we've got a great show today. Pretty excited about it. We've got the coauthor of buying less for less on the show. And so before we get him introduced, I wanted to ask you a quick question. Dana, are you our actual reader of books or do you prefer audio books?

Dana:

So I do a lot of audio books just because of the kids, like at night and they have side during the day, I still try to do a lot of reading and keeping up on trends, whether it's LinkedIn or articles or downloading eBooks, it is a little bit harder to do when you're working from home. And so the audio books help that's that I still love reading, you

Rusty:

know, take an audio bird person as well. Cause I can just, I can do so much. I can multitask and I can absorb all the information I need. And also if I zone out which I'm prone to do, often I can easily go back 30 seconds or a minute or quickly and re hit what I needed to. So it makes it really easy to be able to take notes and always keep like a little pad with me so I can jot down Hey, time and information so that I can reflect back on it. But yeah, I've tried. To be a actual reader of books and I've done any like near literally, I've got probably a hundreds of the books from back when I traveled that are about. To a third rack and that's it. I give up. Cause it would be however long that flight was, I was engaged. And then as soon as I landed, the book went on the bookshelf and it never got read again. And so my wife would look at me and just go, you're an idiot by this stuff and you don't finish it, but you look smart. Yeah.

Dana:

I prefer the hard copy. I feel like it's easier to read than the computer. Quite honestly, and I used to have a really big book collection until I got married. And my husband's like, why do you have all these books? Because I like to read, he said, he going to read them again. I don't know baby,

Rusty:

but you may have, it's nice to have. And also you can always point back to them and you can also lend them out to folks. I, I jealous my wife and my kids are really good readers and they can just get lost in books. I've just never been that person. So I have to hear it or see it for it to really absorb so on that. I'll stop talking about all my deficiencies. Let's let's talk about the book that we are going to be talking about today with the author of Russell Woolworth from buying less for less.

Dana:

Yeah, it was on our initial podcast, right with Kaylee. She mentioned the book and I know I took a quick read and went through it and I don't know about you rusty, but I thought

Russel:

it

Rusty:

was. Yeah. That's how I thought about it was from her. And it is a, it's a quick, what's great about it is a quick read. So for someone like me, I was able to read it. So that's awesome. So without further ado, Russell, welcome to the mark pro podcast. Thank you. So to help get us started, why don't you just tell us a little bit about your background and then we can dive into some of the

Russel:

different topics. Okay. I'm an agency guy. I actually spent my I'm a journalism major and I spent the early part of my career as a copywriter. And I moved into the dark side account management and spent most of my time at large global agencies. And I got really tired after a certain point of just all I argued about. I rose to a position. All I argued. Clients about was money. And I was so far away from the work and I went to consulting in 1999. It started out as a search consultant, met a guy by the name of Jerry priests, a couple of years afterwards. And Jerry and I just had this amazing bond. He's become one of my best friends. And I was always afraid of procurement people. And Jerry showed me that procurement people are people too. And sense of. Developed pretty big practice. And we work with primarily larger clients. A lot of them are global and this is the thing I was meant to do. I love working with marketers and helping them increase efficiencies. I get the creative side by visiting agencies, but I am a consultant that essentially works with clients, either doing agency search. I do a lot of compensation work, too. A lot of consulting to procurement departments, do agency, relationship management, um, marriage counseling, if you will, and help clients develop.

Rusty:

I noticed how he'd smiled at laughed at looked at us like, Hey, if either one of y'all need any help with your marriage or your guy,

Dana:

I could probably

Rusty:

use them. I think anybody going so well. It's interesting. So you've got an interesting background and collection, but how, where did author fit into all of it?

Russel:

I was a journalism major, actually I, my first writing, I was the editor of our school paper when I was in the fifth and sixth grade. So I've always been a writer and consulting, writing, being able to, by the way, I said, I started out as a copywriter and I realized. I got tired of going to work every day with a headache. And I ultimately became a much better business writer than a creative writer. And in the consulting world, it's great to be able to be an effective writer. You can't always be in the room to be able to concisely, define what you want to say and get it out there clearly. And quickly is really an asset. Particularly today. We don't see very many people with writing skills. So that's where the writing was always embedded in.

Rusty:

It's funny. You mentioned that whole writing element of today. It is the watering down of the way people write is it's appalling rack. She really just see it. It's a, it's embarrassing. Sometimes when you read people are very well-educated, uh, and very successful. You read notes from them or messages. Wow. Yeah. Get a little bit better.

Russel:

Yeah. Email has, I think ruined to some degree. Yes. Email and texting was ruined our ability to string together, sentences and stuff. But I always look at people and I'm thinking I'm always looking closely at those little errors and syntax and spelling and drives me crazy.

