Martin Riley, Pernod Ricard CMO and President of The World Federation of Advertisers (WFA) looks at the future of effective partnerships from the client's side. He believes Creativity, Challenge, Connected (to business), Continuity and Culture key for clients with Communication, Creativity, Craft, Contribution (to business) and Committment key for agencies. This presentation was shown at the IPA's Performance Adaptathon on 8th July 2014 in London. Find out more on our website www.ipa.co.uk/adapt/performance and join in the conversation on Twitter using #ipadapt.

1. Martin Riley
Group CMO Pernod Ricard
President of the World
Federation of Advertisers
The Future of Effective
Partnerships

2. MARTIN RILEY
GROUP CMO - PERNOD RICARD
PRESIDENT – WFA
THE WORLD FEDERATION OF
ADVERTISERS
Who AM I?

3. Pernod Ricard
Who are we?

4. Pernod Ricard number 2 of the wine & spirits industry
BRAND COMPANY MARKET COMPANY
HOLDING
8,6 billion €
(annual turnover)
19000 people
around the world
100 production sites

5. Iconic brands

6. Prestigebrands

7. StrategicPremiumBrands

8. Where do we come from?
Paul Ricard
« make a friend a
day »

9. 2008
2005
2001
1975
3 Big Bangs in 10 years
Growing through acquisitions
180
5
193
2

11. 70 of the world’s biggest marketers
Membership doubled over the past 6 years

12. • Best-in-class forums meet regularly around the world.
• CMOFORUM
• IMCFORUM
• MEDIAFORUM
• DIGITALFORUM
• SOURCINGFORUM
• Limited to 20-30 of your Marketing Professionals. No agencies or media
owners.
• Interactive format hosted by member companies.
Peer-to-peer groups
NYC London ParisSingapore

13. Global Agency Remuneration 2014
Remuneration models in use across all agency types
Source: WFA online survey: ‘Global Agency Remuneration Trends’; Base: 43. Date: Jan 2014
8%
1%
3%
24%
49%
4% 11%
Commission – fixed rate (fixed % of media billings)
Commission – sliding scale (% varies based on
media billings variation)
Commission – variable (% varies by media used)
Fixed or output-based fee (fixed for project/
period)
Labour-based fee (labour time calculated by the
hour/% of personnel time)
Value-based fee (based on value of agency service
provided - not time or cost based)
Performance-based fee/bonus (based on outputs
e.g sales/brand performance metrics)

14. Global Agency Remuneration
Remuneration models in use across different agency types
Source: WFA online survey: ‘Global Agency Remuneration Trends’; Base: 43. Date: Jan 2014
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Performance-based
fee/bonus
Value-based fee
Labour-based fee
Fixed or output-
based fee
Commission –
variable
Commission – sliding
scale
Commission – fixed
rate

15. Creative agency remuneration shifts away from paying for man hours, towards
paying for performance
Creative agency remuneration models (2011 vs 2014)
Source: WFA online survey: ‘Global Agency Remuneration Trends’; Base: 43. Date: Jan 2014
10% 12%
15% 17%
59%
51%
4%
3%
15%
23%
2011 2014
Performance-based fee/bonus
Value-based fee
Labour-based fee
Fixed or output-based fee
Commission – variable
Commission – sliding scale
Commission – fixed rate

16. The decline in paying for hours is even more pronounced with media agency
remuneration
Media agency remuneration models (2011 vs 2014)
Source: WFA online survey: ‘Global Agency Remuneration Trends’; Base: 43. Date: Jan 2014
40%
48%
0%
10%
44%
21%
16%
21%
2011 2014
Performance-based
fee/bonus
Value-based fee
Labour-based fee
Fixed or output-based fee
Commission – variable
Commission – sliding scale
Commission – fixed rate

17. The 4 “C”s required by clients
- Creativity
- Challenge
- Connected (to business)
- Continuity
And … Culture / cultural fit
The Future of Effective Partnerships

18. The 4 “C”s for agencies
- Communication
- Creativity
- Craft
- Contribution (to business)
And … Committment
The Future of Effective Partnerships

32. What clients want from agencies
- Individuals with ideas
- Flexibility
- Can do attitude
- Output and outcomes
- Impact
- Fair remuneration
The Future of EffectivePartnerships

33. What clients don’t want from agencies
- Inflexibility in structure and network
- Bottom line focus – endless remuneration discussions
- Corporate approach
- Counting the hours
- ‘Supplier’ relationship
The Future of EffectivePartnerships

34. Let’s start again … ?
- Entrepeneurial approach
- Agencies - Names on the door
- Clients - Names on the label
The Future of EffectivePartnerships

35. The agency of the Future
How would I build the agency of the future
to meet my needs as a client ?
The Future of Effective Partnerships

36. The agency of the Future
What do I want ?
- Focus on output and outcome
- Planning connected to business
- A business partner (skin in the game)
- Outstanding relevant creativity in all relevant media and touchpoints
- Challenge and continuity
The Future of Effective Partnerships

37. Conclusion
- Back to the core business relationship
- Trusted advisors
- Mutual respect – from business and creative challenges
- Entrepreneurial approach from both sides
- Outstanding committed individuals
- Work that makes a difference
The Future of Effective Partnerships

38. The future of Effective Partnerships