The Marketeer Association
Without diversity, without weirdness, without difference, without tolerance a city will die. Cities don’t need shopping malls and convention centres to be economically successful, they need eccentric and creative people.” Those are the words of Professor Richard Florida speaking at the recent BoHo Britain conference, an agenda-setting event for anyone interested in the future of British cities, which is the vast majority of us. Perhaps somewhat surprisingly, at the BoHo Britain conference, Manchester was crowned the most creative city in the UK, beating the creative metropolis that is London to the top spot – encouraging news for the media, marketing and creative communities based in the North, particularly those based in the North West.
So, with this timely boost to the creative morale, it is only fitting that Adline weighs in with its own research, commissioned last year by The Marketeer Association in conjunction with Manchester-based Cultural Industries Development Service (CIDS), to give a clearer picture of the inconsistencies that currently exist.
It is the long held belief of the member agencies of The Marketeer Association that the creative services remain a vital industry for the sustained development of a vibrant economy in the North West and act as “gateway industries”, which offer other industry sectors an inroad to the money that is already in the North West, but is being spent with companies based outside the region – primarily London.
Adline’s research into the creative industries in the North West was carried out by The Really Useful Research Company between November 2002 and February 2003 and took the form of both desk-based and focus group research.
Five in-depth focus group discussions were conducted in two stages, with the focus groups consisting of clients from companies based in the North West and Yorkshire, with their experience spanning the marketing spectrum, from marketing executive to marketing director and from press officer to brand manager. Companies present during the focus groups included: AG Barr, Alliance & Leicester, Girobank, Co-operative Bank, Blackpool Pleasure Beach, Fox’s Biscuits, Georgia-Pacific Consumer Products, Halifax, Jacuzzi UK, My Travel and Prince’s Foods. The sample was sourced from the Chartered Institute of Marketing’s (CIM) Marketing Manager’s Yearbook 2003 or ALF and the focus groups were moderated by John Ardern, managing partner of TRURC, in full compliance with the Market Research Society Professional Code of Conduct.
The Current Financial Situation
Desk-based research showed that the total above-the-line creative marketing expenditure by clients, companies and advertisers in the UK is worth approximately £17 billion per year.
Of that £17 billion, the creative industries in the North West account for just £2 billion per annum. Of this amount, approximately £1.5 billion is spent in above-the-line advertising and marketing, and £500,000,000 is spent in below-the-line advertising and marketing, which includes direct mail, sales promotions, incentive schemes, field marketing, etc. On top of this is substantial spend on design, packaging, market research, product development, etc.
Of the top 100 UK advertising spenders, 10 have their headquarters in the North of England and they spend £300m on advertising per annum. Five of those clients are based in the North West and they spend around £160m on advertising.
The North West currently consists of approximately 5,490 companies that operate within the creative industries sector. Based on our research, estimates suggest that each £1m worth of marketing spend in the North of England represents a total of 15 jobs.
Of all this advertising expenditure by clients in the North/North West of England, it is estimated that only half is spent by those clients who use agencies and suppliers of marketing, advertising and creative services in the North and North West of England. That comes to a total of between £750m and £800m, which, according to our estimates, means 11,000 jobs are lost, or simply not created.
According to research there are currently 21,500 companies in the North with a turnover of £10m-plus.
According to the CIM, the average member company will invest 2.3 per cent of its turnover in marketing, which actually means that these companies alone should spend £5 billion on marketing. But, as our research shows, marketing spend in the North is only £2 billion.
So, it appears that not only is there a creative gap, that is creative companies not getting a fair slice of the pie, to address, but also a marketing gap because all marketing services companies in the North are missing out on revenue.
What do Northern agencies
need to do to close the gap?
From the focus groups it was essentially concluded by the clients questioned that the vast majority of Northern agencies and local agencies need to raise their profiles in order to tackle these problems.
They need to increase their levels of awareness amongst clients and educate clients, both in the North and outside the North, that they are on their doorstep.
Some typical responses during the focus groups included:
“We need to know they are there.”