Rusty:

I would think that it would drive this. If you have a background in it, it really just makes you, oh, read

Russel:

my

Dana:

blog then. No, just joking. I actually love writing too. I was never one of those people say, oh, I'm going to be a writer. But I found, I think a little later in life, it was really enjoyable to write a blog, but it's really cool that you wrote a book. What was the motivation? Is it to try to educate people or just make a bunch of money? What's your motivation for the book specifically?

Russel:

It wasn't to make a lot of money. It was more grew out of a sense of frustration working with procurement departments, which is what I do basically every day of my life. And there are some really good departments, but for the most part, many were not so good and really just trying to reduce costs. And we figured, okay, we need to make a statement here. And the idea was, there's so many business books out there and they're long and they're barring and there's something called a monograph, which is an old fashioned thing. It's just a like 50 page. And I feel that most business books can be distilled down to a monograph. The idea of the was to the premise of the book was to make a short, simple case as to why indirect particularly marketing procurement is different. And some people ask me that headline doesn't make any sense. And the reality is buying less for less. It's the perceptual victory that people get, oh, we got the price down, but the reality is you're getting less services for that. So that's where the title came from. The idea was to make a short, simple case and explain to people. And it's been a surprise little hit, I think because of its simplicity, it's

Rusty:

been around for a while too. It hasn't, it's not like it was just in the last few years. But 15, this

Russel:

was 2013 is I think when we Polish it, actually I think that it may be time for an update. Things have changed, not that much, but I think it's always good to have to update things, particularly in the marketing space. A lot of things have changed and data. I noted to you earlier, we were talking about the fact that we're seeing a lot more procurement professionals out there where the old days there was people coming from standard material. Procurement from the direct side, coming to the indirect side and trying to apply that same skillset. And now we're seeing a number of procurement professionals gone to school, really highly educated in the area, but it's still, I call them the 1% or is it a 10% from my perception, the vast majority of procurement departments are staffed by people that came from direct. Yeah.

Dana:

And there's a big difference. I think in the book you mentioned. Between procurement strategic sourcing. Right? There's a huge difference in what your focus is. And moving over into marketing, you need to be more strategic. So just being on procurement costs, focus doesn't really work for marketing.

Russel:

Yeah, it requires a very different mindset. Typically it's about cost extraction, which is something that's, it's not easy to do. If everything's spec all suppliers are equal, then we're looking to, how can we get the best cost and the best payment terms. But this requires a really different mindset. It's marketing is complex. It's very fluid. It changes very quickly and it's tough to measure savings. And this is a lot of this is the fall. Marketing agencies and the marketing industry itself, it's becoming better, but it's a really difficult space to get your hands around. And the problem is if you apply those direct sourcing skills to marketing procurement agency, a good agency can be a lot cheaper than a bad agency. So it's really hard to get your hands around space. And when I say mindset, a lot of people, I just have a very fixed mindset and not everybody works for this. And I think corporations would be good to understand who are their more creative, more fluid things. Because there's a role for everybody, but that's one of the biggest problems is trying to get your hands around something that's fundamentally different. That and marketing agencies don't help themselves. They're often sloppy. They often don't have good rigor in there on their financial side. It's clearly getting better, but it's not as good as you would see from a company making brown paper boxes or rotor or graveyard presses, whatever. And the toughest thing I think is credentials are really hard to make. There are no, there are very few standards. There's no accreditation and looking just to create it is that's a very personal subjective thing. So it's very hard to determine what are the hardcore credentials, how do we stack up one agency against the other?

Rusty:

So what were some of the takeaways that you got from when you started researching and applying these principles in the book? What were some of the different key elements that you focused on for helping market? Put that playbook together so that they can start trying to move up that food chain. Um,

Russel:

one of the things is to start out with a strategy and to understand with great precision. A lot of times, at least from the agency search side, people are like, let's find a new agency. And something else that we observed is. The best relationships we see are when procurement is embedded within the marketing organization, there tends to be a lot better alignment. There both sides are rowing in the same direction. Versus when procurement comes in, marketing feels that program. It's raining on their parade. And procurement is like these marketing people are crazy. All they want to do is get the hottest agency and have no understanding in regard to price. And if you look at marketing professionals versus procurement professionals, you line them up. They're very different kinds of people. Marketers are loose, they're fluid. They tend not to have the same. Oh, fuck. Yeah. Well, it was fun among other things, but they're really different kinds of people we found when they work together, they really understand each other's world better. And that's another problem that we've observed with marketing agencies. They tend to look at procurement as this evil empire. And one of the things we talk to agencies about is getting to understand procurement instead of holding these people off. Take them out to lunch. What is their background? Understand what they're doing? What are they looking for? The problem is we have marketing doesn't understand procurement marketing agencies don't understand procurement and procurement. Doesn't really understand marketing agencies. So this is the perfect storm for conflict. And if we can get both sides together and understanding where they're coming from, get a much better outcome,

