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New ANA research reveals shifts in agency comp practices

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With increasing pressure to cut costs, Mondelez decided to take a look at its rudimentary, manual scope of work (SOW) process to see if there was a financial benefit in automating and updating it. Originally, the SOW process was decentralized and handled by marketers at the regional level, not the global level. This ultimately created a lack of transparency across Mondelez in terms of how marketing dollars were being spent by its brands in different markets. In addition, the arbitrary enforcement of the SOW process resulted in inconsistencies and redundancies across markets in SOW tracking, fee fairness, and deliverables. After testing a centralized process with the Oreo brand, which resulted in a 20 percent savings in agency fees alone, Mondelez opted to streamline and automate its SOW process. After a long search, the company decided to partner with Agency Mania Solutions to develop a new scope management tool for global use. This tool was created with the following features in mind:

• User-Friendly. It is easy to use, with 24/7 customer service available around the globe and embedded fee benchmarks that automatically create “should cost” estimates for marketers. Mondelez also made sure to provide step-by-step training for those who would be using the tool.
• Gated. Marketers are the ones who initiate the SOW process and can control when it is passed along to their procurement teams and agency partners.
• Storage. The tool stores every version of each SOW, allowing the company to have a virtual paper trail of how the agreement has changed over time. Globally, this provides Mondelez with an enormous database of the work that’s been done for each brand and what was paid for it.
• Reports. The tool also enables the brand to aggregate and analyze SOW data with its various reporting features. Reports are available by brand and category, and can be segmented by market and by region as well as globally.

Ultimately, the implementation of the automated tool allowed the company to go from inconsistent descriptions of work to standardized descriptions, an inconsistent process to a more organized and seamless one, limited visibility of the work to multiple levels of transparency, no centralized global repository to a global database, and intermittent compliance to almost 100 percent compliance in the U.S. The project was launched at the start of 2016 for creative agencies and “above the line” work. It resulted in significant cost savings and great feedback from marketers. In fact, it was so well received at Mondelez worldwide that after a year, the project’s scope was expanded to include “below the line” and digital work. The expansion went live at the start of 2017.

By: Kerry Breen, Senior Manager, Content Creation, Marketing Knowledge Center, ANA

September 12, 2018