“We need to made aware of what they can do for our businesses.”
Preferred methods of approach
Ã¯ Personalised and tailored approaches that are relevant to the company in question.
Ã¯ By mail – get things in front of clients that will make them remember your agency’s name, something that is useful and will be used on a daily basis or something that will stand out from the crowd. Don’t always expect an immediate response from a client. They will get in touch when they need to get in touch with you.
Ã¯ By email.
Ã¯ Personal contact at networking events and marketing forums.
Discouraged methods of approach
Ã¯ Cold calling – infuriating, intrusive and annoying. There are no prizes for being persistent here – quite the opposite. Typical responses here in our research included: “They always call at the wrong time and never ask if it is a good time”, “They think their time is worth more than mine”, “I try to be polite, but sometimes have to be rude.”
Ã¯ Junk and bulk mailings.
Ã¯ Being approached after their agency has just won an award – “ We are hardly going to change an agency that has just won us an award.”
Main triggers for an agency review
Ã¯ If the results achieved by the agency’s work don’t meet/exceed targets set.
Ã¯ If service levels drop suddenly or dramatically.
Ã¯ Changes in personnel, on both the client and agency side.
Ã¯ At times of merger, acquisition and rationalisation.
Ã¯ When a conflict of interest occurs on the agency side.
Ã¯ New requirements in the form of new projects, entering new markets or launching new products.
Ã¯ The need for new ideas and new approaches to the marketing problems faced.
Ã¯ If work cannot be done in-house.
Ã¯ When client requires work in a specialist area, eg new product development, direct marketing, customer relationship management, point-of-sale, field marketing etc.
Ã¯ When looking to restructure your roster of agencies, perhaps add new names and lose agencies that are tired and not delivering results.
Ã¯ Personal experience with current company and with previous companies/employers.
Ã¯ Colleagues and contacts – word of mouth, personal recommendations.
Ã¯ Client and agency were at school college or university together.
Ã¯ From industry knowledge, gained by keeping up to date with trade press and attending events, etc.
Ã¯ People they have met (you can’t beat face-to-face contact with agency people).
Ã¯ Articles and magazines read (especially in the trade press).
Ã¯ Mailers received from agencies.
Criteria for agency selection
This aspect of the research reinforced the well-known fact that every client is different and uses a different set of criteria to when looking to appoint their marketing services partners.
However, the key findings showed that the clients based in the North use the following criteria to select agencies:
Ã¯ Agency’s ability to complete the job, project or commission – taking into account the specific skill sets required, prior knowledge of the specific marketplace and also experience working with other similar clients in similar marketplaces.
Ã¯ Cost – whether the cost will be fee or commission-based, overall value for money, will the agency be paid a retainer or paid on an ad-hoc basis, general hourly rates of pay, the agency’s overheads and offices, travelling time and costs (by the agency and/or by client).
Ã¯ Service levels – the speed at which the agency is able to respond to a set brief, the quality of that response, actual involvement in the company’s overall marketing strategy, the flexibility of the agency with regard to work practice and hours and whether the company can regard its agency as an extension of its own in-house marketing department.
Ã¯ Other clients – is the cross-fertilisation of ideas/knowledge a danger and does the agency currently work for any client that may conflict or compete with them?
Ã¯ Rapport – at what level are the personal relationships between client and agency maintained? Do the client and the agency share the same values? How much time will they spend together working on the business?
Ã¯ Culture – does the agency fit the client’s company culture or will it conflict in any way? Is the client/agency size (in terms of staff/turnover) so radically different that problems could occur with regard to who holds the power? Is it a family-owned and company working with an agency that is a plc or part of an international network? Could problems develop due to that?
Ã¯ Accessibility – is the agency easily accessible in terms of distance? How much time will be spent travelling to and from the agency? The closer the client and agency the more frequently meetings can take place and, inevitably, the more people can become involved with the process. Face-to-face contact is important, but location shouldn’t be a deciding factor when selecting your marketing services agencies.
See the next issue of Adline to read the reactions of Marketeer Association members to this research and
the way forward for the industry in the North.