Dana:

like, like in your book, you talk about the procurement. For marketing. And I really appreciate that. You say she listens well. So to me, as a woman having that kind of called out, then there was, I think, amazing. She has a low ego. She allows other to claim glory, and I think you do a really good job in summarizing. What a good marketing procurements. And I think some of the ones, some of the people that we've talked to who are the 1% or 10% you talk about, maybe sometimes could be marketing themselves. They think they could eventually go over to the side. I know I've been asked and I thought about moving over into the business side and thought it would be very interesting, but I think those are the people that are really successful in their role. I think. Like you mentioned direct procurement people aren't as successful in that role because it's not a strategic look for them. It's a cost, very focused type of relationship. And that's not, that's like the last thing you want to say to the marketing, it should be lower on the list because it's just not, it just doesn't make sense. Marketing can drive revenue. And I think you mentioned that in your book too.

Russel:

Yeah. I'd like to add that to me, the biggest compliment we can give is when we got a meeting going on in 15 minutes in, somebody will ask who's from German. Who's from marketing. That to me is the biggest compliment we could give. Because again, we're all trying to create the same thing and create value for the company, additional sales. And I have seen some of my procurement clients go on to marketing roles because they're extremely valuable because they understand both sides of. The equation, the biggest knock against marketing is marketing. People are aloof and they really don't care. All they want to do is create pretty pictures. And when it wards and the reality is that we're looking for a marketing effectiveness. As we talk about in the book, ironically, there is a lot of data that shows. More effective marketing leads to better sales and better ROI. And a lot of people don't believe that, but there's a lot of evidence out there that points that better marketing executions will lead to greater ROI in a marketing spend. Another point that we like to make is if you don't believe in marketing don't market, but. One of the arguments that procurement is always heard is we're different, particularly on the direct side. Definitely. But in the indirect side, there's all kinds of there's insurance, there's law, there's all different kinds of functions. Marketing is one of the areas that is different. And the reason that it's different is it's the ROI we're getting, getting, buying a jug that, that holds that's gotten that strength of the last on the shelf for three years is great. And. It will, it may save you a little bit of money, but marketing is got an ROI behind it. It's got a demonstrable ROI. So the question I always ask is if marketing is jet fuel for your company, why do you want to cut it off at the knees? Y again, these perceptual savings, if you just want to make it cheaper, it's probably not going to be better. So that's a fundamental argument that we often use and people either get it or they don't. And if you don't accept the fact that marketing is investment, it's I say, reduce the budget. Don't spend

Rusty:

one of the big takeaways I had from the book was market procurement should focus on increasing marketing ROI, not lowering cars. We've heard that from some of the guests we've talked to as well, that they fact. Well, the point is we're here as a value chain. We're here to support marketing and to bring best practices, operational best practices, new innovation, and to be a supporting kind of role. And we've also seen that some of the more, most successful. Market procurement folks have marketing experience because they understand it and it makes it a lot easier for them to engage. Hey, I've been there. I understand what you're going through. There's that empathy part of it. And that makes a big part. And so a lot of things that you've been talking about, we've also heard from a supporting from some of the interviews we've had. And so it seems like there should be a kind of a good playbook for. Marketing or procurement organizations when they're going in. And they're trying to expand and build out a really strong marketing procurement organization, how to go forward with it. And

Russel:

this is where the strategic aspect comes in. My bigger clients are spending considerable sums of money. With lots of zeros are very focused on Romy and doing the right research. You need to start. In advance, trying to figure out what are we trying to do and how are we going to measure that you can't just go in and hire a bunch of agencies and hope that things will work out well, it's hard to measure marketing despite all the, the increase in digital spend and all so much of marketing we see today is performance oriented. It's still hard to measure. You need to start out in the beginning with that, that north star about we've got to measure, we got to make it real clear. And, uh, I'm always surprised when I asked. The procurement person where, you know, where, what is the north star and the north star is savings. And that's what drives me crazy. Again, we've got these very enlightened procurement organizations that understand that marketing provides a lift, but in too many cases, I've worked with clients of all different sizes, some smaller budgets as small as five or 10 million. They don't even have indirect sourcing. It's a discipline that everybody really needs to accept and it's not widely accepted in the industry. Unfortunately, again, that's the bad part of the fluidity of marketing and in the digital supply chain, digital media supply chain. Worries me is there's so much fraud embedded in it. We thought, oh, wow, this is great. We can measure everything. We've got this direct line from promotion to the ROI. No, we don't. And it's just continuing to change. And now with the loss tracking cookies and all these things, and another wave of goes over our head of another challenge for us.

Rusty:

I think if you start to see results, when you look at, from the generation of sales, right? So what's demand generation look, and how are you creating it? There's going to be a lot of areas that you're not going to be able to traditionally measure, but they are effective and having conversations and putting your brand out there is going to be key. And then, so ultimately you've got to be able to put relevant content in front of your audience. You're just not going to be able to track. So it's going to be hard rubbing, put pressure on marketing procurement or any procurement organizations to try to quantify that into some type of result-based scenario. And so I don't know what the. Solution looks like Dana you're on that side. Where do y'all?

Russel:

Yeah,

Dana:

it's hard because we view, at least I do marketing procurement is very different. And so when everybody's doing standardized things across indirect or direct it's, you're the one person raising your hand. I can't really do it that way. So what do you want me to do? It's not like when you're manufacturing something, you have quality control and you can measure things and you can see how many. Went wrong. It's not that easy to measure. And I think because of that, it causes a lot of issues for a marketing procurement person and puts a lot of pressure on us to try to figure out how can we somewhat standardize and provide reporting to executives without really being too different. In a sense, it's a tough position. I'd say to be in other areas are definitely a lot easier to just track and.

Russel:

And the CMOs, the only person, the corporate boardroom that has a back full of arrows because marketing can't measure, you talk to everybody else in the C suite, and they've got really good metrics in terms of what their costs, what their investment are. An interesting problem that we saw last year was during the pandemic. So many marketers are moving to performance-based marketing and number one, it works. And number two, the idea is, oh, we can measure everything. And I think what I've seen, what I've heard from a lot of clients is that they overdosed and performance marketing by focusing completely on the bottom of the sales funnel. What they did is they hit their reach curves. And then at a certain point, just doing pure performance. Tends to bottom out. And what you need to do is have some of that top of funnel marketing need, I think somewhere in the middle, because you just can't continue to just say offer cheaper whatever brand branding at some point needs to come in there. So I've seen a lot of people pull back and trying to merge the top of the funnel with the bottom of the funnel on what I call mid funnel kinds of approaches. Yeah,

Rusty:

I definitely think that's where you have to, because you have to build brand and branding is very difficult to measure. It's extremely, it's one of the more challenging elements, right?

Russel:

Yeah, I'm not seeing a lot of what I would call big old-fashioned brand campaigns, but there is this, the school of thought from people who are not necessarily steeped in marketing that think results should be instant and performance marketing does is pretty quick, but brands are built over time and there's people need to have an understand. There's both the short term and the longterm. And many people are not patient want to see that immediate ROI and get frustrated and say, forget it. We're going to move into another direction. So it's a critical thing to understand the long-term aspect of building a brand. And we know that brands strong brands actually perform very well over time.

Rusty:

No marketing is definitely not a light switch. You just don't turn it on. You get results. It takes time. And that's why they're called campus.

Russel:

Excellent

Rusty:

point. So the book you're talking, you're considering maybe doing an update to it, what kind of elements do you think it would be interesting to be out where some of your different.

Russel:

First of all, as we've been talking, I think the procurement professional has changed a bit, but again, it's not in every organization. I still think that's a minority. So that's one point we've got a more sophisticated procurement group out there. Also the advent of digital marketing and measurement has changed things a bit. It was seen as a panacea, actually, modern marketing is really messy for a number of reasons. It's complicated. It's hard to measure. We've got this supply chain where. More than 50% of the dollar. Every advertiser spends, never makes it to the media owner. So there's a lot of people making a lot of money in between and that's created again, my bottom line is mark modern marketing is a big mess and we're still trying to figure it out. And it changes. The biggest change. Again, is Google's threatened to remove tracking cookies. Now they gave it, they said, okay, we're going to make this a little bit longer. It's throwing everything up in the air. So we're back at square one. So I think acknowledging. Of what's happening in with so much digital media and the messiness of the supply chain there on the fraud and the fact that the media owner and the, the media, the advertiser, somehow there's a disconnect. A lot of money is going away to intermediaries in the supply chain are making a lot.

Rusty:

Where do you delineate the success and failure? Because if there's aren't a lie, that's ultimately what companies care

Russel:

most about. Yeah. I don't know if the ROI is still there. I think it's really hard despite the supposedly simple nature to measure digital efforts. If it's not that easy and it's everybody thought, oh, this is great. We know exactly where the money went. The reality is. It's not any clear than it was 20 years ago. And again, there's so much fraud in the supply chain. And the fact we had media Palooza media has become a much more difficult area because of the nature of their media is where all the money is. Media is. Tremendous opportunities for media agencies to in very strange ways, make additional money. So it's, if anything, it's made our jobs much more complicated. Yeah.

Dana:

Typically, at least on from the people that I know, we separate media out as its own category. It seems really like creative and strategy are one thing, but meat is just its own beast. And typically we try to find people who have really end up the experience with media to be able to source it. Cause I don't think it's something that. Especially anybody from the directs I could just pick up and go with, because there's just so much to it in the planning and the buying ahead of time. And right. There's just so much to that

Russel:

categorize grade. There's so many pieces to digital media that does require a specific expertise. One of the problems is there's a first of all, there's a labor shortage in all of Mark's. Part of this was caused by the pandemic. A lot of people said, you know what? I'm tired of working seven days a week, 12 hours a day. And I've just left the industry when I'm hearing from agencies is that their people are being poached by other agencies. They're being poached by media owners like Google and Facebook and agencies are really having a talent problem in our review practice. We've got these great opportunities. The agencies. We can't compete. We just don't have the manpower to, to compete in a search. And we've seen a surge of media reviews over the last 12 months or so it's, I think it's bad for the industry. Media agencies are under siege and it's hard for them to constantly be under this pressure, or you're always under review. The relationship lasts two years, which brings me actually to, to another point, which I think. In procurement. I wish we've got all these levers. And again, a lot of it we're looking at price. I wish that we could form tighter, more collaborative relationships and really understand and have longer-term relationships. This mentality of what I call the statutory review every two or three years, I think is very destructive to the industry. When I asked marketers, do you know how. Of review cost for an agency. It can be a hundred thousand dollars a half a million. It can be a million dollars. It's very expensive for the industry. And I think we should focus on longer-term more transparent, collaborative relationships, and really create this fantastic partnership as opposed to having the agency from the day you signed the contract, it'd be under threat. If you went into your marriage like that. A lot higher divorce rate and clients have this defeatist thinking. If this lasts two years, that'll be great. That's not a great way to enter a relationship. I agree. I always

Dana:

tried to look at it at least from my point of view, as a partnership and we do want long-term relationships and that's where we can see. At the value where we can find innovation where we can drive efficiencies and yes, cost will come right with those things. But having that partnership is what's key. And if you're constantly turning people over, yeah. Maybe you might, you know, get some savings here or there, but you're not getting the added value or benefit of having a long-term relationship with an agency.

Russel:

Exactly. It takes. I believe the average agency, 12 to 18 to 24 months to onboard, to fully understand. So you come up to peak efficiency, then your job is threatened 12 months later. So I think it really ridiculous some of my work, which is not in the procurement area, which is really interesting. Clients will hire us and say, we like our agency, but something's wrong. And the agency will say the same thing. So we'll go on. A couple of months to a lot of interviews when we find wow. Now we understand why everything's so expensive, the average, whatever they're creating, whether it be media plan or creative unit gets reviewed 18 times. That's okay. That's, nobody's making money at that. So why is that? So you go in deep to the relationship. So when you can fix these things, it creates much more productive relationship, and it's a much better way. Again, if you can have a tighter longer-term collaborative relationship and really understand how to work clients, companies. Japan in particular who believe in these long-term partnerships and really take a very different approach. Stuff happens. But over the long run, this, this glue that holds the relationship together, ends up being really good because some things happen and stuff messes up, but the agency doesn't get fired. They've got this long-term relationship and they've got this continuity. You say, okay, but you're your trusted partner. We're not crazy about that. So I, to me, that's the ideal that we should be ahead of towards supposed to the statutory views of every two to three years, terribly inefficient, really expensive for an agency. And so we've been able to demonstrate for a client that when you're putting your agency in review, every two or three years, you're knocking out, they don't have their eye on your business. They're trying to defend the business.

Rusty:

That's disruptive for everybody involved from the. The client side it's disruptive. It's expensive for them to do with the reviews is expensive for the agencies. It's just, it's bad for the business overall. I a hundred percent agree unless there's a fundamental problem that needs to be resolved. And there's a reason to admit them out. So you're talking about language there, but what I want to ask though, is that you're talking about some of these situations where there's just they're this they're just not clicking the relationship for whatever reason. It's just not on track. W where, how are you typically seeing those problems arising? Is that just because of the, fast-paced just trying to get them onboard and up and running and there's lot of steps. Miss, what is, what's the main problems that most organizations are experiencing when this stuff

Russel:

has. Let me address that a couple of ways. First of all, in regard to onboarding, after doing a lot of this relationship work and spending deep time, I'm talking months in interviewing the marketer side, the agency side, one of the things I've come to realize is when agencies get hired. They're not onboarded correctly. There's usually there's a big campaign. That's something that needs to be happens. It's like quick, let's get the campaign on there. And the onboarding, what we're doing is we're building a pyramid with a shaky foundation. And the reason I say this is when I do these interviews, I ask the agency, what's your job. And they say X. And I asked the client, what's the agency's job. And they say why? And it's, they're completely divergent pathway. So it's not. The onboarding of the technical skills. It's what I call the softer side of relationship. How do we like to operate? We don't want to do pre-production meetings the night before we like to communicate primarily in slack or email, or you need to understand both the foundation. I think that's one of the reasons that so many relationships don't last a long time. They weren't properly onboarded. So that I think is one of the biggest sins in this business. Typical things that we see our marketer briefings are not well done. And agencies go off and do what they thought they heard. And then it takes 12 takes all these times. And when I get both parties together, The marketer says, why don't you ever tell us an agency to say, we didn't want to, we were embarrassed and we frankly didn't want to confront you. And once we can get this stuff out in the open, we typically recommend, okay, briefing Scott have to be with senior people. And if the agency and the client need to agree on the brief, if they don't know where it goes forward, that's a typical problem. The review cycle. A lot of times we have people there's people in marketing on the advertisers side. I don't know what they're doing and create a lot of problems. And then we have agencies have a lot of sins, arrogance. All they want to do is have their great ideas approved. They think their stuff don't stink. Everything they do is amazing and just a lot more arrogance. So those. Deep into a relationship. You understand what tears these apart and the longer-term relationships have. There's long-term partners. There's this continuity of thought everybody's in the boat rowing towards the same direction and something else that comes up a lot these days is with our larger clients. It's not what's the right agency, but what's the right agency. Which is again, modern marketing requires a lot of specific skill sets and there's generally not of this. Agency's going to do everything. So again, modern marketing is complicated and we're just adapting to her. I

Rusty:

heard you talking about two of the big pillars there. You've got the marketing side of the business. You've got the agency side. But it have to be aligned, but there's a third that we really should address there too, is where does marketing procurement fall? And what's their responsibility with that onboarding and to make sure that everything is being followed because when all three are in alignment, I would imagine that foundation is rocks.

Russel:

That's why I so prefer when Mar when procurement is embedded within the marketing function, because they are the voice marketing procurement is the voice of reason. Marketers tend to be emotional where marketing procurement is. Let's bring this back down to earth. So it's the three legged stool. When we have all three groups, everybody contributes something differently. And I think it creates continuity. Thought, what are we going to do? How are we going to measure? Because again, marketing in my experience that tends to go off half cocked, and then we wonder why it went wrong because we didn't have a plan. And that's what marketing procurement brings us back down to earth in grounds us in reality. And that's why I think it's so valuable. I know it's expensive and it really only in larger companies do we do that, but. I would say that the difference between having embedded marketing procurement versus procurement, being a different group that comes in every three years, nine.

Rusty:

You're exactly right. We are, we get so excited. We get a creative idea. Oh my God, we got to go out and then you just start running after it. You're like, okay, this is what we're going to do. And you don't even think because we are, we're excited. We're easily

Russel:

excited. So exactly. And it's almost, it's a joke, but because everybody's working together, the marketing procurements, so let's remember our objective. This is the moving away and it's, oh, you're raining on our parade, but in a very nice way. But again, the voice of reality and. Marketing procurement keeps us tethered in our objectives and goals and make sure that the things work. So that's the ideal. Again, three legged stool for me. So you say

Dana:

the ideal is really to have marketing procurement embedded in marketing. Have you seen, and what I've at least seen in other organization is even if we are separate, we try to align our goals with marketing. So even if we're not in the function, whatever's going to make them successful, should be our goals too, because that will make us successful. And I feel like it's. Other functions don't typically have that type, but if you can at least do that, you're a little bit closer to B than an embedded type structure.

Russel:

I agree. My observation, this is very black and white, either marketing and the procurement department get along, or they really don't like each other and feel like, oh, here comes a police here. So there's never, there's not a lot of middle ground there either. They accept it. And I have a client right now. Yeah. The, the procurement person, even it's a separate department, but she's got a long history of working indirect with marketing agencies and they really talk nice together where other ones are like, oh my God, I have to bring markety after being procurement. And I'm sorry. And they're going to, they're going to create a lot of problems. Hopefully we can work through that. So it's very black and white. It's very, it's, it's very binary either. It works or it doesn't, there's not a lot of middle ground.

Dana:

We don't cause problems.

Russel:

Do we rusty? I agree, a hundred percent. I find myself always defended because I worked in a lot of my clients are procurement. I worked directly for many procurement organizations and I found myself defending them. And again, if agencies would take time out to understand who procurement is, I think they find that investment in time to be very valuable. If the mindset is these people are bad and they're here to make life difficult for us, it's never going to go anywhere. It's very predictive.

Dana:

Yeah, I completely agree that the agencies and have come and sat down and value us, we've been able to work with them, expand their business, help them innovate, help them in other areas. And so I think it's a really great statement for you to say that agencies should try to work with procurement. I think it would be a lot easier for everybody at the end of the day, if they did. I find to me the best agencies that do are the ones that do come to marketing procurement and will say, Hey, I'm thinking about this or that. Can you introduce me? And they leverage us to as an ally, as a business partner, but what are your thoughts rusty?

Rusty:

That has to start from the very beginning. That's a cultural setting up the relationship. Taking the time to really lay out the foundation and what the expectations are. And you can't go into battle with it. Everybody having their different communications networks, their own strategies and plans because you end up running over each other and you have bad problems. Same thing goes with the business application of this is you have to have the ownership say, this is how it's going to work. These are the expectations. This is the goal. Now within each of these different groups, marketing procurement, the agencies. They could then decipher that information as long as it falls back up to the main goal. And everybody's on the same page, it should work well, but the agencies not automatically most agencies, I would think 99% of the time are not just going to go walk over to mark and procurement and feel comfortable with doing that. But at the very beginning of the relationship, if the key. Of that overall agency marketing market procurement, they set up to say, this is where it needs to work. Feel free to come to us. This is the expectations that you are going to come to us and we're going to then provide information back then it'll be a win-win, but I bet a guaranteed 99% of the time that

Russel:

doesn't happen. Yeah, there, I think many are afraid of procurement and just even understand they should, they shouldn't, they should not be, but if they don't, if they see them as an evil force, that's going to take money away. But I think like understanding who do you report to? Is that the CPO's is the CFO. Who do you take your orders from and what do you see as your job and what, how can we work together? Because agencies, even though they've gotten better since the financial downturn and media pollutes, I think agencies have really sharpened their financial pencil and are much better. I, a lot of times agencies are always disappointing. They didn't have the financial rigor. Didn't really speak procurement. I think that they're much better. And again, now that we've got this personnel problem agencies are in a sellers market. They have even more power. Take somebody out to lunch, get that basic understanding somebody that you can talk to. And a lot of times procurement don't talk to us. We only talk through email. It's like they, they put up that wall. So again, we've got this kind of bad dynamic happening. So both sides can be a little bit more opening and understand one another. I think we'd all be better. Yeah. And

Rusty:

I would say too, that this is the problem with marketers have, is this stuff that needs to change? We talk about there, this as negative, even in gesture and a joke with your agency partners of, oh yeah, we got to bring marketing in there, painting whatever. There's not that even if it's a joke, It becomes part of the conversation and it, someone that may be listening to it that may not be privy to the fact that it is a joke. They start to hear that. And then they get afraid of the procurement side of the business, where they shouldn't be or vice versa. Right. It's got us all lay out the fact that we're all in this together and the negative, even the joking should really be eliminated more. And I think you'll have a much stronger, healthy relationship between all three parties.

Russel:

Rusty. That is a great point that we're all in this together. We all have the same objective, so fighting one another. It doesn't help us reach that objective. And I feel it's almost like our political split in this country that people Democrats see things one way Republican see things. Another procurement sees things one way. See things one another, and it's a split that really, you're not being paid to do that. You're being paid to maximize the ROI of the enterprise. So we all have a similar goal. So why can't we work towards that?

Rusty:

All should have the same goal. Alignment should be here's the. And this is how we're all measured. It doesn't matter. Marketing you're measured on desk procurement market decrement. You're measured on this and agencies you're measured on this. Now there could be that can be broken down, but if this one primary goal is not accomplished, it's a failure and Joe across the board. And then you've got to rebuild to get

Russel:

back up there. Again, this goes to my point about onboarding, understand what everybody, what their goals are to understand at a bigger picture. We're all once. Once the search has been one everybody's in such a rush to create a campaign or media plan or whatever bad mistake you need to, you should ideally be in a retreat with a structure to really understand where everybody's coming from. And that way you've got this much firmer foundation from which to build upon and the longer-term relationship. Shannon works a lot of clients who have 25, 30 year relationships and people are always shocked. Those exist yet. And they're really tight partnerships because they have done the right things to keep the partnership going. And we don't see that often, but it does exist out there.

Rusty:

Yeah. And I think there's a lot of conversations we can have on that. We're getting towards the end. Maybe that's just be a good way to be able to say, Hey, we want to have you back. We can start talking about some of those other topics on another episode, because I think that there's so much that we can actually digest here and learn from. So Dana, anything you else? Any other questions? No, I think it

Dana:

was a really good conversation. I think we had a lot of the key points and brought up a lot of really good points about the book and things that I personally enjoyed at least about it, especially I think the only other thing I would say is the. Points, but you may find an agency to do it for cheaper, but that may have a negative effect longterm. And I think showing that mathematical equation of sure you may pay 60 K less this time, but in all actuality, if sales are going to go down versus up, it could be a huge gap of maybe half a million dollars. So saving that 60 K upfront and just doesn't make sense. And I think that's an amazing and very powerful state.

Russel:

I agree. Yeah. Dan, I have a question for you. So I always ask this to procurement people and I always say shamelessly, I say, how is, how do you get your bonus? How is your performance measured? And often, usually the first question is, well, she purposely it's savings and I'm not sure if that's true. I haven't asked millions of people, but that seems to be prominent response. I don't get me wrong, but that's

Dana:

one of many goals, but do I get my bonus based on. No, but I wish I did because quite honestly, the years have really good years. I love to take a chunk of that change and stick it in my pocket. No, we have like anybody else. Yes. Savings is one of our goals, but it's not the only goal. And so for me, it's judged by how much spend do we have under management? How much penetration do we have with the business partners? How are released. With the business partners, are they standoffish? Have we done a good job? Where's the maturity of our organization within embedded in their organization. So I think there's a lot of things and yes, unfortunately savings is one component of it, but I definitely don't get bonus based on it. And sometimes I wish I did, but I don't know anybody else, either. In any other industry, who's solely based bonuses based just on savings alone. I'll say.

Russel:

I get that response. And maybe I'm not asking the question, right? Cause in agencies that are their perception that they, if they perceive again, that the sole objective is to reduce costs that creates sort of a fixed mindset, a fixed negative mindset on their part. Again, as Rodney king said many years ago, can we just all get along?

Dana:

Exactly. No. And we've talked to you and rusty I've talked before we do, as procurement people are sourcing people, do our jobs, the savings follow. You can do everything else well and do your job. You don't need to focus on cost at least within marketing to drive value and be a good business partner,

Rusty:

innovation transformation. There's so many different ways that you're gonna extract savings, not just in a traditional, Hey, I'm lowering those costs. I think there's a lot of different ways to, to greet that, that. Russell tell us where they can buy the book, buying less for less

Russel:

amazon.com. It's a, an actually it should be on our website, but it's not, but, and it's very inexpensive and it's a, again, it was designed to be a quick read, not a novel that you curl up with at night, for weeks on end. And. Working on an update. I mean, but I think you'll be better. You'll be all the better for it. Enjoy it. And I

Rusty:

want to say it was like 65 pages. It was about 65 pages and it's not like really tiny print either. It's which I was very thankful for it because there was actually spacing between the lines and it was easy to read 'cause I

Dana:

was going to suggest, I would love to see the extended version as a sourcing person. I would love to see because Russell has so much great knowledge of. Industry experience actually would love to see the book that I could curl up with that night come to from

Russel:

Russel. That will be in retirement when I do that one, but again, it's designed, I get so many business books and every agency send me a new one and everybody out there in the business. Several a month and they're all really thick. And the whole idea going to this, let's make it a quick, easy read with a very short, simple case, short and simple in and out. We are all bombarded by way too many communications. I think we often forget that keeping somebodies attention, our attention span has probably gotten smaller and smaller as time goes.

Rusty:

I think it was fantastic. I'm glad a big shout out to Kaylee for mentioning the book during our actually a very first episode and that got us out there reading the book and hence got us connected. So I'm glad that all happens. So great job Kaylie, if you're out there listening and Russell, thanks again for being on a Mar pro. We really appreciate it. Looking forward to having you on a future episode, we can continue the

Russel:

conversation. Thank you. I will add this. You can probably chop or cut at this point, but it's funny because. Well, the book first came out. I go to these industry conferences. People be looking at me, I'm like, is my zipper open? Or why is everybody looking at me? Strange. There were like a spot on my shirt. And then a woman. She had the book, she goes here, him. I didn't see the book. I'm like who? So it's funny. Cause I'm a very under the radar person. Who's not big for, I'm not big on social media probably should be. I like to be under the radar. And then it's almost embarrassing when people caught your or mentioned the book and you get called off in the crowds. We didn't think, I don't know what its impact has been, but I'm always surprised procurement guy from Germany. He says, oh, this is a must read. So we must've done something.

Rusty:

That's also has got to make it.

Russel:

Yeah, it does. It's, it's really complicated what we do. Um, it's just, again, my, uh, fundamentally I think my job is trying to bring these two parties together. That's why I named the company external view because sometimes the marketing communications agencies and the advertisers are loggerheads. Sometimes it takes somebody from the outside to look at that in with, with perspective and say, Hey, it's really not that bad. So that is the part of my job that I really enjoy doing the research, doing the interviews and really understanding. Your relationship is not broken, but there's issues here. And that's, to me, I find that so interesting, even though I have to pay for certain expenses, I would do it for free cause it's so I guess ultimately the end of the day, I'm a lawyer and I love to see what's going on in other companies and how relationships break up. But it's all I find it fascinating

Rusty:

and it's evolving very, it's continuing to evolve and it's never going to stop. So I think we can have those comp contingent capitalist competition because we're trying to do the same thing. We're trying to bridge the gap. These two parties. And I think there's a lot more conversations that we're going to be able to do with that. So keep us posted on progress. We'll keep having those conversations and I appreciate you being on

Russel:

and thank you for inviting me. I'm very much appreciated and I enjoyed the conversation.